Data Center Water and Energy Transparency Act of 2026
- Sponsor
- Rep. Underwood, Lauren [D-IL-14]
- Committees
- Energy and Commerce Committee (primary)
- Last action
- Jul 22, 2026
Bottom line
The bill establishes a comprehensive federal and state reporting framework for large data centers' energy and water consumption to increase transparency and inform policy on environmental impacts.
What it actually does
This bill mandates annual reporting on energy and water usage for existing and planned data centers with a peak demand of 25 megawatts or more. Operators must submit reports to their respective States, or to the Environmental Protection Agency (EPA) and the Secretaries of Energy and Agriculture if the State lacks a reporting program. The collected data will be aggregated and publicly reported by federal agencies, excluding proprietary information, to inform on regional impacts and best practices.
Proponents argue
Supporters argue this bill is crucial for understanding and mitigating the significant environmental footprint of rapidly expanding data centers. By requiring transparency on energy and water use, it will enable States, local governments, and federal agencies to make informed decisions, encourage efficiency, and develop best practices to address impacts on local resources and utility rates.
Opponents contend
Critics might contend that this bill imposes an unnecessary regulatory burden on data center operators, potentially stifling innovation and economic growth in a critical technology sector. They may argue that existing industry initiatives or voluntary reporting are sufficient, and that mandatory reporting, especially with potential federal fines, could lead to competitive disadvantages or discourage investment in certain regions.
The bill is concise and clearly written, making it accessible for a quick but thorough review by an informed reader.
Section 3(a)
Annual Energy and Water Use Reporting for Existing Data Centers
Data center operators with facilities using 25 megawatts or more must annually report their energy and water consumption to the State where the data center is located. This includes monthly usage, power generation methods, water sources, and annual average Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE) metrics. They must also project their energy and water use for the next five years and propose efficiency improvements.
Supporters argue
Supporters argue this provision provides essential data for understanding the environmental footprint of existing data centers, enabling better resource management and promoting accountability for large energy and water consumers.
Critics contend
Opponents may argue that this creates an onerous reporting requirement, particularly for multi-state operators, and that the data could be sensitive or proprietary, potentially harming competitiveness.
Tradeoffs
Balances the public interest in environmental transparency and resource management against the administrative burden and potential proprietary concerns of private industry.
Section 3(b)
Pre-Construction and Expansion Reporting
Individuals or companies planning to construct a new data center, or expand an existing one, with a projected energy use of 25 megawatts or more, must submit a report to the relevant State. This report details projected energy and water use for the first five years of operation or after expansion, along with proposals for reducing consumption and anticipated efficiency gains.
Section 3(c)
Federal Aggregation and Public Reporting
States that collect data will submit anonymized and aggregated reports to the EPA and the Secretaries of Energy and Agriculture. These federal agencies will then jointly publish an annual public report detailing the aggregated energy and water use of data centers across the U.S. by region, their impacts on utility rates and communities, environmental consequences, and recommendations for best practices. This public report will exclude proprietary information.
Sections 3(e) and 4
Enforcement Mechanisms and Funding through Fees
States that establish their own reporting programs can enforce compliance through fines and other activities. If a data center reports directly to federal agencies (because the State lacks a program), the EPA and Secretaries can jointly fine negligent violators $20,000 per day, with inflation adjustments. The federal agencies are authorized to assess fees on these federal reporters to cover the costs of implementing the Act.
The bill defines "power usage effectiveness" (PUE) and "water usage effectiveness" (WUE) by directly referencing specific International Organization for Standardization (ISO/IEC) standards (30134-2:2026 and 30134-9:2022, respectively, or successor standards).
Section 2(4) and 2(8)
Why it matters:This is standard legislative practice to ensure precise, internationally recognized, and evolving technical definitions without cluttering the bill text with complex technical specifications. It delegates the technical details to expert bodies.
Case for: Supporters would argue that referencing established international standards ensures consistency, accuracy, and comparability of reported data across the industry, leveraging existing expertise and avoiding the need for the U.S. government to develop its own potentially less robust metrics.
Case against: Critics might contend that relying on external, potentially evolving, and highly technical standards makes the bill less accessible to non-experts and could lead to compliance challenges if operators are not familiar with these specific ISO/IEC documents or if the standards change significantly.
Estimated impact: Ensures that data reported on energy and water efficiency is standardized and comparable, influencing how data centers measure and report their environmental performance globally.