San Marcos City Council Denies Data Center Project Over Water Concerns
The San Marcos City Council denied a proposed data center project, citing its annual water consumption of 25 million gallons. This decision reflects growing concerns about water usage and power grid strain, which have led to increasing data center project denials and moratoriums across Texas and other states. Communities are grappling with balancing development opportunities against environmental impacts.
The San Marcos City Council voted 5-2 to deny a proposed data center project, citing its projected annual water usage of 25 million gallons. This decision, made on February 18, comes as the city has experienced drought in recent years and is also considering the cumulative impact of three other data center projects, including Sabey at Carson Select, Highlander SM One at Maberry, and CloudBurst, which are in motion within the greater San Marcos area.
According to data from AsimovGrid, opposition to data center developments has surged, with 81 actions reported in the first five months of 2026, up from just three in 2024. Project denials when reaching a public vote are at 76%, with water consumption worries accounting for 25% of these rejections, and power grid strain for 30%. This trend has resulted in over $70 billion in proposed data center investments being denied, blocked, or legally challenged across 40 states.
Despite Texas typically being considered developer-friendly, the state has seen 16 moratoriums and denials, largely due to a statewide water problem. While Texas has allocated up to $20 billion to address water infrastructure, projected needs over the next 50 years are estimated at $174 billion. The article suggests that by denying data center projects, communities like San Marcos might miss opportunities to secure investments that could help improve local water systems.