What's Happening?
The San Antonio Water System (SAWS) is contemplating significant policy changes regarding water usage and fees for data centers, following a push by the San Antonio City Council to regulate the fast-growing industry. SAWS plans to propose a new fee structure
for high-volume users of its recycled water system, often referred to as 'purple pipes,' which carry non-potable treated wastewater. While current data center water use is manageable, projected growth from new facilities could significantly increase demand for both potable and recycled water. Donovan Burton, senior vice president of water resources and governmental relations, stated that the recycled water system requires improvements, and the proposed changes aim to fund these projects. SAWS currently encourages recycled water use by making it cheaper than drinkable water, but this system needs adjustment as demand grows.
Why It's Important?
These proposed changes by SAWS are crucial for managing San Antonio's water resources, especially in a region prone to drought and increasing population. Data centers are significant water consumers, primarily for cooling, and their rapid expansion poses challenges to existing water infrastructure and supply. By adjusting fees and policies, SAWS aims to ensure that 'growth pays for growth' and that the recycled water system can be expanded and improved to meet future demands sustainably. This move could set a precedent for other U.S. cities facing similar pressures from industrial growth and climate change, highlighting the need for innovative water management strategies. The changes will impact data center operators by potentially increasing their operational costs, but also by ensuring a more reliable and sustainable water supply in the long term.
What's Next?
SAWS plans to bring a proposal for a 'fee by agreement' structure to its board within the next three to four months, which would require City Council approval. This interim measure would bridge the gap until new impact fees, which require a lengthy state-mandated cost of service study, can be implemented, likely by 2028 or 2029. Additionally, SAWS staff will present changes to utility service regulations this year to clarify that the utility is only required to provide potable water service, allowing them to deny large recycled water requests. They are also exploring options to require data centers to have their own backup water storage and to classify them as 'significant industrial users' for wastewater pre-treatment. A recycled water master plan, assessing system needs, is expected by the end of 2027.
Beyond the Headlines
The San Antonio Water System's actions reflect a broader national trend where municipalities are grappling with the environmental impact and resource demands of rapidly expanding industries, particularly data centers. The debate over water usage by data centers extends beyond San Antonio, with some areas attempting to ban them entirely due to concerns about water scarcity and energy consumption. This situation underscores the tension between economic development and environmental sustainability. SAWS's approach of balancing incentives for recycled water use with cost recovery and infrastructure investment could serve as a model for other regions. However, it also highlights the complex challenge of ensuring essential resources like water are managed equitably and sustainably for all stakeholders, including residents, agriculture, and industry, in the face of climate change and population growth.
