What Homeowners & Homebuyers Should Know
Data Centers in Texas: What Does It Take to Operate One?
Now that we know what a data center actually is, let's talk about what it takes to keep one running.
And this is where I started thinking:
Okay...this is bigger than a building full of computers.
Those computers operate around the clock.
They require electricity.
They generate heat.
They have to be cooled.
And depending on the facility and its cooling system, water may be an important part of that equation.
So if I were a homeowner living near a proposed data center, these are some of the questions I'd want answered.
Let's start with electricity.
Data centers can be extremely large electricity users.
Texas is already dealing with a major increase in electricity demand from data centers and other large-load customers.
In August 2026, Gov. Greg Abbott directed PUCT and ERCOT to audit roughly 250–300 large-load projects moving through the state's interconnection process, most of them data centers. State officials said the projects under review represent an enormous amount of potential future electricity demand.
But here's a very important distinction:
A request for power is not the same thing as a completed data center.
Projects can change, be delayed or never be built.
Still, the size of the requests explains why Texas is taking a closer look.
Why does electricity matter so much?
Remember all those computers?
They use electricity.
And the electricity ultimately becomes heat.
A large data center may require substantial electrical infrastructure to serve it, potentially including substations and transmission upgrades depending on its location and size.
That's why, when I hear about a proposed data center, I don't just want to know:
“How much electricity will it use?”
I also want to know:
“How will it get that electricity?”
Will existing infrastructure be enough?
Will a new substation be needed?
Will transmission lines need to be added?
What does the utility say about capacity?
Those are community questions—not just data-center questions.
And then there is Texas weather.
This one matters to me personally.
I've lived in Texas long enough to know that the question isn't always if we will have an extreme weather event.
It's when.
Hurricanes.
Severe thunderstorms.
Ice.
Winter freezes.
Extreme heat.
We've all seen situations where electricity is interrupted or the grid is under stress.
So if a very large new electricity user is coming into my area, I'd want to understand how the project is being incorporated into the electric system.
That doesn't mean I'm going to assume a data center will cause my neighborhood to lose power.
That's a conclusion we can't simply make.
But I do want to know:
How is the grid being prepared for the additional demand?
And:
What happens when the grid is under stress?
Those are now questions Texas regulators are actively examining.
What about water?
This is probably the question that has made me stop and think the most.
Because if you've lived in Texas for very long, you've experienced drought.
We've watched lawns turn brown.
We've watched lakes drop.
We've been told when we can and cannot water.
So naturally, when I hear that some data centers can use substantial amounts of water for cooling, my question is:
What happens during the next drought?
The answer is more complicated than I expected.
There isn't one statewide “data center drought rule.”
Texas water restrictions can depend on the source of the water and the local water provider or groundwater conservation district.
So a data center's situation depends on where it gets its water and what rules apply to that source.
Which leads me to a question I think every community considering a major water user should ask:
What does the actual water agreement say?
If the community enters a severe drought, what happens?
Does the facility have to reduce consumption?
By how much?
At what stage?
Can its cooling system operate differently?
Is there another water source?
What happens if water becomes seriously limited?
I don't think those are unreasonable questions.
And data centers don't all use the same amount of water.
This is another area where I think people can get into trouble by repeating one number.
Cooling technology matters.
Facility design matters.
Climate matters.
The computing equipment matters.
Some cooling approaches are designed to dramatically reduce water use.
So I don't think it's accurate to simply say:
“Data centers use X gallons of water.”
The better question is:
“How much water will THIS facility use, and where will that water come from?”
That is the number I want.
And water use is one of the issues being examined as part of the state's current review of data-center projects.
What about trees and green space?
This is another question I've been thinking about.
Large developments can mean large areas of land are cleared.
I've watched wooded land disappear as our area grows, and I admit it bothers me.
I like trees.
I like green space.
I like the shade they provide.
But there is a complication:
Trees need water, too.
So if we're building in a community where water is already a concern, the answer isn't necessarily to plant as many trees as possible without considering whether they can be sustained.
Maybe the better question is:
What landscaping makes sense for the climate and the available water?
Can existing mature trees be preserved where practical?
Can green space be incorporated into the development?
Can drought-tolerant landscaping provide shade without creating another major water demand?
Again, I'm not saying there is one perfect answer.
I'm saying we should ask.
And there are benefits, too.
It's important that we don't lose sight of that.
Data-center development can create construction jobs, specialized employment and economic activity.
Large projects can also involve significant investment in utilities and infrastructure.
Depending on the project and local agreements, they can contribute to the tax base as well.
So this isn't a simple story of “data centers are bad.”
There are potential benefits.
There are potential concerns.
And there are a lot of details between those two things.
If I were sitting at a community meeting about a proposed data center...
I'd want to hear answers to these questions:
Electricity
- How much power will it require?
- How will it connect to the grid?
- Are new substations or transmission lines needed?
- What happens during a grid emergency?
Water
- How much water will it actually consume?
- What cooling technology will be used?
- Where will the water come from?
- What happens during drought?
Land
- How much land will be cleared?
- What trees or natural areas will be affected?
- What supporting infrastructure is required?
Community
- How many construction jobs?
- How many permanent jobs?
- What economic benefits are expected?
- What are the long-term plans for the site?
Those seem like reasonable questions to me.
And Texas is asking many of these same questions right now.
That doesn't mean every question has an answer yet.
It means we're asking them.
And that brings us to the final question:
If I'm actually buying a home near one, what should I investigate?
That's Part 3.
Know what it is. Know what it means. Make an informed decision.
Jacque Swanner | INC Realty
For all your real estate needs, get Jacque!