- Artificial intelligence is driving a surge in energy-hungry data centers across the Interior West.
- These data centers could consume enough water to supply up to 200,000 people by 2035.
- Western Resource Advocates urges state leaders to adopt safeguards to prevent overuse and unfair costs.
- New policies could turn this challenge into an opportunity for clean energy investment.
Wednesday, July 30, 2025 — Artificial intelligence is reshaping daily life—and the infrastructure needed to support it is reshaping the West. A July 2025 report by Western Resource Advocates
(WRA) warns that data centers, which power AI, cloud computing, and high-speed internet, are creating a rapid and massive demand for electricity and water across Arizona, Colorado, Nevada, New Mexico, and Utah.
This rising demand stems from AI’s intensive computing requirements, which are housed in sprawling data center campuses. Unlike traditional commercial developments, these facilities run 24 hours a day and must remain cool to prevent overheating. That cooling—especially if water-based—could lead to water use totaling over 21,000 acre-feet annually by 2035, according to WRA. That is enough to meet the annual needs of nearly 200,000 people.
At the same time, electric utilities across the region are forecasting a 50% or greater jump in power demand within the next decade, driven largely by new and proposed data center construction. The growth is occurring so quickly that it risks overwhelming efforts to reduce carbon emissions, threatening states’ clean energy transition goals.
WRA’s Suggested Safeguards.
The report, titled Data Center Impacts in the West: Policy Solutions for Water and Energy Use, outlines a series of recommendations for public utility commissions, lawmakers, and local governments. These include:
1. Encouraging Clean Energy Investments.
WRA recommends “clean transition tariffs” that allow utilities to develop new renewable energy projects specifically for data centers, with the centers covering any additional cost. This approach could accelerate innovation in solar, wind, geothermal, and long-duration energy storage.
2. Regulating Load and Infrastructure.
With electricity use projected to spike sharply, WRA calls for more accurate forecasting, improved resource planning, and protections to ensure utilities do not overbuild infrastructure that existing customers will be forced to subsidize. Contracts with data centers should include minimum usage periods, exit penalties, and financial safeguards.
3. Protecting Scarce Water Resources.
Given the trade-offs between energy and water efficiency, WRA urges states to require annual public reporting of water use by data centers. Jurisdictions should also mandate high-efficiency or waterless cooling technologies and incentivize water reuse and conservation offsets.
4. Restructuring Incentives.
WRA highlights that data centers provide far fewer permanent jobs than manufacturing plants—often less than one job per megawatt of electricity used. In light of that, the group recommends that reduced-rate incentives only apply to data centers powered by clean energy and offering measurable community benefits.
An Organization with a Mission.
Western Resource Advocates is a nonprofit policy and legal advocacy group focused on combating climate change and preserving the natural resources of the American West. Based in Boulder, Colorado, WRA partners with communities, scientists, and lawmakers to shape sustainable policy across the energy, water, and land sectors. Their latest report reflects a proactive approach to the technological changes rapidly transforming the region.
While the growth of artificial intelligence and data centers presents significant risks, WRA sees an opportunity for thoughtful leadership to convert those risks into long-term gains. Whether Western states can strike that balance may determine not only the region’s climate future, but its water security as well.
Source:
Western Resource Advocates. Data Center Impacts in the West: Policy Solutions for Water and Energy Use. July 2025. https://westernresourceadvocates.org
