Texas Regulators Lack Basic Contact List for Data Centers, Undermining Water Oversight

Texas cannot regulate what it cannot find. That's the blunt takeaway from Tuesday's state Senate hearing, where officials from the Texas Water Development Board and the Public Utility Commission admitted they lack a master mailing list for data center operators. Without one, they cannot confirm whether compliance notices reach the right facilities, or whether they are simply being ignored.

The admission matters because Texas is trying to build water and grid planning models around an industry it can barely track. The TWDB's mandatory annual survey went out to 341 data center operators in January. Follow-up reminders and direct messages continued through July. As of August 26, only about 100 facilities, roughly 30 percent, had responded.

"We just collect information and are aware of who did not respond," said Temple McKinnon, the TWDB's director of water supply planning. That passive posture drew visible frustration from lawmakers on the Senate Water, Agriculture, and Rural Affairs committee.

Why It Matters

Failure to respond to a TWDB survey is a misdemeanor under Texas law, but enforcement sits with local district attorneys, not the state agencies collecting the data. That structural gap leaves regulators with a legal hammer they cannot swing themselves. State Sen. César Blanco, a Democrat from El Paso, put it plainly: "We have potentially 200 entities out there that are kind of in the Wild West."

The broader 2025 survey reached more than 4,700 municipal water systems and 3,200 industrial users, feeding into the water board's five-year statewide demand projections. Data centers are a small slice of that universe numerically, but their per-facility consumption and growth trajectory make accurate reporting disproportionately important. The current survey doesn't even ask about cooling technology or fuel type, details that would help regulators anticipate future demand rather than just tally past use.

PUC executive director Connie Corona acknowledged a contact list would help, but she noted many operators cite confidentiality concerns. Sen. Charles Perry, a West Texas Republican, rejected that argument outright. Water, he said, is a public resource shared by more than 30 million Texans. "If that's a proprietary problem for you as a business model, your business model needs to work differently because you're asking for a public resource."

The politics here are not abstract. Gov. Greg Abbott effectively paused new data center grid connections last month pending an audit of project viability and community impact. Data centers are expected to draw a wave of legislative bills next session and to feature prominently in Texas' midterm races. Regulatory credibility, or the lack of it, is becoming a campaign issue.

Where the data does exist, it tells a partial but useful story. A joint TWDB-PUC voluntary survey, first issued April 2 and reopened for ten days in July after weak initial response, drew 155 respondents. Three-quarters were data centers, two-thirds already operational. Nearly 60 percent of running facilities cluster in five counties: Dallas, Travis, Harris, Collin and Bexar.

Of 81 facilities that reported intake figures, total water use came to nearly 1.3 billion gallons, with 964 million gallons drawn from potable supply, the dominant source for both existing and planned projects. The cooling-method split is the more telling number. In 2025, 12 evaporatively cooled facilities used nearly 29 million gallons of water, while 45 non-evaporative facilities used nearly 8 million gallons. PUC analysis found evaporative systems consume roughly four times more water per megawatt hour than non-evaporative alternatives, though the agency's Chris Brown cautioned the comparison draws on just 57 of 155 facilities and should be read as directional, not definitive.

The Alternative Water Question

Vaibhav Bahadur, a mechanical engineering professor at the University of Texas at Austin, framed the core tension well. Fresh water allocation in Texas is effectively maxed out. One rack of microprocessors can draw the electrical load of 100 homes, and every watt eventually becomes heat that cooling systems must remove. Efficiency will improve as chip and cooling technology advance, Bahadur said, but the state still needs better underlying data to plan around it.

His proposed fix leans on an unlikely resource: oil and gas wastewater. The Permian Basin alone generates enough hypersaline, toxic produced water to fill 1,300 Olympic-sized swimming pools daily. Both QTS Data Centers and Google indicated they would consider using produced water if the opportunity arose. Google is already partially using evaporative cooling at two campuses in Midlothian and Red Oak, a choice Ben Townsend, the company's head of infrastructure and sustainability, defended on energy-efficiency grounds for both the data center and the power plant serving it.

Townsend argued the water-source question matters more than the cooling method itself. "What type of water are you using? Where is it coming from? What is the impact today, tomorrow?" he asked, framing watershed stewardship as an investment decision rather than a compliance checkbox.

Perry was less diplomatic about evaporative cooling generally, calling continued waste unacceptable across any sector. "That won't be allowed coming out of the next session. I promise." Sen. Adam Hinojosa, a Corpus Christi Republican, floated a further step: enforceable water curtailment plans for large data centers, mirroring the curtailment tools already available for grid power. Corona said the idea is one the Legislature could take up.

The Bottom Line

Texas is trying to regulate a fast-growing, capital-intensive industry with survey response rates near 30 percent and no reliable directory of who to contact. That's not a data problem at the margins, it's a structural failure that undercuts every downstream planning exercise, from water allocation to grid interconnection audits. Investors in Texas data center projects should expect the next legislative session to bring mandatory reporting tied directly to utility connections, curtailment requirements modeled on grid precedent, and closer scrutiny of cooling technology choices. The confidentiality argument operators have leaned on is losing political support fast, and companies still resisting disclosure risk becoming the face of a regulatory crackdown rather than quiet beneficiaries of Texas's light-touch reputation.