Texas Governor Orders Water Regulator to Penalize Data Centers Over Reporting Failures

Texas Governor Greg Abbott has directed the Texas Water Development Board (TWDB) to enforce water use reporting requirements against major water users, including data centers, and to impose legal consequences for both past and future noncompliance with state law. The directive marks an escalation in the state's scrutiny of the rapidly expanding data center industry and its mounting demand on Texas water resources.

The governor's action follows indications that major water users, including data centers, may have committed civil and criminal violations by failing to provide TWDB with required information about their water usage. Abbott also instructed TWDB to partner with the Electric Reliability Council of Texas (ERCOT) on its ongoing audit of data centers to gather additional water use data.

"Data centers must share the duty to protect Texas water," Abbott said. "The Texas Water Code requires a complete and accurate water use survey. I direct the Texas Water Development Board to use its enforcement authority to penalize past failures and to impose legal consequences for any future failure to comply."

The TWDB is responsible for developing a state water plan capable of meeting the needs of all Texans, a task the agency cannot fulfill without detailed information on existing and anticipated water consumption. Under the Texas Water Code, recipients of a TWDB survey are legally obligated to complete and return it. A data center that fails to do so commits an offense punishable as a crime. Additionally, any data center that fails to timely complete and return the survey becomes ineligible for Texas Commission on Environmental Quality (TCEQ) permits, amendments, or renewals under Chapter 11 of the Texas Water Code. The TWDB is required to enforce these remedies against noncompliant data centers, including referring cases to the appropriate County or District Attorney and notifying TCEQ for possible permit disqualification.

The governor's latest directive builds on prior regulatory action. On August 3, 2026, Abbott directed the Public Utility Commission of Texas (PUCT) and ERCOT to conduct a comprehensive audit of all data centers advancing through ERCOT's interconnection process. That audit requires detailed information on water consumption, sources of water supply, and the implementation of water-efficient technologies. Any data center project that fails to complete the audit process must be denied interconnection.

Under the new directive, TWDB must coordinate with the PUCT and ERCOT and partner with ERCOT to audit water consumption, water supply sources, and water-efficient technology adoption. Failure to respond to that request will trigger TWDB's independent enforcement authority. The agency is required to update the Office of the Governor by October 14, 2026, on the progress of its enforcement activities, with further updates thereafter, including upon completion of the audit.

The directive reflects growing concerns among state officials about the water intensity of data center operations at a time when Texas is experiencing increasing pressure on its water supplies. As the state's data center footprint continues to expand, regulators are moving to ensure that the industry faces the same reporting and compliance obligations as other major water users. The outcome of the enforcement effort could set a precedent for how other states balance data center growth against resource constraints.