Honest Concerns
Worth Taking Seriously
These concerns are real. They're also being addressed, though not uniformly and not fast enough. This section doesn't spin the challenges — it names them clearly, alongside what's actually moving.
Water Usage
U.S. data centers consumed an estimated 17 billion gallons of water directly for cooling in 2023. A typical 100 MW hyperscale facility uses roughly 530,000 gallons per day — equivalent to about 6,500 homes. During peak summer, that can triple.
For context, thermoelectric power plants withdraw 103 billion gallons per day, and U.S. agriculture accounts for 70–74% of water consumption in western states. Data centers are a fraction of that — but national averages don't help a community watching its drinking water supply drop. When a single company's planned campus needs up to 8 million gallons per day from the same reservoir serving 300,000 people, scale comparisons lose their comfort.
The core issue is that most facilities still use evaporative cooling of potable municipal water. That's a choice, not a technical necessity. The technology to eliminate it already exists and is being deployed — just not fast enough or uniformly enough.
What's Changing
Microsoft committed to zero-water cooling for all new builds starting August 2024, saving over 125 million liters per facility annually. Meta's newest facilities use closed-loop liquid cooling with effectively zero operational water use. AWS uses recycled water at 24 locations with plans to expand to 120+.
Marana, Arizona has banned municipal water for data center cooling entirely. Tucson requires water conservation plans. A Virginia court ruled in November 2025 that water usage data is not a trade secret — establishing a precedent that public resources require public disclosure.
The EU's Energy Efficiency Directive is creating the forcing function: mandatory waste heat reuse for new facilities, with escalating requirements through 2028. The U.S. has no equivalent federal standard yet.
Consumer Costs
PJM Interconnection — the grid operator serving 67 million people across 13 states — saw capacity auction prices surge 1,150% in two years. Data center demand drove 63% of the 2025/2026 price increase, accounting for $9.3 billion in additional costs. Across three consecutive auctions, data center-related costs totaled $21.3 billion.
In Virginia, the State Corporation Commission approved base rate increases adding roughly $11.24/month to average residential bills. Some residents reported winter 2026 bills of $343 versus $164 the prior year. Nationally, residential electricity prices jumped 11.5% in 2025 alone — outpacing inflation.
The structural problem: 95% of data center interconnection costs in PJM have been rolled into general transmission charges paid by all ratepayers. Data centers currently pay roughly 5.5¢/kWh in Virginia while homes pay 9–14¢.
What's Changing
Virginia's State Corporation Commission created a new rate class effective January 2027 requiring data centers above 25 MW to pay 85% of contracted transmission and distribution costs, with 14-year commitments. Ohio, Georgia, and other states are implementing similar participant-funding requirements.
FERC issued a landmark order in December 2025 finding that current cost allocation is "unjust and unreasonable" — directing that costs must be allocated to those who cause them. The DOE has set an April 2026 deadline for rulemaking on 100% participant funding for large loads. More than 300 data center bills were filed across 30 states in early 2026. The direction is clear; the pace is the question.
Transparency
81% of Virginia localities hosting data centers have signed NDAs with operators. Governors in Virginia, California, and New Jersey vetoed transparency legislation in 2025. Projects move under code names. Officials discover they're bound by NDAs only when a developer's lawyer tells them so.
This matters because water and energy consumption are public resource questions. The argument that disclosing how much municipal water a facility uses would reveal trade secrets has not held up in court — and shouldn't.
What's Changing
Minnesota became the first state to enact comprehensive data center regulation: mandatory disclosure of electricity and water use, participant funding for infrastructure costs, 65% carbon-free energy requirements. A Virginia circuit court ruled that water use data is public information, not proprietary — the first ruling of its kind. EU regulations already require monitoring and reporting for facilities above 500 kW. The bar is rising.