Data center energy and water use

Full Title:
Data Center Water and Energy Transparency Act of 2026

Summary#

This bill would require large data centers to report their on-site energy and water use to state governments, or to the Environmental Protection Agency (EPA) together with the Departments of Energy and Agriculture if the state has no reporting program. The goal is to create a public, aggregated view of how data centers use electricity and water and how that use may affect communities and resources.

  • Main change: Data center operators with facilities that have a peak demand of 25 megawatts or more must file annual reports with monthly energy and water use, sources of power and water, and efficiency measures (including power usage effectiveness and water usage effectiveness).
  • Operators building or expanding facilities that will meet the 25-megawatt threshold must file projected 5‑year energy and water use and plans to reduce use.
  • If a state collects the data, the state sends anonymized, aggregated summaries to the EPA and the two Departments. If a state does not collect data, operators report directly to the EPA and the Departments.
  • The EPA and the Departments must publish an annual public report with regional totals, projections, impacts on rates and the environment, and recommendations for best practices.
  • States may charge fees to run their collection programs. The EPA and Departments may charge fees to operators who report to them and may use those fees without further appropriation.
  • States may enforce their own reporting rules; the federal agencies may fine operators $20,000 per day for negligent failure to report to the federal program (with periodic inflation adjustments).

What it means for you#

  • Large data center operators: If you run a data center with a peak demand of 25 MW or more, you must file annual reports showing monthly energy and water use, water and power sources, average PUE and WUE, five-year projections, and plans to reduce use. If you are planning a new build or expansion meeting the 25 MW threshold, you must submit projected 5‑year use and efficiency plans before starting.
  • Operators in states without a reporting program: You will report directly to the EPA and the Secretaries of Energy and Agriculture, rather than to the state.
  • Smaller data centers: Facilities under the 25 MW peak demand threshold are not covered by the reporting and projection requirements in this bill.
  • States and local governments: States that set up collection programs will receive the detailed reports and may charge fees to cover collection. Local governments can request reports or access them if the state program allows.
  • Communities and consumers: The EPA and Departments will publish regional, anonymized data on data center energy and water use, possible impacts on utility rates and water supply, and recommendations for reducing adverse impacts. This is meant to inform planning and public awareness.
  • Companies planning expansions: Prospective builders must include projected energy and water use and reduction plans when the project is expected to meet the 25 MW threshold.

Expenses#

No publicly available information on total cost estimates is provided in the bill text.

  • State fees: States may charge fees to data center operators to support collection and enforcement costs.
  • Federal fees: The EPA and the Departments may assess fees on operators who report to the federal program and may use those fees without further appropriation to run the program.
  • Fines: Federal fines for negligent failure to report to the federal program are set at $20,000 per day, adjusted every three years for inflation. States may also issue fines under state law.
  • Likely compliance costs: The bill requires monthly measurements, projections, and reporting. This could mean costs for operators to measure, record, and submit data and to prepare reduction plans. The bill does not quantify those costs.
  • Agency costs: The EPA and the Departments will need staff and systems to receive reports, aggregate data, and publish the annual public report. The bill does not provide a cost estimate; it authorizes fees rather than direct appropriations for federally collected reports.

Proponents' View#

The bill appears intended to improve knowledge and planning around the growing energy and water use of large data centers. Possible arguments in favor, based on the bill text, include:

  • Greater transparency about monthly and regional energy and water use by data centers could help states, utilities, and communities plan for supply and rate impacts.
  • Requiring five-year projections and reduction plans may encourage operators to adopt efficiency measures and reduce strain on local resources.
  • Aggregated, anonymized federal reporting can inform national and regional policy, and provide best-practice recommendations to limit environmental and rate impacts.
  • Allowing states to collect data first respects state authority, while a federal backup ensures coverage in states that do not act.

Opponents' View#

The bill text leaves room for questions and possible concerns, such as:

  • One concern is the compliance burden on data center operators. The bill requires monthly data, efficiency metrics, projections, and reduction plans, but it does not specify measurement methods in detail beyond referencing existing standards. This could create costs and administrative work for operators.
  • The bill does not clearly explain how proprietary or commercially sensitive information will be handled at the state level. While the federal public report must omit information the agencies jointly deem proprietary, state reporting requirements and public access rules may vary.
  • The interplay between state and federal enforcement is unclear. States may enforce their own programs, but federal fines apply only when operators report to the federal agencies because a state has no program; the bill does not fully describe oversight of inconsistent state requirements.
  • The definition of the 25 MW threshold and how peak demand is measured is based on referenced law and standards; the bill does not spell out measurement timing or methods, which could create uncertainty.
  • The $20,000-per-day federal fine for negligent violations is substantial. The bill does not define the standard for negligence in practice or provide examples of when federal enforcement will be used versus state enforcement.