AI Data Centers: Water, Power & Community Costs

U.S. data centers could consume up to 110 billion gallons of water a year by 2030, equal to 7% of total annual consumptive use in U.S. public water systems. Scientists at the University of California, Riverside and other institutions made that projection in a March analysis. It lands on communities that didn't ask for the trade. People living near these facilities will absorb the strain.

The burden isn't abstract. A separate report by nonprofit advocacy organization Ceres found data centers across seven states used around 3.4 trillion gallons of freshwater a year for electricity generation. That’s roughly 12 times the combined annual water use of Los Angeles, Phoenix and Washington, D.C. Public water systems serve families, farms and fire departments. When one industry draws that kind of volume, who gets priority should be a matter for democratic decision, not a quiet corporate arrangement.

Who Is Affected

Public concern is already running high. A CNN poll conducted by SSRS in September found nearly 90% of Americans were more concerned than excited about the rise of AI data centers. Their environmental effects depend on location, electricity sources and technology. The same facility can be benign in one county and damaging in another. AI providers don't share much about their operations, so precise estimates remain hard to pin down. Residents are being asked to accept risks they can't fully measure.

For some, the noise is already a daily fact. Data centers produce sound from cooling systems, gas turbines, diesel generators and other equipment. Residents near a large data center in Vineland, New Jersey, have filed noise-pollution lawsuits. Soundproofing can help; some experts have urged state and local governments to strengthen noise regulations. Heat is a concern too. An Arizona State University study found data-center heat pollution warmed downwind Phoenix neighborhoods by as much as 4 degrees Fahrenheit. Lead author David Sailor, director of ASU's School of Geographical Sciences and Urban Planning, said, "Even if these data centers only contribute to an additional heat island magnitude of 1 degree or 2 degrees, that can still have a very significant impact on our lives." More research is needed. Some experts say data centers aren't substantially different from other industrial facilities in their heat effects.

The Energy Gap

AI data centers used around 0.5% of global electricity in 2025, according to Our World in Data, which projected the share could reach 1.5% by 2030. Nearly half of global data-center electricity consumption takes place in the United States. Lawrence Berkeley National Laboratory estimates data centers could account for up to 12% of U.S. electricity consumption by 2028. The International Energy Agency found AI data-center electricity consumption surged 50% last year.

The power mix is troubling. Globally, coal powers data centers most often, at 30%, followed by renewables at 27% and natural gas at 26%. In the United States, more than a third of natural-gas-fired power capacity in development is intended to power AI, according to a January report from Global Energy Monitor. Data centers are also building their own energy infrastructure, including gas turbines, to avoid straining local grids and raising bills. CNN reported these turbines are less efficient than large power plants. They can also add climate and health effects through nitrogen oxides and fine particulate matter. One recent study estimated the public-health burden of U.S. data centers could reach $20 billion by 2028.

Water use varies with cooling technology, power sources and local conditions. Around two-thirds of U.S. data centers built or under construction since 2022 are in water-stressed areas, according to a 2025 Bloomberg analysis. Technology companies say they're developing cooling systems to reduce water use. Some analysts argue water concerns have been overestimated, comparing data-center demand with the water used to produce a burger or cotton shirt. That comparison may help, but it doesn't answer whether a drought-stressed town can spare the water.

Who Pays and Who Decides

Kaveh Madani, director of the United Nations University Institute for Water, Environment and Health, said officials should make clear "who benefits from it" before building a new data center. That means asking whether it creates jobs or improves the local economy, and whether it takes water from users who need it more, such as farmers. "There are trade-offs like any other technology," Madani said. "It has downsides that need to be regulated, monitored, and mitigated."

The government is also moving to expand supply. The Department of Energy is lending as much as $4.4 billion to restart three shuttered nuclear plants: the Palisades Power Plant in Michigan, the Crane Clean Energy Center at Pennsylvania's Three Mile Island and the Duane Arnold Energy Center in Iowa. Together they would restore 2.25 gigawatts, enough to power roughly 2 million homes and businesses. Two plants have contracts with technology companies willing to pay a premium for carbon-free electricity. Nuclear engineering expert Todd Allen, associate dean for research at the University of Michigan's College of Engineering, said restarting a reactor is a relatively quick way to generate substantial electricity.

Edwin Lyman, director of nuclear power safety at the Union of Concerned Scientists, put the public's stake plainly. Most U.S. plants were built between 1970 and 1990 and designed for the natural disasters of that era, he said, while climate change is making extreme weather more frequent and severe. "It's possible, if they set the right level of safety and spend the necessary funds to meet that, they could restore these plants to operable condition," Lyman said. "That's not happening at this point."

The Duane Arnold case shows how officials frame these deals. The plant began operating in 1975 and was scheduled to close permanently in October 2020. Replacing it with cheaper sources, including wind, was projected to save Iowa customers $300 million in energy costs. A powerful storm known as a derecho damaged it, and it shut down early in August 2020. NextEra Energy owns the plant. CEO John Ketchum said, "This is a perfect example of data centers paying their own way," adding that a long-term contract with a hyperscaler means none of the project's costs are being paid by residential customers in Iowa. Public officials should verify that claim, not just accept it.

Palisades tells a similar story. The plant operated from 1971 until 2022, when owner Entergy left the nuclear power business. Holtec International bought it and began dismantling it. Michigan officials encouraged the company to pursue reopening and provided state funding. The Biden administration approved a $1.5 billion loan in 2024, which the Trump administration continued paying out. Holtec began loading nuclear fuel in August but paused after a fuel assembly tilted from its upright position. Power purchase agreements require Palisades to be operating by March 2027. Three Mile Island, site of the nation's worst commercial nuclear power accident in 1979, is set for a restart under a 20-year agreement with Microsoft. Constellation hopes to bring it online in 2027 after a $1 billion Energy Department loan.

Jack Spencer, director of the Heritage Foundation's Center for Energy, Climate and Environment, said he couldn't think of a worse use of taxpayer money than restarting reactors, arguing the projects are low-risk and energy demand is high. Jennifer Gordon, director of the Atlantic Council's Nuclear Energy Policy Initiative, called federal financing a "terrific way" to provide needed electricity. The World Nuclear Association said reactor restarts should be celebrated, but preventing premature closures would be better.

The broader clean-energy picture is mixed. BloombergNEF forecast record U.S. clean-energy buildouts in 2026 and 2027 as developers race to claim expiring federal tax credits. The same data-center boom is also driving a major expansion of natural gas, which Bloomberg said undercuts the climate benefits of renewable construction.

Why This Matters:

People living closest to data centers are being asked to carry costs that remain poorly measured: water drawn from stressed systems, noise residents have taken to court, and heat scientists say can warm entire neighborhoods. The energy decisions tied to this boom, from gas turbines to taxpayer-backed nuclear restarts, will shape household bills and public health for decades. Whether communities share those costs fairly depends on transparency from the companies involved and on state and local governments setting enforceable limits before the next facility breaks ground. Safety standards, water rules and noise regulations are public tools. They only work when public institutions use them. The question for communities isn't whether AI will grow, but who will be accountable when it does.