Abbott Targets Data Centers Over Texas Water Reporting Failures

Estimated Time to Read: 9 minutes

Governor Greg Abbott (R) has directed the Texas Water Development Board (TWDB) to pursue legal consequences against data centers and other major water users that failed to report water consumption as required by state law.

In a September 14 letter, Abbott said major water users “appear to have committed civil and criminal violations” by withholding information required under the Texas Water Code. He instructed TWDB to address past reporting failures, enforce the law going forward, and coordinate with the Electric Reliability Council of Texas (ERCOT) as part of the state’s expanding audit of data center projects.

The directive addresses a legitimate compliance problem. Texas cannot accurately plan for future water demand if major users disregard lawful reporting requirements. But it also brings an existing statutory enforcement mechanism into a broader, industry-specific process created through executive action.

That difference is central to understanding Abbott’s latest directive.

Abbott Directs Enforcement of Texas Water Reporting Law

Abbott’s letter does not create a new data center water reporting requirement. Section 16.012 of the Texas Water Code already requires recipients of a TWDB Water Use Survey to complete and return it to the agency. Failure to comply may constitute a Class C misdemeanor and can make an entity ineligible to obtain certain water permits, permit amendments, or permit renewals from the Texas Commission on Environmental Quality (TCEQ).

Abbott directed TWDB to refer potential violations to the appropriate county or district attorney and notify TCEQ about possible permit disqualification. Because TWDB does not prosecute criminal cases, enforcement would ultimately require action by local prosecutors and courts.

The Governor also ordered TWDB to provide his office with an initial enforcement report by October 14 and continue providing updates until the data center audit is complete.

Requiring compliance with a law enacted by the Legislature is not, by itself, an improper expansion of executive power. Data centers and other major water users should comply with lawful reporting requirements. The policy question is whether enforcement will remain tied to the statute or be used to support broader restrictions that the Legislature has not authorized.

Texas Data Center Surveys Produced Different Response Rates

Several low response rates have been cited in the debate over Texas data center water use, but they came from different state information-gathering efforts.

During the June 23, 2026, hearing of the Texas House Committee on Natural Resources, lawmakers were told that only 17 percent of Texas data centers had responded to TWDB’s legally required 2025 Water Use Survey. A separate Public Utility Commission (PUC) survey sought information about the electricity and water consumption of data centers and cryptocurrency-mining facilities. The PUC received responses from 28 companies representing 92 of 341 facilities at various stages of development and operation.

Abbott later said that fewer than 10 percent of data center companies responded to the state’s initial request for information and that participation remained below 30 percent after the request was sent again. That statement appears to concern the separate PUC information request, not the mandatory TWDB Water Use Survey.

More recent TWDB records reportedly show that nearly 30 percent of the 329 data centers surveyed for 2025 ultimately submitted responses. Among the 267 facilities that were new to TWDB’s tracking system, only 22.5 percent responded. The difference between the 17 percent presented during the June hearing and the later figure approaching 30 percent may reflect additional responses, updated records, or changes in which facilities were counted.

Participation was plainly low, but the figures should not be combined as though they describe one reporting requirement. Failure to return the TWDB survey may trigger penalties established in the Texas Water Code. Failure to answer a separate agency request does not automatically constitute the same violation.

State officials should identify which survey they are discussing, who was legally required to respond, how the response rate was calculated, and what authority supports the proposed consequence. Low participation warrants scrutiny, but it should not become a general-purpose justification for regulating the industry.

Water Enforcement Becomes Part of Abbott’s Data Center Audit

Abbott’s September 14 letter is the latest development in a rapid expansion of Texas data center policy.

His June 10 directive asked the PUC and ERCOT to address grid reliability, forecasting, infrastructure planning, and the costs created by large electric loads. When the PUC responded in July, it distinguished between actions available under existing authority and policies that would require additional approval from the Texas Legislature.

ERCOT had also developed its "Batch Zero" framework to study large-load projects together, identify available capacity, and plan necessary transmission improvements. As Texas Policy Research (TPR) previously explained, Batch Zero raised its own questions about whether Texas was planning infrastructure for growth or beginning to allocate economic opportunity through an administrative process.

Abbott went further on August 3 by directing the PUC and ERCOT to audit every data center advancing through the interconnection process. Projects that fail to complete the audit can be denied access to the grid. ERCOT subsequently postponed Batch Zero while carrying out the directive, effectively pausing progress for projects awaiting interconnection review.

TPR warned at the time that the data center audit raised executive authority questions. The Legislature had not established this comprehensive verification process or directed ERCOT to deny interconnection based on the new audit. The PUC had also acknowledged that it needed additional statutory authority in some areas involving large computational loads.

Abbott’s latest letter now directs TWDB to join that audit. The agency must coordinate with the PUC and ERCOT to obtain information about water consumption, water sources, and water-efficient technologies. According to the Governor, a failure to provide water information through the audit would trigger TWDB’s independent enforcement authority.

That connection deserves scrutiny. One process enforces a survey expressly required by the Texas Water Code. The other conditions access to the electric grid on compliance with an executive-directed audit. A violation of the statutory survey requirement may justify the penalties prescribed by that law, but it does not automatically establish authority for additional restrictions imposed through ERCOT or the PUC.

Data Center Enforcement Should Not Become a Regulatory Wall

The poor reporting response gives state officials a legitimate reason to enforce existing law. It does not answer the broader question of how far Texas should go in regulating data centers as a separate class of businesses.

The Water Code applies to recipients of TWDB surveys, not exclusively to data centers. Abbott’s letter itself refers to “major water users, including data centers.” Enforcement should therefore be based on the statutory obligation and applied consistently to similarly situated water users.

Targeting a politically visible industry through a growing collection of directives, audits, and agency conditions risks replacing neutral law with administrative discretion. It may also produce competitive consequences that are easy to overlook. TPR previously examined whether Abbott’s data center directives could wall off competition. Large technology companies already employ the attorneys, engineers, consultants, and government-affairs personnel necessary to navigate complex approval processes. Smaller developers and new market entrants may face the same formal requirements but bear a much greater relative burden.

This does not establish that the directives were designed to protect large incumbents. It does mean that every new compliance requirement, delay, and discretionary review can add another barrier to entry. A regulatory system can apply equally on paper while favoring the companies best equipped to navigate it. The better approach is to enforce clear laws against actual violations while avoiding an open-ended permission structure for private investment. Texas should neither subsidize data centers as favored economic-development projects nor target them as convenient political villains.

Large users should bear the infrastructure costs their projects create. Taxpayers and unrelated ratepayers should not finance private development. Neighboring property owners should retain meaningful remedies for measurable harms. Those principles address identifiable costs and rights without authorizing government to decide which companies or industries deserve to grow.

The Legislature Should Define Texas Data Center Policy

Gov. Abbott is correct that companies cannot disregard a reporting requirement enacted by the Legislature. The low response to the TWDB survey also raises a fair question about why the existing law went largely unenforced before the Governor’s intervention.

But enforcement should not obscure the larger institutional issue. Texas is increasingly governing data centers through executive letters, agency instructions, audits, and interconnection conditions rather than through a comprehensive law debated by elected legislators.

Questions about water reporting, grid access, infrastructure costs, property rights, and agency authority belong before the Texas Legislature. Lawmakers should determine which requirements apply to large water and electricity users, what consequences attach to noncompliance, what due process protections are available, and which powers belong to TWDB, the PUC, and ERCOT.

That approach would be consistent with TPR’s previous position that Texas should respond to data center growth by expanding infrastructure rather than restricting investment. Data centers are not identical, and their water demands can vary significantly according to location, scale, and cooling technology. Localized infrastructure constraints should be addressed as localized problems rather than treated as proof of a statewide industry crisis.

Texas needs accurate information about data center water use. It also needs predictable law, regulatory neutrality, private property rights, free enterprise, and legislative supremacy.

The state can enforce the Water Code without using poor compliance as an excuse to govern an entire industry by letter.

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