As data center projects proliferate through Central Texas, so do questions about their effect on water consumption, air quality and the electrical grid – and what communities can do to shape their development.
But answers have been hard to come by.
An expert panel tackled those questions Thursday at The Waco Bridge’s “Data Center Impacts” at McLennan Community College’s Cameron Hall.
The event drew a crowd of about 180 people across the political spectrum, including neighbors of proposed data center developments such as the Infrakey project north of Lacy Lakeview.
The expert panel included Margaret Cook, a leading data center researcher with the Houston Advanced Research Center; policy expert Luke Metzger of Environment Texas; and McLennan County Judge Scott Felton. Bridge Editor-in-Chief J.B. Smith interviewed the panelists and relayed questions from the audience.
Felton, who as the county’s top official is involved in economic development decisions and water planning, said he understands the concerns of data center neighbors.
“My concerns are exactly the concerns of the folks sitting in this audience,” he said. “The questions they ask are good questions that need to be answered. I think a big part of it is the fault of the data center industry for not being able to provide a lot of information out.
“The other thing that concerns me is the lack of power that legislators give county governments, when a lot of these large-scale operations are built out in the country.”
The educational event was sponsored by MCC, The Baylor Line, The Texas Farm Bureau and Heart of Texas Goodwill.
An audio version of the conversation will be made available soon for those who were unable to attend the event. Here are some key takeaways from that discussion.
“Two Texases worth” of power
There are an estimated 450 data centers operating in Texas today, but most of those are tiny compared to the developments being proposed to support anticipated demand for artificial intelligence.
Cook’s research shows that current Texas data centers require about 9.6 gigawatts of power, or about 8% of the capacity of the state’s grid operator, the Electric Reliability Council of Texas.
Cook said Thursday that ERCOT has received requests from data center developers for 194 gigawatts by 2030. That amounts to nearly “two entire Texases worth” of electricity, Cook said.
Cook said it’s unlikely that all those data centers will be built, “because a lot of these requests are speculative, these are real estate developments.”
“ERCOT is actually expecting that to be closer to 30 gigawatts, which is still tripling of what they currently are right now.”
Metzger questioned whether it’s logistically possible to scale up energy production and transmission that quickly.
“It’s unclear that we can meet the power demands, and even if we do, we’ll likely be meeting those demands for electricity with dirty power plants, dirty diesel generators and other things that will really exacerbate health concerns with asthma and heart disease,” he said.
Water needs murky
One of Texas’ biggest challenges is a structural shortage of water, as the Texas Water Development Board’s 2022 state water plan shows.
Even if data centers are removed from the equation, the plan shows the state would have a water deficit of 4.8 million-acre feet by 2030 – about 45 times the municipal supply of Lake Waco. The plan shows a deficit of 6.9 million acre-feet by 2070.
But data centers still have not been factored into the state water agency’s long-range, Cook said, and it is difficult to get water use estimates from the industry.
Cook has estimated that the amount of Texas water used for data centers could increase from 0.4% to 2.7%, but she said Thursday that those estimates may be revised upward significantly.
While the industry has made advancements in using water more efficiently, she said, the reality is there is no surplus of water to begin with. Solutions such as cooling computer chips with recycled water also deprive cities of using that recycled water for other uses and industries in the future.
She compared Texas’ water situation to a shopper carrying too many bags of groceries.
“We don’t have room to carry another bag, so we’re either going to need to put something down, or grow another arm,” she said.
Air impact
All that electricity will need to be generated somehow. Many data center developers are seeking to exploit Texas’ abundance of fossil fuels to energize their sites, often proposing giant gas-fired plants onsite, plus diesel generators that can run the plant when they are required to temporarily disconnect from the grid. That will mean sacrificing hard-fought improvements to air quality, Metzger said.
“We need to make sure that the power generation is as clean as possible, we can get to it, but diesel generators are a huge source of pollution.”
He referenced a 2023 University of California Riverside study that there could be 1,300 deaths a year caused by air pollution from diesel and gas generators at data centers.
The tax base lure
Felton, the McLennan County judge, said industrial development is crucial to sustaining local government budgets without increasing household property taxes. “If you can raise the industrial and manufacturing (tax revenue) higher, they carry a bigger part of the burden” versus homeowners, Felton said. “That’s the reason why we work hard to grow economically.”
But he said economic development officials consider not just tax base but “what kind of neighbors are they, do they contribute to the community in a positive way? … Can the data center meet that? It’s yet to be seen.”
Lacy Lakeview officials cite the potential tax windfall in their pursuit of a data center near the Ross area, in partnership with developer Infrakey. Lacy Lakeview has struggled to repair basic infrastructure, including roads and pipes, and estimate the development would increase the city’s tax revenue from $6.5 million a year to more than $50 million.
Getting involved
One of the overriding themes among Texans opposing data centers is the lack of public control over where the facilities are built, how they account for local impacts, and whether data centers get built at all.
Metzger said that frustration is reaching those in power. ”Politicians are hearing the anger from the public, and I think it is reaching a boiling point, so that next session we are going to see some real actions,” Metzger said.
He encouraged the crowd to share their concerns with Texas lawmakers next month in Austin at interim hearings on data centers. Interim hearings are where legislative priorities are formalized ahead of the next legislative session in January.
Felton said residents should continue to stay engaged with local governments and attend town halls hosted by data center developers. One developer, Cipher Digital, is expected to host a town hall soon for a data center it is proposing in Riesel.
“Be sure that you’re in Riesel, or any place else where there’s a chance to share information with each other, what concerns are, to take that opportunity,” Felton said, because “they’re right there in front of you.”
Disclosure: McLennan Community College is a financial supporter of The Waco Bridge, a nonprofit news organization that is funded in part by donations from individual donors, foundations, and corporate sponsors. Financial supporters play no role in the Bridge’s journalism. Find a complete list of them here.
