Austin Asks for Feedback as It Considers Rules for Large Water Users

Dozens of residents walked between displays about water conservation, reuse, and consumption Monday, Oct. 5, at the city of Austin Permitting and Development Center, as Austin Water officials asked them to consider one question: How should the city manage its largest water users?

The city’s water wonks presented some possible answers.

“Tonight, we’re having an open house where we’re really seeking our community input and feedback on some new policies and procedures that we’re considering for high-impact water users,” said Shay Ralls Roalson, director at Austin Water.

The discussion comes after City Council passed a resolution in July, aimed at addressing the impacts large water users have on the city’s utility. City Manager T.C. Broadnax must present recommendations to the Climate, Water, Environment, and Parks Committee by Dec. 9. The first report on large users’ water consumption is due by May 2027.

At the open house, Austin Water proposed implementing new requirements for developments that use or are projected to use more than 85 million gallons of water a year. They also suggested that large water users produce detailed conservation plans, annual reports, and water budgets, which would limit the amount of water a customer could use. Under the proposal, if customers were to exceed those budgets, they would face higher rates. The utility is also considering requiring large users to update their conservation plans every five years and set five- and 10-year goals.

As Austin prepares for growth and drought and data centers continue to be constructed throughout the state, the Oct. 5 discussion is part of the early steps the city is taking to regulate developments within city limits. 

Austin Water’s draft defines a “high-impact water user” as one or more commercial buildings, including industrial and manufacturing facilities, that uses or is projected to use more than 85 million gallons of water a year. The calculation would include both drinking and non-drinking water.

Some requirements for these customers already exist. New commercial and multifamily projects must report how they plan to use water, while developments of 250,000 square feet or more face additional water reuse requirements, according to Austin Water.

Along with those guidelines, City Council passed an ordinance in 2023 that requires developers to pay for utility infrastructure costs, which prevents utility rates from surging for residential customers.

“We already have really strong financial practices that are industry leading to make sure that the costs of delivering high-quality water and wastewater and reclaimed water services to all of our customers are borne equitably by each customer class,” Roalson said.

One way large water users can reduce their reliance on the city’s drinking water supply is to connect to Austin’s reclaimed water system. Reclaimed water is treated wastewater that can be reused for purposes that do not require drinking water, such as irrigation, toilet flushing, and cooling systems.

Austin Water also uses a Water Benchmarking Application to understand how a project plans to use water and help customers identify conservation opportunities before construction is underway.

“That provides us with information about how they will be using water on their site and what their opportunities are for water conservation, for reclaimed water use, for on-site water reuse,” Roalson said.

Although data centers were a focus of some residents’ concerns, Roalson said the proposals are not aimed only at the industry.

“Tonight’s discussion is really about high-impact water users, regardless of what kind of development it is,” Roalson said.

In 2025, high-impact commercial customers accounted for 10.2% of Austin’s total water use, according to Austin Water data presented at the open house. Residential customers accounted for 60.1%.

Carol Phillips, who lives in Northwest Austin, said she is concerned not only about the water data centers directly consume, but the indirect water used to generate the electricity that powers them. That indirect water use occurs at power generation facilities rather than at the data center itself and is not reflected in the facility’s direct water consumption.

“How can you even plan this critical infrastructure without knowing every drop you’re using?” Phillips said. “This is scary.”

Brad Knowles echoed Phillips’ remarks, stating that the city should consider a data center’s broader water footprint, rather than only the water used directly at the facility.

“We can’t just look at what that one data center itself is requiring,” Knowles said. “We have to look at the total cost of ownership.” Or, as he put it: “We have to look at the whole enchilada.”

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