Despite tough talk from Abbott and Paxton, Texas penalties for data center violations are light

This article was originally published by Texas Tribune.

In recent weeks, Gov. Greg Abbott and Attorney General Ken Paxton have adopted increasingly tough rhetoric against data centers, promising to crack down on hundreds of facilities that failed to disclose required information about their water use over the past five years.

But the law that Texas political leaders are invoking carries a maximum fine of just $500 — a potentially negligible penalty that’s just a blip for large companies.

Data centers use millions of gallons of water a year to run their facilities and cool their servers. Under state law, facilities that fail to complete required water-use surveys can be charged with a Class C misdemeanor, punishable by up to a $500 fine, and barred from certain state funding and environmental permits.

But some experts say those consequences have significant limitations, raising questions about whether the state has the tools to force compliance from an industry expanding rapidly across Texas.

State officials don’t know whether misdemeanor penalties have been issued against data centers, and the facilities aren’t eligible for state funding. Increasing fines for Class C misdemeanors in the Water Code would require state legislation. Lawmakers do not convene in Austin for the 2027 legislative session until January.

“The governor is like, ‘Let's enforce the laws on the books that weren't being enforced.’ That's not much in the way of incentive,” said Kathryn Guerra, who leads a watchdog campaign at the environmental nonprofit Public Citizen. “If those are the laws that we already have and nobody's enforcing them, the data centers know.”

Abbott’s office defended its enforcement crackdown by saying that the water board, along with other agencies including the Texas Commission on Environmental Quality, the Electric Reliability Council of Texas and the Public Utility Commission of Texas, will work together.

“No other state agency will approve data centers until the Public Utility Commission, ERCOT, and the Water Development Board have the information they need to make informed decisions,” said Andrew Mahaleris, Abbott’s press secretary.

Mahaleris added that the governor has recommended that data centers pay for their own electric infrastructure, use less water-intensive cooling technologies and add power generation to the state’s power grid.

Cameron Poursoltan, the director of energy policy at Texas for the Data Center Coalition, said the organization, which represents many data center operators, supports annual water reporting because state and regional planners need accurate data to build a water plan that meets the needs of all Texans.

The state already requires large water users, including data centers, to complete annual water use surveys. The Texas Water Development Board, the state agency tasked with overseeing the state’s water planning process and financing water projects, uses responses to assess the current demand and to plan for water needs 50 years into the future.

But data centers have largely ignored the surveys. Or some argue they haven’t received them.

Last year, 329 data centers were surveyed. Only about 30% responded. One lawmaker described the response rate as “pretty pathetic” at a legislative hearing this summer, despite the requirement being written into state law.

Some data center operators have defended the low response rate, saying they have not received a survey.

“Data centers take water stewardship extremely seriously,” Poursoltan said. He added that the organization has worked with TWDB to resolve “significant contact information and data discrepancies that contributed to the TWDB Water Use Survey’s initial lower response rate.”

Tracking Data Centers in Texas

The survey has long been the state’s only way to track how much water the rapidly expanding data center industry uses. Another effort to collect the information by the PUC this year has been voluntary and also had a low response rate.

Now, amid growing scrutiny of data centers and their demands on Texas’ dwindling water supply, Abbott and Paxton are asking state agencies to enforce the existing law. The enforcement push comes as both Republicans face competitive elections and opposition to data center development grows.

A University of Texas/Texas Politics Project poll released in August found that 57% of Texas voters opposed building a data center in their community. Republicans remained closely divided, with 45% supporting while 43% opposed local data center construction. Meanwhile, 75% of registered Texas Democrats oppose data centers.

The water board, which collects the surveys to help plan the state’s water needs, has historically had little ability to enforce the requirement. Abbott has directed the agency to notify local prosecutors about noncompliant facilities, while Paxton has launched an investigation. But the board says it has no authority to prosecute violations itself, and state officials don’t know if fines have been issued against data centers.

The state’s next steps could reveal how much leverage officials actually have. The water board is required to update Abbott’s office by Oct. 14 on the progress of its enforcement efforts.

“We will continue working with state leaders to ensure our industry's growth in Texas is responsible, transparent, and responsive to the communities where our members operate,” Poursoltan said in an email.

What Enforcement Looks Like

Abbott has directed the water board to notify county and district attorneys about facilities that fail to comply, leaving local officials to determine whether to pursue criminal cases.

Historically, the board relied on local law enforcement to ask for the list of noncompliant water users. Experts say this would put the onus on law enforcement to identify a crime, without knowing about the crime.

Ryan Kellus Turner, executive director of the Texas Municipal Courts Education Center, which provides legal resources and professional training for municipal judges, said the violations haven’t generated significant discussion among court officials.

While the attorney general is investigating, Paxton does not have independent authority to prosecute local criminal cases, unless requested or appointed by a district or county attorney, according to the Texas Government Code. Paxton’s office did not respond to questions about the limits of the law or what penalties it believes it can pursue. Shortly after Abbott’s directive to the board, Paxton launched an investigation into hundreds of data center developments in several Texas counties “to ensure that they are transparent about their water usage and fully compliant with the law,” he said in a press release.

“Texas law contains well over a thousand state-law fine-only offenses, many enacted over time to address particular regulatory or public policy concerns,” Turner said. He added that the Legislature could increase fines as it did so in other cases where penalties can reach thousands of dollars.

The financial threats against data centers may also be limited. Perry Fowler, executive director at the Texas Water Infrastructure Network, which supports water infrastructure projects and policy, said data centers generally are not eligible for state funding that officials have threatened to withhold.

The water board serves as the state's financial bank for water projects by providing grants and loans to cities, counties, river authorities, water districts, local water supply corporations and rural utility districts.

“There’s nothing the board can withhold from them,” Fowler said, so the threat of losing that money is less meaningful as opposed to a municipal utility that didn’t fill out the survey and wanted dollars for water supply projects.

The permitting restrictions are also lower than they may sound. The state can withhold certain permits or permit renewals, but the law does not allow the state to revoke or suspend permits already issued to operating or planned data centers for failing to submit the survey, according to Ryan Vice, director of external relations at the Texas Commission on Environmental Quality.

That could leave some operating facilities facing little immediate consequences for failing to report their water use.

“Because permits are needed before operation and TWDB survey applies to sites that are already operating, barring permits might not adequately penalize a site for survey noncompliance until the site comes up for permit renewal or amendment,” said Margaret Cook, vice president of Water and Community Resilience & Sustainability at the Houston Advanced Research Center.

Adrian Shelley, the executive director of Public Citizen, said the governor’s directive is only meaningful if “it leads to a facility being prevented from opening or being shut down if it is already operating.”

Hundreds of Facilities Haven’t Reported Water Usage

The Texas Water Board’s surveys offer a limited picture of the industry’s water use, in part because so few data centers have responded.

The survey is sent by mail to thousands of municipal public water systems and industrial facilities, including operating data centers.

The survey captures annual water volume used and basic facility details, including whether the facility self‑supplies or purchases water, the source of that water like surface water or groundwater, and whether it has on‑site power generation. It does not collect information on the type of technology data centers use to cool down their very hot servers. That technology is traditionally the biggest use of water for facilities.

The water board survey targets operating facilities that use more than 10 million gallons per year, which it considers “a significant industrial user.”

Those that receive the survey are required by law to complete it. If an entity does not, the punishment includes ineligibility for state water funding, possible criminal charges with a maximum penalty of $500, and withholding certain environmental permits.

Accurate data collection is vital, the water board says on its website, because it helps in assessing current water supply and ensuring there is enough water to provide in areas with limited water and growing populations.

The water survey only goes out to data centers that were operating in that given year.

When the board surveyed 22 data centers in 2023, nearly a third of them responded. The next year, 67 data centers were surveyed and 28% submitted the survey. And last year, 329 data centers were surveyed and nearly 30% submitted responses.

Records obtained by The Texas Tribune covering 2020 through 2025 identified 334 unique data center facilities. Of those, 101 facilities — about a third — submitted at least once, and 233 facilities never submitted a requested survey.

While more data centers are being surveyed each year, overall compliance remains low, driven mainly by new facilities. Of the 329 facilities TWDB surveyed in 2025, 267 are new to the agency’s tracking, and only 22.5% of them responded.

The board has said it did not have sufficient data to incorporate data center water use into the projections for its 2027 state water plan.

However, the responses that did come in show the scale of the industry’s current reported water use.

In 2023, seven data center facilities reported using more than 144 million gallons combined — the municipal consumption of a small Texas town with a population of roughly 4,000 to 5,000 residents. In 2024, the number of facilities that completed the survey nearly tripled and the reported water usage was more than four times higher, with 19 facilities using more than 660 million gallons a year.

Last year’s results show that 97 facilities completed the survey, reporting a collective total of 1.4 billion gallons of water that year.

Those numbers reflect only the facilities that submitted surveys, not the industry's total water consumption.

Meta, a data center company, has submitted the survey for its Fort Worth facility the past two years.

“Transparency is a key pillar of Meta's water stewardship program and we completed the TWDB survey as required,” said a Meta spokesperson in an email. The North Texas facility consumes on average 72 million gallons a year.

“We commend Gov. Abbott's leadership on protecting water resources and promoting responsible data center development in Texas,” the spokesperson added. “Our Texas data centers use water-efficient cooling that minimizes consumption, and we fund projects across the state that restore hundreds of millions of gallons annually as we work toward restoring more water than we consume by 2030.”

With the next legislative session coming up in January, Guerra at Public Citizen said state agencies should take time to understand the industry's water use and the limits of the current reporting system.

“If we don't have a full picture, then how are we supposed to go into the legislative session and make meaningful laws to protect folks?” she said.

Disclosure: Houston Advanced Research Center and Meta have been financial supporters of The Texas Tribune within the past five years. The Texas Tribune is a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in our journalism. Find a complete list of them and more information about our financial and disclosure policies here.