COMMITTEE AGENDA MEMORANDUM
Santa Clara Valley Water Commission
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: title
Receive and Discuss Information on Water Use at Data Centers and Opportunities for Collaboration.
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RECOMMENDATION: Recommendation
Receive and discuss information on water use at data centers and opportunities for collaboration.
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SUMMARY:
At their January 2026 meeting, the Water Commission requested information and discussion of water use at data centers in Santa Clara County. Data centers are facilities that house computer systems used to store and process data. These computer systems require cooling to operate safely and effectively. Santa Clara County hosts approximately 91 data centers, representing about one third of data centers in California. Data center water use varies depending on cooling technology and the scale of a facility. Many data centers in the county use recycled water or other water-efficient cooling systems.
As a water wholesaler and sustainable groundwater management agency, Valley Water does not have access to specific water use data for data centers in the County and instead relies on information from water retailers or from environmental review documents. Currently, data centers are not a separate billing class for Santa Clara County’s retailers and are part of the Commercial, Industrial, and Institutional (CII) sector, which accounts for approximately 26% of water use in the County. Water use in the CII sector has not increased in recent years. Valley Water tracks water use in the County to plan the need for investment in infrastructure to continue to serve safe, clean water to the community.
Valley Water does not have a role in approving or permitting data centers. Depending on available information, staff reviews environmental documents for proposed facilities, provides technical support for recycled water use, and collaborates with cities on their efforts related to data centers. Staff also track research and policy regarding data centers on a local, state, and federal scale. This includes taking positions on legislation pertaining to data centers, at the federal and state levels.
This memorandum summarizes Valley Water’s current understanding of water use at data centers in the County, and local and statewide efforts in addressing water use at data centers. Water Commission members represent all 15 cities in the county and
may discuss their city’s approach regarding data centers, as part of this item.
Data Centers in Santa Clara County
It is difficult to obtain an accurate count of data centers in the county due to co-location of data centers, meaning one site may show as multiple data centers. Valley Water worked with retailers to estimate that Santa Clara County has approximately 91 data centers:
Based on review of environmental and other documentation, 14 data centers are being planned (Next 10, Santa Clara University, 2026). Valley Water has information on expected water use for the following approved facilities from public environmental documents:
Data Center Water Use
Data centers use cooling systems to manage the heat created by their equipment. Depending on the system, cooling may use water through evaporative or liquid cooling methods. Data centers can also use recycled water or low/no-water use technologies such as air cooling, which does not require the use of water but uses more energy.
Data centers are a rapidly evolving industry and water use data is typically not available to Valley Water. This is because Valley Water’s water retailers do not currently track data center water use as a separate customer class. More information on anticipated and actual water use for data centers would allow better understanding of demands from this sector, which would help inform Valley Water’s demand forecasting to ensure long-term water supply reliability.
Demand Projections for Water Supply Planning
The Water Supply Master Plan (WSMP) is Valley Water’s guiding document for long-term water supply investments to ensure water supply reliability for Santa Clara County. The plan assesses future water supply outlook and demand projections and identifies strategies to meet the county’s current and future needs. The current master plan, WSMP 2050, was adopted by the Board in November 2025.
The WSMP 2050 developed two demand projections that include forecasted growth in the CII sector. These projections are used to develop probable future conditions that form the basis of Valley Water’s adaptive management approach for future water supply investment. This approach allows for flexibility in decision-making if conditions change. Overall, water use in the county has decreased despite an increase in population over past two decades, but extended droughts remain the biggest challenge. Valley Water needs to continue to make wise investments to ensure long-term water supply reliability in the County.
Local Efforts on Data Centers
Valley Water supports water conservation and recycled water for data centers and similar facilities. To help facilitate this, Valley Water offers the Water Efficient Technology (WET) Rebate, which provides rebates of up to $100,000 to existing commercial facilities that reduce water usage. For recycled water, Valley Water supports wastewater agencies in expanding non-potable recycled water use and is the wholesaler of recycled water in South Santa Clara County (South County). In South County, Valley Water is expanding infrastructure to improve system reliability. In addition, Valley Water operates the Silicon Valley Advanced Water Purification Center, which improves the quality of recycled water that is distributed by South Bay Water Recycling to customers in San Jose, Santa Clara and Milpitas. The Cities of Palo Alto and Mountain View are currently constructing a similar purification facility to improve non-potable recycled water, funding for which includes $16 million from Valley Water. Improved water quality expands the uses of recycled water, including for industrial cooling, such as for data centers. In addition, Valley Water has previously provided technical assistance to a data center planning to use recycled water.
The Model Water Efficiency New Development Ordinance (MWENDO) was developed in 2015 by the Santa Clara County Water Efficient New Development Task Force, composed of representatives from Valley Water, the County of Santa Clara, local cities, and community partners. MWENDO, included as Attachment 2, is intended to be adopted by jurisdictions in Santa Clara County to ensure water use efficiency in new development. The ordinance is customizable depending on cities’ needs and includes a variety of water efficiency measures for new developments, including commercial facilities. MWENDO has been updated multiple times to reflect the most up-to-date water efficiency standards. In 2024, Santa Clara became the first city to adopt MWENDO measures. MWENDO encourages efficient cooling and use of recycled water. Sections 5.305.1 and 5.305.2 of MWENDO relate to cooling towers and could apply to data centers using water for cooling if adopted.
In addition to the above efforts, Valley Water has worked with retailers to better understand water use of data centers in their service areas through retailer committees. Several of Valley Water’s retailers have made efforts to support efficient water use at data centers:
San Jose
Currently developing Data Centers and Large Energy Project Uniform Standards which will include standards for water usage and strategies to reduce reliance on potable water. This effort will include several community meetings and small group working sessions and result in a presentation of proposed standards to the City Council in December 2026. Valley Water will stay updated on this effort and coordinate with San Jose as requested.
Santa Clara
Requires data centers and similar industrial facilities to use recycled water if it is available as a part of their municipal code. 31 data centers in Santa Clara use recycled water for cooling (San Jose Spotlight, 2025).
Gilroy
Requiring Amazon to pay for necessary recycled water infrastructure upgrades to use recycled water for cooling at their data center. The infrastructure will include pipelines and a 3-million-gallon reservoir at the nearby South County Regional Wastewater Authority Treatment Plant, doubling the existing storage. In September, the city council approved a moratorium on the acceptance, processing, and approval of applications and entitlements for new data center facilities for a period not to exceed 45 days while the City develops unform standards and best practices for data centers.
Legislative Efforts
Valley Water tracks state and federal legislation related to water use of data centers. There are several bills that would require increased data transparency of water use for data centers, which would be beneficial for water demand forecasting. The Board of Directors voted to take a support position on the following bills:
State
AB 2469 (Papan) Data Centers: Water Use Disclosures
Prohibits a city and/or county from approving a permit or other entitlement that would result in the construction, or an expansion that increases the maximum peak water use, of a data center unless several conditions are satisfied, including providing a water supply assessment and projected water use and efficiency measures.
AB 2619 (Papan) Water Resources: Data Centers
Requires the owner or operator of a data center to submit expected water use, anticipated source of water, and the data center’s projected water use volume projected water use volume for the maximum day, maximum month, and average year to the water supplier and city or county when applying to a city for a license or permit. This bill also requires urban water suppliers to consider data center demand in water shortage planning.
AB 2469 and 2619 were signed by Governor Newsom in September 2026.
Federal
S. 4213 (Durbin) - Data Center Water and Energy Transparency Act of 2026
Requires data center operators (of a certain size) to submit annually to each state in which they operate a report that describes monthly energy and water usage, monthly water source, and projected energy and water use for the following 5 years with proposals for reducing that usage. A state may also assess fees on data center operators for the purposes of carrying out this act. This data would be made available to local government entities upon request.
Resources and Studies
Valley Water has supported two academic institutions in studying data centers:
The Intersection of Data Center Development, Water Availability, and Environmental Justice in California (2026)
Santa Clara University co-authored a report with nonprofit Next 10 to assess potential impacts of large-scale data centers to local water resources. The report examines the intersection of data center water use with water availability and distribution in California while highlighting potential water access disparities for vulnerable communities. The authors selected 4 case studies, two of which are located in Santa Clara County (Santa Clara and Gilroy) to examine these issues more closely.
Regulating Data Center Water Use in California (2026)
UC Berkeley’s report examines current knowledge and policy about data center water use and synthesizes gaps and recommendations. The report highlights the current lack of transparency and policy oversight and recommends actions for state and local governments and the data center industry. The authors also examine methods to reduce water impacts including in the siting and design processes.
The California Water Efficiency Partnership (CalWEP) is currently conducting a data center study. In addition, the Alliance for Water Efficiency (AWE) recently developed the Data Center Primer for Water Service Providers (2026) which aims to help water practitioners engage in the planning and design processes for data centers in their communities. The primer provides an overview of how data centers use water, water use benchmarks, and considerations for siting and reviewing data center water requests. Valley Water will use the primer and other existing and future resources to further understand potential data center water impacts.
Next Steps
Continue to work with retailers, municipalities, and academics on this topic and support water conservation and recycled water use where possible. Valley Water will also continue to advocate for data transparency and standardized water efficiency metrics.
References
Next 10, Santa Clara University, 2026. The Intersection of Data Center Development, Water Availability.
San Jose Spotlight, 2025. Santa Clara data centers hit max energy capacity.
ENVIRONMENTAL JUSTICE IMPACT:
This update does not have an environmental justice impact, however, data center siting and water needs may impact communities depending on local conditions.
ATTACHMENTS:
Attachment 1: PowerPoint
Attachment 2: MWENDO
UNCLASSIFIED MANAGER:
Manager
Kirsten Struve, 408-630-3138