Bill proposes more scrutiny for water usage at large data centers

In the Land of 10,000 Lakes, could water ever truly become scarce?

Yes, says Rep. Peter Fischer (DFL-Maplewood), especially when considering the tremendous water resources that are consumed by large data centers already operating in the state and by the so-called “hyperscale” data centers that may arrive soon.

He sponsors HF3007, which would allow the DNR to impose extra scrutiny and a pre-application process for proposed data centers anticipated to consume more than 100 million gallons of water per year or 250,000 gallons per day.

Data centers use immense amounts of water for both electricity production and for cooling the information technology hardware that performs data storage and supports internet operations.

The proposed legislation comes as some of the largest technology companies — such as Amazon, Meta and Microsoft — are exploring building new data centers in Minnesota that require considerably more acreage, electricity and water than the ones currently operating here.

“We are seeing more and more situations where we’re having businesses coming into the state, or within the state, wanting to appropriate large uses of water,” Fischer said.

These large data centers may limit the water supply for future residents or businesses and therefore potentially need more regulations to ensure water equity, he said.

After hearing public testimony, the House Environment and Natural Resources Finance and Policy Committee laid the bill over, as amended, for possible consideration in a committee bill.

Fischer has concerns that aquifers, municipal water systems and surface water supplies could be stressed unless the state and local governments understand more about the negative ramifications of data centers so appropriate regulations can be developed if needed.

Those concerns were echoed by several testifiers, including Sarah Mooradian, government relations policy director of CURE.

“Minnesota finds itself facing sudden and intense interest from companies seeking to build hyperscale data centers throughout the state. But our understanding of the cumulative and long-term impacts of the development of this industry on our water, land, energy systems and communities lags far behind.”

The bill states the DNR “may request preapplication information that is helpful to assess the factors affecting the ability of a water source to meet a project’s water use needs at potential locations.”

Mooradian said that’s too lenient and that the DNR should be required to implement a pre-application procedure.

Several opponents also testified, including two from the Minnesota Chamber of Commerce who stated that tougher scrutiny and potentially more regulations would inhibit economic growth in regions of the state needing the jobs that would come with data centers.

“Data centers will contribute to our tax base and our economic growth,” said Michelle Benson, energy policy director for the chamber. “We believe that the provisions in HF3007 will give data center investors a reason to look elsewhere.”

The bill would appropriate $300,000 in fiscal year 2026 to the DNR to work with the Minnesota Geospatial Information Office to develop a water availability atlas that uses existing data sets to quantify the availability of water across the state.

The money could also be used to develop a methodology that could be used by state agencies, local governments, and other economic development authorities to determine appropriate siting for large water uses and businesses.