Residents hold signs during a press conference following a Taylor City Council meeting on July 9. Grassroots groups have pushed local governments to reevaluate the rapid rise of data centers in Texas. The call has reached Austin, with council members considering a water conservation requirement for large water users.
Sara Diggins/Austin American-Statesman
Austin could require new data centers to create water conservation plans and end some non-disclosure practices for such developments as it looks for ways to reduce the impacts of the fast-growing, resource-hungry industry.
The Austin City Council is set to discuss a resolution this week in response to a call by Mayor Kirk Watson and four council members to find ways to reduce the strain on resources caused by large industrial customers such as the centers popping up in response to demand for computing power to support the artificial intelligence boom.
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In this photo provided by Amazon, an Amazon Web Services technician passes an AWS UltraServer in Austin in October.
Noah Berger/Tribune News Service
A pair of rooftop chillers are installed atop a data center building under construction in March in Garland. One data center on the NTT Data center campus will take 40 of the water-filled chillers to cool the equipment inside.
Tom Fox/Dallas Morning News
With its moves, Austin is joining an increasing number of local governments that are weighing responses as Texas becomes the fastest-growing data center market in the nation.
RELATED: Texas Data Center Tracker: See where data centers are planned or operating near you
The call for creation of the resolution to be considered Thursday came after the council agreed to create an “active, progressive economic development policy” focused on 10 target sectors, including advanced manufacturing, aerospace technology, clean energy, data management and artificial intelligence. Part of that effort will involve evaluating how Austin’s energy and water supplies could be affected by industrial growth.
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The resolution will ask City Manager T.C. Broadnax to create an application process for customers who require more than 85 million gallons of water per year. The application may require large water users to create conservation strategies such as connecting to reclaimed water systems or using their own closed-loop systems for cooling the servers housed within data centers.
It also calls on Broadnax to create an annual water usage report on large users to detail water usage by month and by customer. If passed, the city manager would also analyze how data centers could impact Austin Water customers, with findings to be presented in December.
Among elements, the resolution also calls for evaluating whether to allow data center developers to continue using nondisclosure agreements. The practice is commonly used to shield the name of companies leasing server space or otherwise involved with the projects.
DIVE DEEPER: Texas is best positioned for AI data center boom, study says
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“This will allow us to go forward in a thoughtful way yet get things moving,” Watson said. “We’re addressing something important that shouldn’t be rushed. We want and need it to be tight and right.”
Opposition to data centers
Texas stands to see billions of dollars in investment from the boom of data center development drawn by the state’s ample supply of land, access to energy and, until recently, a welcoming political atmosphere. Facing voter backlash, state and local officials have begun raising concerns about potential strains on infrastructure in a state facing water shortages and whose power grid is struggling to keep up with growth.
Gov. Greg Abbott — who earlier declared Texas “the epicenter of AI development — recently called for a pause on data center development in rural areas. Such a prohibition would go beyond a sweeping regulatory framework he unveiled in June, which called for data centers to add new power generation to the grid, pay for their own infrastructure costs, reuse their own water and to limit their impact on residential communities.
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The Austin-San Antonio area has become the epicenter of the state’s current growth. More than 70 projects were operating or in the works between Temple and San Antonio as of May, according to data maintained by the Austin American-Statesman, with about 5,600 megawatts currently under construction in the Austin and San Antonio metro areas. That includes about 20 centers in Austin and more in San Antonio.
Other cities have struggled to find appropriate responses. Among them:
Lockhart, about 30 miles south of Austin in Caldwell County, last week directed city staff to develop stricter standards for data centers amid resident’s calls to stop at least five projects planned or under construction in the area.
Taylor, about 30 miles north of the city in Williamson County, is reevaluating its zoning code to prohibit data centers after taking no action on a resident-led petition calling for a ban on data center developments.
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Hays County approved a six-month pause on approvals for the developments after its county seat, San Marcos, decided to outright ban data centers from its zoning code.
Henderson, Hill, Hood, Somervell and Van Zandt counties have all weighed data center moratoriums and made calls for either a special session or for the issue to become a top legislative priority when lawmakers convene early next year.