Report says Texas may be unprepared for data center boom

The Greater Edwards Aquifer Alliance has released a new report warning that Texas may be unprepared for its rapid data center boom, questioning the costs associated with this growth in electricity, water, and tax revenue. The analysis indicates that the San Antonio-Austin corridor has experienced a four-fold increase in data center development between 2023 and 2025, ranking the region among the top global markets for expansion. This growth is largely driven by massive facilities for artificial intelligence and cryptocurrency mining, which consume energy on an enormous scale. According to the report, data centers in Texas already utilize enough power to supply over half of all Texas homes. Projections suggest these facilities could drive a 70% increase in statewide electricity demand by 2031, placing immense strain on a power grid that experts believe was not designed to accommodate such industrial expansion. Water resources are also at significant risk. Cooling these vast data centers could require substantial amounts of water, yet these facilities are not mandated to disclose their usage. Researchers estimate that Texas data centers could consume approximately 494,000 acre-feet of water annually by 2030, a considerable amount given that one acre-foot covers one acre a foot deep. Furthermore, the report highlights the significant financial burden on taxpayers. Data center tax exemptions cost the state over $1 billion last year alone, with this figure projected to reach at least $9 billion between 2025 and 2030. This projection does not account for additional exemptions granted by local city and county governments.