Three Developers Set the Water Baseline on April 9. Here's the 2027 Playbook.

The Texas House Committee on State Affairs ran its first hearing under Speaker Dustin Burrows's data center interim charge on Thursday, April 9. The agenda covered SB 6 implementation, economic impact, and grid resilience. Water was not on the published agenda. Water dominated nearly five hours of testimony anyway.

That gap between agenda and floor matters. Water regulation for data centers does not flow through SB 6. It will flow through four separate interim committee charges, with hearings building the record for 2027 legislation. The April 9 hearing set the pro-development baseline those committees will work from.

Water Measurement Moved to the Center of the Debate

Haynes Strader, Skybox Datacenters' chief development officer, told the committee the average Skybox facility uses less water than five Texas households. A building charges its closed-loop cooling system with a one-time 30,000-gallon fill. Strader said his own backyard pool in Dallas uses more.

Of the 800 MW of large data centers operating in Texas today, Strader testified that roughly 80% do not use evaporative cooling at all. Skybox has not used evaporative cooling since 2016.

Michael McNamara, CEO of Lancium, reported that three of eight buildings at the company's Abilene Stargate campus are operational and consuming 20 gallons per minute, less than 5% of the 500 gallons per minute the city allocated. At Lancium's Childress facility, McNamara testified the company plans to return 1 million gallons per day to the Red River against an 11,000-gallon daily draw.

McNamara framed the issue directly: "We have a water shortage, but it's a water shortage driven by shortages of engineering and money. We can fix all of those."

PUC Chairman Thomas Gleeson responded with the move that shapes the next twelve months. Gleeson told the committee it is critical to have a clear picture of data center water consumption and pushed back on self-reported figures. The path to an auditable water standard runs through interim committee work and the 2027 session, not SB 6 rulemaking.

What to do: If your facility uses water, commission third-party site-level auditing now. The witnesses who bring audited figures to the water committee hearings this interim set the benchmark 2027 legislation measures against. The window is the interim calendar, not the SB 6 comment period.

SB 6 Is Running on Its Own Track

Pablo Vegas, ERCOT's CEO, used the April 9 record to confirm the SB 6 implementation timeline. ERCOT received 225 new interconnection requests last year against a system built for 40 to 50 projects annually. In the six weeks preceding the hearing, queue requests grew by over 130,000 MW. Approximately 87% of that volume came from data centers. The total interconnection waitlist now stands at 410,000 MW.

ERCOT staff will announce admission criteria for the first large-load batch by June. PUC consideration follows as early as July. After that, batch studies run annually.

McNamara flagged a developer concern on the record: selection for the first batch could exclude projects with significant demonstrated financial commitments. That tension will shape the admission criteria PUC considers.

What to do: Two SB 6 deadlines matter in the next 90 days. Written comments on PUCT Project 58481 (16 TAC 25.194, the implementing rule) remain open, with a public hearing request deadline of April 17. First-batch admission criteria land by June. Firms engaging past June engage on the rules, not on the criteria that define the rules.

Project Caprock Sets the Pro-Development Baseline

The same day the hearing opened, Aligned Data Centers announced ground-breaking on Project Caprock: a 540 MW, 313-acre, $5 billion campus in Hale County outside Abernathy. Six buildings. 1.65 million square feet at full build-out. First facility (LBB-01) enters service Q1 2027. Liquid cooling rather than evaporative systems.

Hale County is among the state's most water-constrained counties under the Texas Water Development Board's State Water Plan, projected to lose two-thirds of its groundwater by 2040.

Andrew Schaap, Aligned's CEO, announced the campus the morning of the hearing. The timing matters. Developers testifying on water transparency simultaneously demonstrated what a 2027-compliant project design looks like in one of Texas's driest regions.

What to do: Committee members now have a live benchmark for pro-development water design in constrained basins. Projects in the Panhandle, Permian, and Hill Country relying on evaporative cooling or undisclosed water sources should reassess design and messaging before the water committees open their hearings. Caprock will be the reference point in future testimony on both water and data center interim charges.

The 2027 Calendar Has Four Vectors

Water regulation for data centers has no single rulemaking track. Four interim committee charges now build the 2027 record:

• House State Affairs. Data center growth, SB 6 implementation, grid resilience, economic impact. April 9 was the opening hearing. More expected through 2026.

• House Natural Resources. Data center water use. Hearings to be scheduled.

• Senate Business and Commerce. Parallel data center and grid charges, including balancing growth against landowner rights and water infrastructure. Hearings to be scheduled.

• Senate Water, Agriculture, and Rural Affairs. Water demands of energy-intensive technologies, including data centers. Hearings to be scheduled.

Four vectors. Two chambers. One legislative session nine months out. The committees will measure every proposed bill against the testimony now being built on the record.

What to do: File comments on PUCT Project 58481 before April 17. Identify which of the four committees covers your risk profile and engage staff before the next hearing round. The rules are being drafted in public by the people who show up.

Bottom Line

The April 9 hearing clarified what is on which track. SB 6 handles interconnection: June criteria, July PUC consideration, April 17 comment deadline. Water regulation lives in a separate set of committee charges with no fixed hearing dates yet, and its 2027 legislation will be written against whichever developers produce audited numbers in the meantime.

The 2027 session is nine months away. The committee record is already forming. Developers who engage now draft the framework. Those who wait inherit it.