New report warns Texas may not be ready for the data center boom

A new report by the Greater Edwards Aquifer Alliance (GEAA) warns that Texas may not be ready for the rapid expansion of data centers across the state. The analysis indicates that the Austin-San Antonio corridor has seen data center growth quadruple between 2023 and 2025. The report raises significant concerns about power consumption, noting that data centers in Texas already use enough electricity to supply over half of all Texas homes. This demand is projected to drive up statewide electricity usage by 70% within five years, reaching a critical point by 2031. Water usage is another key issue, with researchers estimating that Texas data centers could consume up to half a million acre-feet of water annually by 2030. Furthermore, the report highlights the financial strain of tax incentives, revealing that the state provided over $1 billion in tax exemptions to data centers last year, a figure expected to escalate to $9 billion by 2030. GEAA questions whether the data center boom is worth the associated costs in power, water, and tax incentives.