What to know about water and power use by data center

In South Bend, Indiana, the development of data centers by Amazon Web Services and Microsoft has spurred community discussion regarding their environmental impact, particularly concerning electricity and water consumption. Local officials, including county representatives and Indiana Michigan Power (I&M), have implemented safeguards to mitigate these impacts. County scientists have studied the local aquifer's recharge rate, leading to a cap on daily water withdrawals for all users, including data centers, set at half of the safe daily yield. On the energy front, Indiana Michigan Power, in conjunction with state legislation and a settlement, aims to protect existing customers from rate hikes. House Enrolled Act 1007 (2025) mandates that major electricity users, such as data centers, cover at least 80% of new generation or infrastructure costs. Furthermore, a 2024 settlement between I&M, AWS, and Microsoft established new contract and payment terms, which I&M will present to the Indiana Utility Regulatory Commission this summer as part of a rate case expected to reduce electric rates by 2027. Developers like AWS and Microsoft are actively collaborating with utilities to fund grid upgrades and system improvements, enhancing overall reliability. Jeff Rea, president and CEO of the South Bend Regional Chamber, emphasizes that both Amazon and Microsoft are committed partners who share community goals regarding aquifer and power grid protection. He highlights their strong track records and public sustainability commitments, including AWS's goal for 100% renewable energy operations and water-positivity by 2030, and Microsoft's targets to be carbon negative and water positive by the same year. Both companies are implementing advanced cooling technologies and investing in watershed restoration and water reuse to meet these ambitious environmental goals.