Our “Data Center Impacts” event last month brought an expert panel to McLennan Community College’s Cameron Hall to bring clarity to debates about the industry’s water consumption, energy use and options for local control.
Judging by the 180 attendees who showed up to listen — plus the nearly 50 question cards submitted to the panel — we could have gone through the night.
We combed through the stack of notecards and found recurring themes popping up again and again, from how residents can make their voice heard, to what it takes to cool off a hyperscale data center.
There were thought provoking one-offs, too. We decided to tackle a few of those unanswered questions, and we’ll hold on to the others as we continue to track this vital topic. Here goes:
Currently, who has a say in permitting/zoning for the building and approval of data centers?
Let’s start with zoning. In Texas, cities can zone, but counties can’t, and many of this area’s data center projects are outside city limits.
Cities can also impose water utility rules for developers within their service areas, which you can read more about here.
Counties don’t have many sticks but they have carrots in the form of tax abatements and other incentives. They could require measures such as sound buffering and “hire local” provisions for data centers requesting incentives, but incentives have become a political lightning rod as the industry expands.
Of the estimated 248 data centers planned in Texas, almost half are slated for unincorporated areas, according to a recent Texas Tribune story that highlighted eight data centers proposed in Hood County.
Permitting power generally rests with state and federal agencies. Pollution permits go through the Texas Commission on Environment Quality and the Environmental Protection Agency, while grid connections are approved by the Electricity Reliability Council of Texas.
Water use is not currently regulated by the state or federal government but rather by municipalities and river and groundwater authorities.
In McLennan County, the City of Waco, the Brazos River Authority and the Southern Trinity Groundwater Conservation District call the shots on most available water.
Are there proposals in the Texas Legislature to give more authorities to communities?
This question and several others like it get at the crux of the Texas data center boom. The projects are enormous and they can seem to come out of nowhere, with few options for residents or local officials to pump the breaks. One attendee at “Data Center Impacts” captured the prevailing sentiment in five words: “How can we regain local control?”
That will be up to the Texas Legislature and voters’ ability to maintain pressure on their representatives. Data center issues are listed as formal priorities in both the Texas House and Senate ahead of the next legislative cycle, which begins January, and Gov. Greg Abbott has recommended several measures to rein in the projects.
Water use, electrical demand, state tax incentives, and balancing economic growth with “community integrity” are focuses for lawmakers. The Natural Resources Committee of the Texas House will be meeting June 23 at the Capitol in Austin to discuss data center water use. The public can attend hearing and speak on the topic.
Details can found here, including instructions for comment submissions and testimony. Senate committee meetings can be monitored here. No committee meetings corresponding to the data center issue have been scheduled so far.
Please describe what data centers are doing to combat power and cooling issues.
Imagine every Texas household, skyscraper and factory, and all the electricity they use. Now double it. That’s what data centers companies are requesting from the grid by 2030, according to ERCOT, the state’s grid manager.
Data center opponents fear the industry’s appetite for energy could spike electricity bills, a possibility highlighted by a 2026 study in the journal of Environmental Research Letters.
Last year, the state introduced a queue for “large load” interconnection requests to manage the surge in demand. Many companies are now looking to circumvent the grid bottleneck by signing contracts directly with utility providers or by building their own power infrastructure onsite.
Because gas-fired plants account for the bulk of onsite power generation proposals, local air pollution and carbon emissions could skyrocket. The size of hyperscale data centers makes every solution a tradeoff.
It’s the same case for cooling the powerful computer chips inside. Air cooling is noisy and inefficient at managing chip temps but uses virtually no water. Evaporative systems, which work like a home swamp cooler, are more efficient at removing heat but are massively thirsty compared to alternatives.
The most effective way to cool chips while preserving water is a closed-loop system, which recirculates the same water like the radiator in a car. Gov. Abbott’s recommendations include requiring this system at data centers.
There are tradeoffs, however. They use substantially more electricity than evaporative systems and the water is mixed with industrial cooling agents that must be disposed of properly when the system is recharged.
If a closed-loop system is powered by fossil-fuel generation, the water required to cool off the power plant can eat at the water efficiencies gained inside the data center, what researchers call “indirect consumption.”
Replacing fresh water with reused water for cooling purposes is another approach gaining steam. The proposed Infrakey-Lacy Lakeview data center north of Waco is looking at such a system.
The engineering challenges it presents are complex — you can read my story about that if you want to learn more — but reused water is valuable in its own right, too. Like all water, recycled water is a finite resource, and the data center industry isn’t the only one thirsty for it. An increasing number of Texas cities, utilities and manufacturers are investing in wastewater infrastructure to protect freshwater resources, including Waco.
How much heat will a data center produce?
I’m glad somebody asked this! The first neighborhood-level analysis on the topic was published last month by researchers at Arizona State University.
Before I get into that, there’s something we have to understand first. Why do data centers break a sweat in the first place? Because all computation generates heat, at least until computer scientists can exorcise Maxwell’s Demon. Simply stated, the principle is: The more electricity used, the more heat generated.
Now remember those cooling systems I talked about earlier? They don’t erase heat, they move it somewhere else, which brings us to that paper and your question. The study focused on four relatively small Phoenix-area data centers and found average downwind temperature increased by 1.3-1.6 degrees.
Results were detectable out to 0.3 miles. Researchers identified plumes of hot air from the site’s air-based coolers as the culprit. By relieving the computers of waste heat, the cooling system propelled it into the neighborhood.
But context is important. The extent of warming depends on the size of the data center, the cooling technology used and the weather conditions at any given time, researchers said. It’s not clear how well a study of “urban thermal hazards” translates to data centers in farmland.
