Why It Matters

The House Energy and Commerce Subcommittee on Environment held a hearing on September 3 to examine legislation reauthorizing drinking water programs and addressing water demands from data centers.

The Trump administration backs water reuse for data centers through its Water Reuse Action Plan 2.0, but Democrats argue the proposed legislation doesn't go far enough to protect ordinary Americans from shouldering the bill.

The Big Picture

The EPA estimates water systems need between $625 billion and $1.6 trillion over the next 20 years to modernize and secure aging pipes and treatment plants.

The Safe Drinking Water Infrastructure Improvement Act of 2026 would reauthorize the Drinking Water State Revolving Fund (DWSRF), first established in 1996 amendments to the Safe Drinking Water Act. The bill includes support for rural and smaller water systems, point-of-use filters for school drinking water systems, and new authority to address cybersecurity threats.

Rep. Paul Tonko (D-NY-20), the ranking Democrat on the Subcommittee on Environment, says the bill slashes DWSRF authorization by over $2 billion annually compared to current levels. He also points out it fails to reauthorize the Public Water System Supervision Grant Program, which helps states administer drinking water protections.

The Water Cost Accountability Act of 2026 is intended to protect ratepayers from costs associated with local water systems serving data centers. The Water Cost Accountability Act would ensure that data centers are responsible for paying the costs associated with connecting to public water systems.

This hearing fits into a broader collision between the Trump administration's push to accelerate data center development and growing state-level concerns about water depletion. In 2025, more than 200 bills addressing data centers were introduced across all 50 states, with more than 40 enacted into law, according to the Information Technology and Innovation Foundation. Water usage legislation is gaining momentum in 2026 as states increasingly require data centers to disclose and manage consumption.

The administration launched the Ratepayer Protection Pledge in March, under which companies voluntarily negotiate separate rate structures with utilities and state governments. According to the White House, by July, more than 200 additional utilities, data center developers, cooperatives, and states had joined the Ratepayer Protection Pledge. The EPA also announced $25 million in June to improve drinking water in small and rural communities.

What They're Saying

"Data centers should be required to pay for what they use out of the water system," said Neil Bradley, Executive Vice President and Chief Policy Officer of the U.S. Chamber of Commerce. Bradley argued that the principle of cost responsibility is essential to maintaining public support for large projects like data centers.

Rep. Tonko stated that the discussion draft would reduce the authorization level for the drinking water state revolving fund by over $2 billion annually compared to the current year's level. "I cannot support this bill without addressing the reduction and the failure to reauthorize the grant program," he said. He also flagged a vulnerability: water systems facing increasing cyber attacks, with many smaller systems lacking capacity to prepare and respond.

Rep. Gary Palmer (R-AL-6) countered that major tech companies have committed to reducing or replenishing water use through investments in closed-loop systems, liquid cooling, and other technologies.

Rep. Brett Guthrie (R-KY-2) noted the committee has worked on legislation supporting data centers at Brownfield sites where power and water infrastructure already exist. He emphasized the Water Cost Accountability Act would ensure data centers pay connection costs.

Mae Wu from Health and Environmental Advising, LLC and Julie S. Moore from the Vermont Agency of Natural Resources testified at the hearing.

Rep. Tonko raised a critical implementation question, saying that state utility commissions don't typically regulate rates for not-for-profit public water systems the same way they do investor-owned electric utilities.

Political Stakes

Between 12 and 20 million U.S. households lack affordable access to water services, according to the EPA. Rep. Tonko and Ranking Member Frank Pallone Jr. (D-NJ-6) proposed a permanent water affordability program similar to the Low Income Home Energy Assistance Program (LIHEAP) in 2024, a marker of Democratic priorities that hasn't gained traction.

In March, the White House launched the Ratepayer Protection Pledge under which companies will voluntarily negotiate new, separate rate structures with their utilities and relevant State governments wherever they build data centers. EPA Administrator Lee Zeldin framed the Water Reuse Action Plan 2.0 as a way to harness the power of water reuse for American industry, the artificial intelligence future, and American energy dominance while strengthening public health protections and safeguarding the nation's water resources.

The Bottom Line

Congress is trying to write rules for a collision that hasn't fully arrived yet. Massive water demand from data centers are meeting chronically underfunded drinking water systems in communities that have little bargaining power.

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