Capital Keeps Pouring In. Communities Are Closing the Gate.

Texas's datacenter water reckoning is arriving on two fronts simultaneously. The Houston Advanced Research Center (HARC) published a report estimating Texas data centers consumed roughly 25 billion gallons of water in 2025, a figure that could balloon to as high as 161 billion gallons annually by 2030, while the Public Utility Commission of Texas (PUC) agreed on Feb. 6 to distribute the state's first water-use survey for data centers and crypto mining facilities this spring. Together, these developments mark the moment Texas water moved from background concern to active regulatory and political flashpoint for the datacenter industry.

The PUC is coordinating with the Texas Water Development Board on questions covering total water usage, cooling methods, power sources, and sourcing details. State Rep. Armando Walle (D-Houston), who embedded the directive in last year's state budget, called it a "softer approach" than direct legislation. But HARC's Margaret Cook flagged a critical gap: the survey covers existing operations and doesn't require projections from the massive pipeline of facilities under construction.

A separate HARC/University of Houston policy brief cited by Texas Public Radio uses even more aggressive estimates, projecting consumption could reach 399 billion gallons (roughly 7% of state water use) by 2030. The wide variance between projections reveals how little hard data exists. Yi Ding at Purdue found two-thirds of new U.S. data centers since 2022 have been sited in water-scarce regions, including Texas. Julie Nahrgang of the Water Environment Association of Texas warned: "There's no Texas miracle without available water." Risk: The survey has no clear enforcement mechanism beyond budget-rider authority, participation rates are uncertain, and the absence of forward-looking demand data means regulators could be flying blind as commitments lock in open-loop cooling designs at scale.

Fort Worth City Council tabled a vote on Black Mountain's request to rezone 80 additional acres for its planned $10 billion data center campus. Fort Worth City Council member Chris Nettles pushed the return date to March 10, demanding "real clarity of what the whole complex is going to look like." Meanwhile in Brenham, more than 100 residents packed a meeting to oppose a tax abatement for French firm Viridien's 45 MW data center; the council rejected the reinvestment zone to cheers, though Viridien says it will proceed without incentives. In Abilene, roughly 6,000 Stargate construction workers have flooded a metro of just over 100,000, triggering a housing affordability crisis and rent spikes.

Three different cities, three different objections: resource strain in Fort Worth, inadequate tax tradeoffs in Brenham, housing displacement in Abilene. Developers are losing votes they didn't know were happening. Black Mountain CEO Rhett Bennett told Fort Worth council the project will rely on both well water and municipal supply; environmental justice advocate Letitia Wilbourn criticized the company for failing to engage neighboring communities. The through line: developers who don't engage early on water and housing aren't just facing delays. They're facing rejection, regardless of project size.

TVA reversed course on retiring its Kingston and Cumberland coal plants, with CEO Don Moul citing datacenter demand that grew to 18% of TVA's industrial load in 2025 and is expected to double by 2030. Separately, President Trump signed an executive order directing the Pentagon to prioritize coal-fired electricity purchases for military installations, framing on-site fuel inventories as a national security advantage. The EIA reports coal generation rose 13% in 2025 but projects a 5% annual decline going forward.

These moves create a tightening dynamic: if DOD locks up coal capacity through long-term PPAs while utilities keep plants running to serve datacenter load, available generation for new commercial customers could narrow in coal-dependent regions. Kingston is the site of the 2008 coal ash spill. Keeping it online to serve datacenter load invites both environmental litigation and community backlash. And the Pentagon coal order? Still no contract specifics, and it may conflict with competitive procurement rules.

SOLV Energy debuted at a nearly $6 billion valuation, shares opening at $30 versus a $25 target, making it the first pure-play solar and storage EPC to go public in the U.S. Its nearly $8 billion backlog is driven by utilities and IPPs building for gigawatt-scale datacenter clusters. CEO George Hershman cited "historic growth" from datacenter load and manufacturing reshoring. The IPO joins filings from Fervo Energy and Forgent Power. Bloomberg Intelligence's Rob Barnett called the clean energy rally "a little contrarian" given federal renewables rollbacks, but solar and storage remain the cheapest and fastest generation to deploy. Risk: The global transformer shortage, expected to persist until at least 2030, and a federal permitting blockade from the Interior Department affecting 43% of planned U.S. power capacity (per the Solar Energy Industries Association) could constrain the very pipeline SOLV is betting on.

Oregon enacted higher datacenter electric rates last year; Delaware, Florida, and Oklahoma have advanced similar legislation. Oklahoma Republican state Sen. proposed a moratorium on new data centers until late 2029. Rep. Brad Boles (R-OK) is drafting a bill to ensure data centers "pay for their own infrastructure." Consumer advocates have already accused Oregon's largest utility of shifting datacenter supply costs onto residential ratepayers.

Texas isn't named in this legislative wave, but the trend is directly relevant: ERCOT's deregulated market creates different cost-shifting dynamics, and Texas's competitive posture could attract developers fleeing states with new rate guardrails, concentrating even more load on the Texas grid. Watch what happens if this wave spreads: developers flee regulated states, load concentrates in the shrinking number of welcoming jurisdictions, and Texas absorbs the overflow.