In the Dark by Design: Texas Can't Manage What AI Data Centers Won't Disclose

📘 Introduction

You cannot manage what companies do not disclose. It's a simple governance truth, but nowhere in Texas is it being tested as bluntly as in the state's AI data center boom.

The numbers alone should have triggered oversight years ago. Texas now hosts 341 data centers, up from just 22 surveyed by the Texas Water Development Board in 2023. ERCOT is currently sitting on 474 gigawatts of grid connection requests — more than five times the state's current peak demand — and data centers make up 90 percent of that queue. This is not incremental growth. It is a restructuring of the state's water and power systems, happening largely off the public's radar.

📊 A Boom Outpacing Its Own Paperwork

The disclosure gap is the story. When the Texas Water Development Board ran its legally mandated water-use survey in 2025 — one that carries a Class C misdemeanor penalty for non-compliance — only 17 percent of the state's data centers responded. A separate Public Utility Commission survey this year fared only slightly better, pulling responses from 28 companies covering 92 of the 341 facilities statewide. Two operators, Diode Ventures and Calypso, simply declined invitations to testify before the Texas House Committee on Natural Resources. State Representative Brad Buckley called the resulting picture "woefully lacking." He was being generous.

🔒 A Payday-Lending Law, Repurposed to Hide Water Data

It gets worse at the local level. In Bexar County, a six-year-old statute — Government Code Section 552.1331 — originally written to shield individual households from payday lenders is now being used by utilities to withhold commercial water-use data from smart meters installed at data centers, including a proposed 243,000-square-foot facility in Cibolo. The law's own author, State Representative Diego Bernal, says this isn't how it was meant to work: "This is not an unfixable problem." That it persists anyway shows how easily a narrow exemption can be stretched to cover exactly the kind of institutional water use the public most needs to see, especially in a region where aquifer strain is not hypothetical.

⏸️ A Pause Is Not a Policy

To its credit, the state has started to notice. Governor Abbott's early-August order pausing new grid-connection approvals until ERCOT and the PUCT complete an audit — one that is supposed to require projects to disclose electricity projections, water and cooling plans, tax incentives, and ownership structure before they can proceed — is a real acknowledgment that Texas has been approving infrastructure it doesn't understand. But a pause is not a policy. It buys time; it doesn't fix the incentive structure that produced 83 percent non-response rates on legally required surveys in the first place.

That incentive structure is worth naming plainly. Data centers get tax abatements, expedited permitting, and grid priority by promising economic development. Communities get the water bills, the electricity price pressure, and the noise — and increasingly, they get none of the information needed to weigh whether the trade was worth it. Resident Davin Hicks, watching a facility rise near San Antonio's water supply, put it as well as anyone: "Transparency on water usage, on electrical usage, on even plans to build" should not be optional. Representative Cody Harris, from the other end of the political spectrum, said almost the identical thing on the record. When conservationists and Republican legislators converge on the same complaint, it's not a partisan grievance. It's a description of a real gap.

🧭 What Real Accountability Would Require

Texas doesn't need to slow down the AI economy to fix this. It needs to close the loophole that lets a payday-lending statute double as an industrial secrecy shield, put real enforcement behind the water-survey penalties already on the books, and make ERCOT's forthcoming disclosure requirements permanent rather than a one-time condition of Abbott's pause. Regulators cannot size the grid, protect the aquifers, or judge whether a tax break paid for itself if the companies receiving the benefits get to decide what the public is allowed to know.

🧾 Conclusion

Disclosure isn't a courtesy to residents. It's the precondition for governing at all.

For more analysis on Texas energy and AI, visit PowerGrabTX.com.