Chip Roy Advances Legislation To Monitor Data Center Resource Usage
May 25, 2026 – WASHINGTON, D.C. — A Texas congressman is pushing for new federal oversight of the rapidly expanding data center industry, introducing legislation aimed at tracking the massive water and energy demands of large-scale facilities.
Chip Roy, a Republican representing Central Texas, filed the bill Friday, calling for the U.S. Department of Energy to monitor and publicly report resource usage by data centers that receive federal support or benefit from expedited permitting under a recent executive order.
The proposal comes as Texas experiences a surge in data center development, driven by growing demand for cloud computing, artificial intelligence infrastructure, and digital storage. While the projects promise economic growth and job creation, they have also raised concerns about strain on local water supplies and power grids.
Under the legislation, the Department of Energy would be required to collect detailed data on how much water and electricity these facilities consume. The bill also draws a key distinction between two types of cooling systems commonly used in data centers.
Facilities using closed-loop systems, which recycle water, would be tracked separately from those using open-loop systems that continuously pull fresh water from municipal sources. Critics of open-loop systems argue they can place significant pressure on local water infrastructure, particularly in drought-prone regions of Texas.
On the energy side, the legislation would require disclosure of the costs associated with connecting data centers to the power grid. Reports would identify whether those costs are paid by the companies themselves, passed on to ratepayers, or subsidized by federal funds—an issue that has drawn increasing scrutiny as large-scale projects seek public incentives.
Notably, the reporting requirements would not apply to data centers owned or operated by federal agencies.
Background: Rapid Growth, Rising Concerns
Texas has become a national hotspot for data center construction in recent years, thanks to its relatively low energy costs, abundant land, and business-friendly regulatory environment. However, the scale of these facilities—some consuming as much power as small cities—has prompted debate among lawmakers, utility providers, and residents.
In some communities, concerns have emerged over increased electricity demand, potential rate hikes, and water usage during periods of drought. Supporters of increased transparency argue that better data is essential for long-term planning and responsible growth.
Roy’s legislation reflects a broader push among policymakers to balance economic development with infrastructure sustainability, particularly as the digital economy continues to expand at a rapid pace.
