AWWA Outlines Water Impact Review for Data Centers

A new report from the American Water Works Association guides utilities in weighing the water impacts of data center development.

Updated on Nov. 2, 2026 in Data Centers

Isometric editorial illustration of a plain water storage tank and pipeline feeding rectilinear cooling blocks across an open flat ground, in muted oxblood, teal, and mustard. — The American Water Works Association released a report with Carollo Engineers urging utilities to evaluate data center water demands project by project to protect existing customers from added costs. AI Illustration. Upload story photo >

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Should your community approve new data centers despite their water demands?

The American Water Works Association released Cooling the Cloud: Considerations for Water Utilities Evaluating Data Center Development, developed with Carollo Engineers. The report outlines how utilities can assess water supply reliability, infrastructure capacity, wastewater impacts, environmental considerations, and cost recovery.

Why it matters

As data centers seek large amounts of water for cooling, utilities must weigh those needs against existing supplies and customers. The report aims to keep existing customers from bearing added financial burdens tied to new development.

The report urges utilities to assess cooling technologies, average and peak water consumption, wastewater needs, and potential expansion before approving projects. It does not quantify specific water volumes or rate impacts.

The players

American Water Works Association (AWWA)

AWWA is a long-established nonprofit professional and educational association focused on drinking water supply, treatment, and distribution across the United States.

Carollo Engineers

Carollo Engineers is a U.S. engineering firm that specializes in water and wastewater infrastructure planning and design.

The details

The report recommends a project-by-project evaluation of data center proposals and calls for clear agreements with developers covering infrastructure investments and project costs. It also encourages utilities to disclose projected water demand, system capacity, potential rate impacts, and unresolved concerns, and suggests community benefit agreements to improve transparency.

2025: AWWA published Cooling the Cloud: Water Utilities in a Data-Driven World.
November 2, 2026: AWWA released the Cooling the Cloud considerations report.

Roadmap

This report extends AWWA's 2025 Cooling the Cloud publication from broad awareness of data-driven water demand to a practical framework utilities can apply project by project. It positions water utilities as gatekeepers in the national expansion of data center infrastructure.

Households and businesses served by a local utility could see effects on water rates or system capacity if data center projects are approved without clear cost agreements. The report's emphasis on disclosure gives customers a basis to ask how projected demand may affect their bills.

The takeaway

Residents can ask their local water utility whether it has disclosed projected data center water demand, system capacity limits, and potential rate impacts. Transparency on these points is the report's central recommendation.