Water

Large-quantity water users should be defined as those whose water use equals or exceeds 10,000 centum cubic feet (ccf), equivalent to 7,480,000 gallons per month.

Require all large-quantity water users to submit an application for substantial water usage. Cities must reserve the right to determine that the applicant’s use would be incompatible with the city’s available resources and reject the application. Data centers should be presumed rejected unless the developer is able to prove robust and effective water-sustainability measures.

Applications must include the data center’s projected water usage. Applicants must be required to account for all water uses, including water used in data center construction, server cooling, facility cooling (including cooling towers), and other ancillary water uses. Most data center projections currently do not account for the water facilities will use to cool their infrastructure (including server cooling and facility cooling), which consumes a significant amount of water,¹ as well as construction.

1. Pengfei Li et al., “Making AI Less ‘Thirsty’: Uncovering and Addressing the Secret Water Footprint of AI Models,” arXiv, March 26, 2025, https://arxiv.org/pdf/2304.03271. ↩︎

Increasingly, data centers are tapping into freshwater resources. Applicants must specify their water footprint, including blue sources (surface water and groundwater), piped sources (municipal water), and gray sources (purified reclaimed water). For blue sources, data centers must break down their expected sourcing of surface water and groundwater.¹

1. Miguel Yañez-Barnuevo, Data Centers and Water Consumption, Environmental and Energy Study Institute, June 25, 2025, https://www.eesi.org/articles/view/data-centers-and-water-consumption. ↩︎

Large-quantity water users must submit a water-conservation plan. Require independent review to evaluate whether the water-conservation plan will reduce the consumption of water, over what time period, and the impact this will have on residents and the environment. Options include the following:

Water Efficiency Measures

Require data centers to minimize water demand through efficiency measures such as efficient airflow to reduce overall cooling needs, closed-loop cooling systems, and immersion cooling.

Water Replacement

Ordinance must specify that water should be fully replaced. The water replacement should benefit the watershed that blue sources are being drawn from.

Recycled Water Offset Requirements

Require large-quantity water users that consume on average more than 100,000 gallons of water per day for at least five days out of the year to offset their use by using recycled or conserved water for at least 50 percent of their water demand.

Note: Cities can require data centers to invest in infrastructure to meet recycled water requirements. This requirement will depend on a jurisdiction’s recycled water-treatment facilities, infrastructure, and goals.

Note: This distinction is not intuitive! Liquid cooling techniques use little to no water, and air cooling techniques use significant amounts of water.

1. Yañez-Barnuevo, Data Centers and Water Consumption. ↩︎

While certain jurisdictions may have the necessary water infrastructure in place to service large-quantity water customers such as data centers, other jurisdictions may need to extend water and sewer infrastructure to serve new customers. Public utilities often pass these costs onto ratepayers, which can lead to higher water bills. This is particularly relevant for rural communities, where existing water infrastructure may be lacking. 

Cities must demand that each data center pay 100 percent of estimated public infrastructure costs related to its water usage, with a particular focus on infrastructure upgrades needed to support the data center. This can be done through an annual Infrastructure Impact Fee deposited into a restricted fund used for local water infrastructure, conservation, and drought resilience projects.¹

1. Thanks to the Southeast Climate and Energy Network for crafting this policy recommendation. ↩︎

Require that data centers test and publicly report water quality to ensure it remains safe, with a binding commitment to cleaning it up if it is not.

Require that water consumption numbers and sourcing be made public in monthly reporting. Without transparency, effective enforcement of approvals based on water use and addressing harms will be more difficult. Reporting should include the following:

• Average monthly water usage, including cooling and ancillary uses
• Water-conservation-plan reporting
• An assessment of whether water demands require tapping surface or groundwater
• An assessment of whether potable water will be used

This information must be submitted to the local agency overseeing the permitting process to ensure compliance with the terms of the conditional permit. Information should also be reported to a state agency that gathers and discloses this information online. For more information about how states can track and publish these metrics online, see Establish a Statewide Clearinghouse.

Ensure that the water-service applications and water-conservation plan are public records subject to disclosure under the state’s public records law. Stipulate that this information does not constitute a trade secret subject to exemption from disclosure.

Tax the water usage with no exemptions, and increase the daily rate during droughts. Require that money be funneled into either water conservation projects or local infrastructure.

The large-quantity water user must not voluntarily pledge to have a water-conservation plan, but actually enact it. Water-conservation plans must be legally binding. The city must build in enforcement mechanisms to enforce water usage and water-conservation plans. To implement the strongest penalty, water service should be shut off for violations. Nominal fines for violating a water permit mean nothing to hyperscale data centers.