Data Centers Could Threaten Wisconsin Water, Report Warns
Could withdraw some 150 billion gallons of water nationally over next 5 years.
Construction is ongoing on the first phase of Microsoft’s data center project in Mount Pleasant on March 11, 2025. Photo courtesy of Microsoft
Great Lakes states should take steps to protect water resources from increasing demand from data centers and other industries, according to a new report.
The analysis by the nonprofit Alliance for the Great Lakes found data centers may withdraw as much as 150 billion gallons of water nationally over the next five years. The report said that’s the equivalent of water consumed by 4.6 million households.
The report found that Great Lakes states are largely unprepared to meet growing demand as the region sees expansion of data centers, increased agricultural irrigation tied to climate change and potential mining to supply metals for the energy transition.
The Great Lakes hold 20 percent of the Earth’s fresh water, and around 40 million people in the region get their drinking water from the lakes. Between 20 and 40 percent of the water flowing in and out of the lakes comes from groundwater.
The Great Lakes Compact, a landmark agreement among eight states, bars water diversions outside the basin with limited exceptions. Even so, Volzer said states are still seeing high demand for water at home. At the same time, climate change is driving warmer weather, more intense rainfall and drought conditions that could stress groundwater aquifers or affect their ability to recharge.
Volzer, a senior source water policy manager with the Alliance, said local governments and economic development groups haven’t been factoring water into siting decisions for data centers or economic growth. She said states should conduct regional water demand studies to get a better handle on supply and demand.
Wisconsin has 45 data centers, according to the Data Center Map. The report notes a hyperscale data center can use between 1 and 5 million gallons of water per day when evaporative cooling is used, which uses water evaporation to cool the air in data centers. That can add up to be more than 365 million gallons each year or the amount of water used by 12,000 Americans.
“When that evaporative cooling is used, more than half of the water used is evaporated off, and that evaporated water (is) considered consumptive use,” Volzer said. “That’s not necessarily returned to the watershed. That’s the real concern with data centers’ water use.”
The report found a lack of transparency around water and energy use by data centers due to nondisclosure agreements, as well as a lack of reporting requirements when data centers draw from municipal water supplies.
In Wisconsin, large water withdrawals over 100,000 gallons daily in the Great Lakes Basin must be registered and permitted. The requirement may hide water use from data centers that purchase water from municipal systems because only the facility physically withdrawing water must obtain a permit.
The report recommends that states expand registration requirements to any facility that makes large water withdrawals, as well as require data centers to report their energy and water use when water is purchased from municipal supplies.
This is an aerial rendering of what the planned data center campus in Port Washington could look like. Photo courtesy of the City of Port Washington
The Alliance for the Great Lakes also recommends that states map groundwater aquifers, set energy and water conservation standards, revise state groundwater management laws to address potential impacts and eliminate or modify sales and use tax incentives.
In the last two-year state budget, Wisconsin established a sales and use tax exemption for data centers to attract developers. To qualify, developers are required to make a minimum level of investment ranging between $50 million to $150 million over five years based on the population of the county where the data center is located. Once certified, the developer does not have to pay sales and use tax on purchases to support construction or operation of the data center. Data centers don’t typically need more than 100 to 200 jobs to operate, according to the Wall Street Journal. Even so, Volzer said they can spur a secondary wave of economic development.
In Michigan, Volzer noted that lawmakers and Gov. Gretchen Whitmer passed a bill last year providing tax breaks for data centers, but such facilities can only use municipal water from a system with available capacity.
When it comes to regulation, Volzer added Wisconsin should also consider revising laws or regulations to allow the Wisconsin Department of Natural Resources to designate groundwater protection areas or restrictions where needed. The report highlights a study in the Central Sands region that found groundwater withdrawals from hundreds of high-capacity wells for irrigating farm fields significantly lowered water levels in two lakes.
“Consider amending those statutes and regulations to designate them and restrict groundwater use where you know there’s an impact that’s likely to occur, but it hasn’t occurred yet,” Volzer said.
In 2021, the DNR recommended the Legislature create a regional water use district in the Central Sands region to address water quantity issues, but lawmakers have not done so.
Report says growing demand from data centers, industry could stress Great Lakes water was originally published by Wisconsin Public Radio.
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This is a very important article and Wisconsin needs to listen and act now.
I will add that I was sounding this alarm two years ago when everyone online was fawning over the idea of a big company like Microsoft “investing” in the state by building a data center. Ack…as per usual, “self-investing” is more like it.
Open your eyes, people… 👀 Great Lakes state and provinces have a good thing going with so much access to fresh water. Don’t screw it up.