Virginia to Require More Detailed Water Use Reporting for Data Centers Beginning in 2027

Virginia will soon begin collecting more detailed information on how much water is being used by data centers and other major customer categories under legislation approved by the General Assembly and signed into law this year.

House Bill 496, which takes effect Jan. 1, 2027, requires certain water suppliers that already report water withdrawal and usage information to the State Water Control Board to provide additional monthly breakdowns showing how water is distributed to major customer groups, including data centers.

Under the new law, utilities that provide water to customers offsite must separately report the total volume of potable water and reclaimed water delivered each month to:

• Data centers that hold an air permit issued by the Virginia Department of Environmental Quality.
• Domestic water users.
• Commercial and industrial users, reported separately or combined where available.
• Other uncategorized water uses.

The law does not require utilities to redesign their billing systems to collect new customer classifications. If certain categories are unavailable without modifying existing billing software, utilities may continue reporting under current capabilities. The legislation also defines reclaimed water for reporting purposes.

The measure, which is identical to Senate Bill 553, was enacted as a chapter of the 2026 Acts of Assembly and carries a delayed implementation date of Jan. 1, 2027.

Part of a Broader Debate Over Data Centers

While the legislation focuses on reporting rather than limiting water use, it comes as Virginia continues to grapple with rapid growth in the data center industry, particularly in rural communities.

Virginia is home to the world’s largest concentration of data centers, with most facilities clustered in Northern Virginia. As available land and electrical capacity become more constrained there, developers have increasingly looked to rural counties across the Commonwealth for new projects.

That expansion has prompted growing debate among local governments and residents over issues including:

• Water consumption and long-term water supply.
• Electrical demand and transmission infrastructure.
• Land use and zoning decisions.
• Noise from cooling equipment and backup generators.
• Tax revenue and economic development versus impacts on neighboring communities and agriculture.

Supporters argue that data centers generate significant local tax revenue with relatively few demands on schools and other public services, providing counties with new funding for infrastructure and public projects.

Critics counter that the facilities can place increasing demands on water supplies and electrical infrastructure while permanently altering rural landscapes. In many communities, residents have called for more transparency about how much water and energy the facilities consume before additional projects are approved.

Improving Transparency

HB 496 is widely viewed as a transparency measure rather than a regulatory one. By requiring standardized monthly reporting, state officials, local governments, researchers and the public will have better information about how much potable and reclaimed water is being supplied to data centers compared with other categories of users.

That information could play a larger role in future discussions about infrastructure planning, drought resilience and water resource management as Virginia continues to balance economic development with concerns over the long-term sustainability of its natural resources.

The new reporting requirements will apply beginning Jan. 1, 2027, with utilities incorporating the additional customer-category information into their regular reports submitted to the State Water Control Board.

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Wayne Creed

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