Data centers must now disclose water and energy use—but states can charge unlimited fees
S. 4213 — Data Center Water and Energy Transparency Act of 2026 · Filed by Richard Durbin (D-IL) · Introduced Mar 25, 2026 · Referred to committee
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What it does
This bill requires data center operators running facilities with at least 25 megawatts of peak demand to annually report their energy and water consumption to their state or, if the state lacks a collection program, to the EPA and USDA. Operators must also disclose projected energy and water use for new or expanded facilities and propose efficiency improvements. States may charge fees to support data collection, and the EPA/USDA will publish annual aggregated reports on national data center impacts. Operators who negligently violate reporting requirements face $20,000-per-day federal fines, adjusted for inflation every three years.
Why we flagged it
The bill establishes mandatory federal and state reporting requirements for data center operators regarding energy and water consumption, with EPA and USDA oversight. It is fundamentally a transparency and data-collection mechanism with environmental monitoring intent, not a subsidy, tax provision, or commemorative measure.
What the text implies
- Reporting requirements may create competitive disadvantage for smaller data center operators lacking compliance infrastructure, potentially consolidating the market toward larger players with dedicated regulatory affairs teams.
- State-level fee authority (Section 3) allows states to assess unlimited fees on data center operators for data collection, creating potential for revenue-raising disguised as environmental oversight and variable compliance costs across jurisdictions.
The full analysis lists 5 implications of this text.
Who stands to gain
Environmental consulting firms (compliance support); Data analytics and reporting software vendors; Large data center operators (competitive advantage via scale)