Texas Investigates Hundreds of Data Center Developments Over Water Reporting

Key Takeaways

• Hundreds of Developments Under Investigation: Texas Attorney General Ken Paxton is investigating hundreds of data center developments over compliance with state water use reporting requirements.
• Missing Survey Responses Are the Issue: The investigation concerns developments that have not responded to the Texas Water Development Board’s Water Use Survey.
• Reporting Is Required by Law: Recipients of the survey are required under Texas law to complete and return it. TWDB specifically identifies data centers among the users subject to its Industrial Water Use Survey.
• The Review Spans Much of Texas: The initial investigation reaches data centers in 18 counties, including Harris, Travis, Dallas, Tarrant, Bexar and El Paso.
• No Individual Companies Were Named: The attorney general’s announcement did not identify specific operators or say that violations had been established against any particular data center.

Deep Dive

Texas Attorney General Ken Paxton has announced an investigation into data center developments that have not responded to the Texas Water Development Board’s Water Use Survey. His office said the investigation is ongoing and is intended to ensure data centers provide accurate, current information about their water use.

Texas law directs the TWDB to survey entities using groundwater and surface water for municipal, industrial, power generation and mining purposes. Recipients are required to complete and return the survey, and the board specifically identifies data centers among the users required to complete its Industrial Water Use Survey.

“My office is currently investigating hundreds of data center developments to ensure that they are transparent about their water usage and fully compliant with the law,” Paxton said. He also accused companies of disregarding their obligations and said Texas could not sacrifice its water, energy supply or other resources.

The announcement did not name any of those companies. Nor did it establish that any particular data center has violated the law. What Paxton’s office said is that developments under investigation have not provided responses to the TWDB survey and that the attorney general is demanding compliance.

The state has not accused these facilities of taking too much water. It is trying to establish how much they use. The initial investigation stretches across 18 counties, including Harris, Montgomery, Travis, Dallas, Tarrant, Smith, Bexar, Tom Green, Potter, Randall, Lubbock, Midland, Ector, Wichita, Victoria, Brazos, Nueces and El Paso. It is not confined to one data center cluster or one corner of Texas.

The information the state is seeking has a life beyond the survey itself. TWDB collects data on groundwater and surface water volumes, water sources, sales and other information through its annual program. The agency uses those figures in water supply studies and regional and statewide planning, work that depends on the completeness and accuracy of what water users report.

Data centers have also become easier to see in those numbers. Historically, water purchased by data centers from municipal utilities was generally captured within commercial water use under the municipal category. Beginning with the 2025 Water Use Survey, covering 2024 water use, TWDB began reclassifying and tracking data center water use within the manufacturing sector where possible. The agency said the change would allow more explicit monitoring as the industry develops.

That makes an unanswered survey more consequential than a missing form in a filing cabinet. Texas is trying to build a clearer account of how an expanding class of industrial facilities fits into its water system, and that account depends on the information reaching Austin.

There are consequences for failing to provide it. Under Texas law, a recipient that fails to timely complete and return a Water Use Survey becomes ineligible for TWDB financial assistance and for certain water-right permits, amendments or renewals from the Texas Commission on Environmental Quality until the survey is administratively completed. Failure to complete and return the survey is also a Class C misdemeanor.

The regular online application closed July 1, but TWDB continues to accept past-due surveys using downloadable forms. Its Industrial Water Use Survey category expressly includes data centers.

Paxton’s announcement leaves several things unanswered. It does not say which developments are being investigated, how many have received demands from his office, or how much water the facilities collectively use. Those are precisely the sorts of facts the state is trying to establish. What Texas has made clear is simpler. If the state asks a data center to account for its water, silence is no longer being treated as an administrative loose end.

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