The high transmission line that bisects Torrie Martin's ranch hums subtly. Occasionally the frequency changes to a droning buzz that ends in a pop.
" You can actually hear the power plant right now," Martin said. "It's been pretty loud the last few years."
The Vistra Hays Power Plant is directly across the street from Martin's property. It generates around 990 megawatts of power, enough to power 250,000 homes. This facility is considerably larger than Austin's biggest power plant — Sand Hill Energy Center — which generates 595 megawatts.
The proximity to the power station makes Martin's neighborhood a desirable place to build data centers.
Data centers need a lot of power to operate, and, depending on how they're cooled, a lot of water too. As more and more data center developers submit proposals to build in Texas, questions about how they'll impact Texas' grid and contribute to drought conditions across the state are widespread.
So much so, that Gov. Greg Abbott effectively ordered a pause on all data center projects looking to connect to the grid until officials get a better grasp on the amount of resources they will use.
For Martin, these concerns aren't just hypothetical. A year ago, a developer approached the city of San Marcos with a request to build a data center behind her ranch. She and many other residents of the city opposed it.
" I love San Marcos," Martin said. "This is my home, and so I'm just standing up for it."
Martin grew up on the ranch in Hays County where she now tends to a herd of horses. She said, in this rural part of the county, power and water outages aren't uncommon.
"We do have brownouts kind of regularly and we get our water shut off at least twice a month, usually [for] two or three hours, sometimes more," Martin said.
A brownout is a reduction in power availability. It can cause lights to flicker and appliances like washing machines or microwaves to run sluggishly or make weird noises. Repetitive brownouts put extra strain on machines and can shorten their lifespan.
Martin attributes these outages to new development happening in her neighborhood. She thinks the county is failing to keep up with road maintenance and keeping development in check.
" [The county's] unable to give us water and power now," Martin said, staring at the site of the proposed data center. "How are [they] gonna keep up with this?"
Water use and utility costs are often major concerns when a new data center is proposed. A recent poll by Gallup News found that seven in 10 Americans oppose local construction of AI data centers. Half of those opposed cited water and power use as their primary reason.
In February, the San Marcos City Council voted on a request for rezoning the property behind Martin's ranch. Approving the request would have cleared the way for the data center developer eyeing the land.
Hundreds of people attended the meeting, which stretched into the early hours of the next day. Speakers were overwhelmingly opposed to the idea of data center development in the area.
After nearly eight hours of public comment, the council voted to deny the request for rezoning — effectively blocking the data center.
At the meeting, speakers shared their worries about power costs, loss of green spaces and the increased use of artificial intelligence in society.
But the most prominent concern for residents was about water.
The San Marcos River is a huge part of the town's identity, and some speakers wanted to know how the council was going to protect it. But it can be hard for local governments to know just how much water a data center will use.
Margaret Cook, the vice president of water and community resilience for the Houston Advanced Research Center, said there is an answer to how much water data centers are using.
Just not a satisfying one.
"The clear answer to the general question is it depends," she said.
Cook said it depends primarily on two things: how big a data center is and what cooling technology it uses.
Small-to-mid-sized data centers don't necessarily have to use more water than a large subdivision or golf course. All the data centers in Texas today use less than 1% of the state's water. For reference, Texas' manufacturing industry uses 7%.
That's rapidly changing as tech companies invest in AI data centers, which require more space, power and water to operate. Cook said by 2030, data centers could collectively consume anywhere between 29 and 161 billion gallons of water a year — accounting for 0.5% to nearly 3% of the state's total water use.
But Cook said these are rough estimates. How much water a data center actually consumes depends on what system it uses to cool its servers. Most data centers either use air or water, but Cook said because it's so hot in Texas, water is the preferred method.
"Water is much more efficient at cooling than air is," Cook said. "That's why on a hot day you'd probably rather jump in a pool than stand under a tree and try to get the airflow."
Many data centers rely on what's called evaporative cooling — a process that uses water to absorb heat from the servers.
Cook said evaporative cooling can be an energy efficient way of cooling a data center.
But even though some of the water can be reused, new water is needed regularly to replace the water that evaporates. Closed loop systems are better, but even those come with trade-offs, Cook said.
In a closed loop, a coolant gets moved through a data center, pulling heat off of servers. As the fluid moves through the system, it gets hotter and hotter — and something else needs to cool it back down.
"Use your body as an example: you can't cool down unless something takes heat off of you," Cook said. "So you're going to sweat, and … the air is going to pull the sweat off of you … and then your skin and your blood cool down, and that's a closed loop system."
Just like how your body cools itself, some data centers use an air chiller to cool down that fluid, which can limit a data center's overall water usage to things like landscaping and flushing toilets.
Some data centers use water to cool down that fluid. Cook said in that case, a closed loop system can "still be very water intensive." According to estimates from her team, data centers that use water to chill that coolant fluid could use up to half a billion gallons a year.
Not even state regulators know for certain how much water most data centers are using — and they have tried asking.
Earlier this year, the Public Utility Commission of Texas sent out a survey to collect information about water and energy usage among data centers and cryptocurrency mining facilities. Less than a third of the state's 341 data centers responded to the survey.
Connecting to the grid
Texas has had more success at figuring out how much electricity data centers use.
There are 248 known data centers planned for the state, according to an analysis from The Texas Tribune. They are reported to use anywhere from 5 megawatts to 11,000 megawatts of power when operating at full capacity, according to the same analysis.
For reference, 1 megawatt is equivalent to the amount of electricity it takes to power 200 homes.
The state's power grid operator, the Electric Reliability Council of Texas (ERCOT), has historically made it easy for new data centers to get up and running as long as the grid has enough electricity available. It would evaluate projects on an individual case-by-case basis as requests for electricity came in.
But doing that has become increasingly difficult as more and more developers look to build data centers and connect to the state's grid.
As of April, ERCOT had requests for more than 400,000 megawatts of electricity from the grid. Nearly 89% of those requests came from data center developers, according to the organization.
"All of that is definitely not going to come online, but the question is, well, how much of it will?" Brian Korgel, the director of the Energy Institute at University of Texas at Austin, said.
That uncertainty is a cause for concern for some people.
ERCOT, which is overseen by the PUC and the Texas Legislature, knows it needs to expand the state's power grid to account for all these new connection requests. But it doesn't know by how much, especially considering that large power users, such as data centers, often pop up in clusters.
"You're not just going to add one new data center here, you're probably going to add five or six in that location," Korgel said. "So [ERCOT is] moving to a new way of reviewing those projects. They're calling it a 'batch process' where they will review like a cluster of proposed data centers in a geographical region."
ERCOT approved this "batch process" in June and stopped evaluating requests on a project by project basis.
"Texas is experiencing an energy transformation unlike anything we have seen before," ERCOT President and CEO Pablo Vegas said at the time.
"This new process represents a fundamental shift in how ERCOT manages the significant growth of large load interconnection, providing a structured, transparent path forward that protects reliability for Texans while supporting the state's continued economic growth."
That same month Gov. Greg Abbott directed ERCOT and the PUC to require data centers to fully fund the costs of the electric infrastructure they need to operate, so as not to pass on the costs to homeowners.
The PUC responded to the governor in July, saying it was working on enforcing this requirement. It also put together a list of suggestions for state lawmakers to tackle during their next legislative session, which starts in January. One suggestion is to require data centers to register with the PUC so the state has accurate information about their electricity and water use.
In August, Abbott also directed the agencies to audit all data centers advancing through ERCOT's interconnection process to make sure they are complying with the requirement. No data center project was to move forward until the audit was completed, he said.
Ultimately, however, Korgel said he believes people should be less concerned about the reliability of the state's power grid and more concerned about whether or not communities are willing to welcome so many data centers to the state.
"It's not really 'can the grid — is the grid going to break' or whatever. Because ERCOT and the utilities are not going to let the grid break," he said. "What's going to happen is that data centers won't get built and things like that. So the big question is 'can Texas keep up with this economic development or promise of economic development?"
What does this mean for the average customer?
Besides grid concerns, people are worried about how data centers might further drive up electricity costs.
"Retail electric prices have gone up 20 to 25% since 2020. In Texas alone, they've gone up 29%," Alison Silverstein, a former state and federal energy regulator, said.
Aging infrastructure, supply chain issues and high demand projects — like data centers — are all contributing to increased energy costs. High demand projects require more high-voltage transmission lines and power plants to operate.
"Those cost increases within ERCOT for transmission are assigned across every retail customer in Texas, so there is no escaping those," Silverstein said.
Some developers have started including power generation as part of their data center proposals. Silverstein explained that won't necessarily bring costs down.
"Even if they are buying and building all these energy resources...inside the fence of the facility... they are still increasing costs for everybody," Silverstein said.
Demand for equipment like gas turbines and transformers has gone up since 2022. The wait time to receive a new turbine can be up to seven years, according to an analysis from S&P Global.
The short supply has resulted in steep competition for these resources, but Silverstein said data centers are mostly "cost indifferent," meaning they can spend more and out-bid competitors. Which also means sellers can bump up the price.
This cost indifference extends past equipment.
" Data centers are paying way more than you or I or a local utility could to hire electricians and plumbers and carpenters," Silverstein said. "[That] affects everything we do in our community in terms of building and fixing stuff."
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