Are Data Centers Draining Us Dry?
Let's Talk About The Water Crisis That Has Been Hiding in Plain Sight
The data center boom is reshaping American infrastructure at unprecedented speed. Without immediate regulatory reform and strict cost allocation, communities will continue subsidizing Big Tech’s expansion while facing their own water and energy crises.
The headlines are everywhere:
AI Data Centers Accused of Creating Major Problems for Local Water Systems
AI Data Centers Boom is Draining Water From Drought-Prone Areas
Artificial Intelligence: Big Tech’s Big Threat to Our Water and Climate
As AI Data Centers Multiply Across the Mountain West, so do Fears Over Water Use
Controlling water use in data centers is a major sustainability challenge, especially in water-stressed regions.
Notably, data centers have been using our drinking water.
“As of 2023, nearly 80 percent of the water consumption of Google AI data centers in the U.S. came from drinking water sources,” said Ben Murray, a Food & Water Watch senior researcher. In places like Arizona, data centers’ water consumption is worsening existing water scarcity problems.
This week, California Governor Gavin Newsom vetoed legislation that would have required data centers to report how much water they use. The centers generate tons of heat and can use large quantities of water to cool their servers and interiors. Many companies don’t reveal how much they use.
Assembly Bill 93, introduced by Assemblymember Diane Papan, would have required new data centers to disclose their expected water use when they apply for a business license and would have required all to report their water consumption annually.
“As the global epicenter of the technology sector, California is well positioned to support the development of this critically important digital infrastructure in the state,” Newsom wrote in a statement. “I am reluctant to impose rigid reporting requirements about operational details on this sector without understanding the full impact on businesses and the consumers of their technology.”
The bill was opposed by business groups including the Data Center Coalition.
Why Water Is Used in Data Centers
Data centers generate a lot of heat (from servers, power, networking). To maintain reliability and performance, that heat must be removed. Water is often used because of its high heat capacity and efficiency in cooling systems (e.g. evaporative cooling, cooling towers, chilled water loops).
Much of that water comes from drinking water sources, but there are other ways to keep data centers cool. Developers can use innovative water management techniques to reduce water consumption, including closed-loop cooling systems, immersion cooling, air cooling, and using non-potable water sources (e.g., recycled wastewater and captured water).
Data centers can also draw power from renewable energy sources, like solar or wind, which require significantly less water consumption than obtaining energy from fossil fuel power plants.
A Look At Power
Data centers already gobble up more than 4 percent of America’s electricity. By 2028, that could skyrocket to 12 percent. And here’s the kicker—every electron of that power requires water. Not a little water. A LOT of water.
In 2023, data centers consumed 66 billion liters of water directly to cool their servers. That’s the direct hit. But the real scandal? The indirect water use to generate all that electricity: 800 billion liters. That’s enough water to fill 320,000 Olympic swimming pools.
From Arizona to Minnesota, from Georgia to New Jersey, communities are pushing back. Because while their wells run dry and their water bills spike, Big Tech is building bigger, thirstier facilities at breakneck speed.
Now, here’s where it gets really dirty. The utility companies and Big Tech have cooked up a scheme.
When a massive data center, and we’re talking facilities that need 100 to 1,000 megawatts of power, needs to connect to the grid, somebody has to build the transmission lines. Guess who’s paying for it? Not the data centers. YOU are.
In seven states served by the PJM regional grid, Illinois, Maryland, New Jersey, Ohio, Pennsylvania, Virginia, and West Virginia, utilities pushed through over 150 transmission projects in just three years. The cost? $5 billion and some change. And 95 percent of those costs are being spread across every customer’s electric bill.
Your grandmother on a fixed income is subsidizing Google’s AI experiments. Your neighbor struggling to pay rent is bankrolling Amazon’s cloud services. That single mom working two jobs is funding Microsoft’s data centers.
Only 5 percent of these projects, 6 out of 130 in 2024, were actually paid for by the data centers themselves, according to a report from the Union of Concerned Scientists.
Follow the Money
The utilities and regulators have created a shell game that would impress a street hustler. Here’s how they hide the money trail:
The costs get buried in “regional transmission plans.” They’re reported to federal regulators with no breakdown showing which customer caused which costs. Then they get passed down to state regulators who approve rate increases for “transmission costs” without knowing, or asking, why those costs suddenly exploded.
It’s the perfect crime. No fingerprints. No paper trail. Just your bill going up while Big Tech’s profits skyrocket.
One Pennsylvania utility admitted the quiet part out loud: revenues from data centers only lower rates for the largest customers, but the costs? Those get spread to everyone.
For a decade, America’s power sector was getting better for our water. We moved away from coal to wind and solar, which are energy sources that use almost no water. Natural gas plants became more efficient. The risk to our water supplies was dropping.
Now we’re going backward.
The Trump administration is canceling wind farms that are 80 percent complete. They’re keeping coal plants open that were supposed to close. And all because data centers need power now.
Here’s the vicious cycle: AI servers generate massive heat. To cool them efficiently, data centers use water. Lots of water. When they try to conserve water by using air cooling instead, it gobbles electricity. Where does that electricity come from? Increasingly, from coal and natural gas plants that themselves need water for cooling.
It’s a water crisis wrapped in an energy crisis, tied up with a bow of corporate greed.
The “Efficiency” Con
Google loves to brag that their processors now generate six times more computing power per unit of electricity than five years ago. Microsoft touts similar numbers. Meta, Amazon… they all do.
Here’s what they’re not telling you: despite all those efficiency gains, total data center energy demand more than doubled between 2017 and 2023.
It’s like bragging that your car gets better gas mileage while you’re driving it ten times as far. The efficiency doesn’t matter when you’re consuming at an exponentially higher rate.
What We Can Do About It
Like Bill Paxton in that dramatic scene in Twister, when they tell him the tornado is coming, he says, “It’s already here.”
AI data centers are here, and this boom is likely to lead is into a new generation of power infrastructure.
1. Make Big Tech Pay Its Own Bills
Federal Action Required: The Federal Energy Regulatory Commission (FERC) needs to require that transmission lines built for single customers must be paid for by those customers. Period. This is already the rule for power generators, and it should be the rule for data centers too.
If a data center needs a billion-dollar transmission upgrade, that data center should write the check. Not your grandmother. Not the restaurant owner down the street. The company causing the cost.
2. End the Shell Game
Regulatory Transparency: State public utility commissions and FERC must require utilities to track and report which customers are causing which transmission costs. No more burying data center costs in general “transmission upgrades.”
Create a specific customer class for these massive users. Track their costs separately. Report them separately. Bill them separately.
3. Water Impact Assessments—Before, Not After
Communities need the power to demand comprehensive water impact assessments before any data center breaks ground. Not the industry-funded whitewash studies, but independent assessments that look at both direct water use and the indirect water needed for electricity generation.
And here’s the critical part: communities need the power to say NO. If a region is already water-stressed, the answer should be “build somewhere else.”
4. Mandate Water Efficiency
Data centers in water-stressed regions should be legally required to use air cooling, not water cooling, even if it costs them more in electricity. And they should be required to pay for renewable energy to power those air cooling systems, not coal or natural gas.
Some regions of the country have water to spare. Others don’t. Data centers should be steered toward water-abundant areas through tax policy, zoning, and utility rates that reflect the true cost of water.
5. End Subsidies
Stop giving tax breaks to data centers. Stop giving them discounted electricity rates. Stop building transmission lines for them on the public dime.
If Big Tech wants to build AI empires, they can do it without picking our pockets.
6. Heat Recovery Requirements
It’s 2025. The technology exists to capture and reuse the waste heat from data centers for district heating, greenhouse operations, or industrial processes. This should be mandatory for all new facilities and retrofitted into existing ones.
Wasting heat is wasting water. We can’t afford either.
7. State Legislation
We need state laws like Maryland’s Next Generation Energy Act and Oregon’s POWER Act that specifically address data center costs and require utilities to allocate connection costs appropriately.
Every state needs to pass similar legislation. Now. Not after billions more get passed to ratepayers.
8. Public Disclosure Requirements
Data centers should be required to publicly disclose their water usage and energy consumption annually. No trade secret exemptions. No privacy carve-outs. If you’re using public resources, the public has a right to know how much.
Sunlight is the best disinfectant.
The Bottom Line
I’m not anti-technology. These steps are about basic fairness. If you cause the cost, you pay the cost. That’s not radical. That’s common sense.
We can slow Big Tech from draining America’s water supplies, but only if we fight back. The data centers aren’t going away, but the free ride needs to end.
The question is: Are we going to stand up and demand accountability? Or are we going to watch our water disappear while our bills go up?
We’ve been warned. Now we need to act.
Additional Reading
Data Center Energy Demand Is Putting Pressure on U.S. Water Supplies —Circle of Blue
Connection Costs: Loophole Costs Customers Over $4 Billion to Connect Data Centers to Power Grid —Union Of Concerned Citizens
What’s happening in your community with data centers? Let us know in the comments below.