The Information Technology and Innovation Foundation published a policy report on July 6 concluding that data centers' 264 billion annual gallons of water consumption is a problem that mandatory state-level disclosure requirements can solve. The report's own arithmetic does not support that conclusion.

The paper's July 6 coverage of ITIF's initial proposal for mandatory data center water disclosure introduced the framework; today's story examines what the full report actually quantifies. ITIF cites Minnesota's tiered watershed-review model as the template and argues that direct facility-level reporting — requiring data centers to disclose how many gallons they consume for cooling — is the operative solution [1].

The problem is the ratio. Data centers consume water directly, through cooling towers and chillers, and indirectly, through the water power plants use to generate the electricity that runs the servers. ITIF's own figures show that indirect water use through power generation exceeds direct data center cooling by a factor of roughly 12 to 1 [1]. A facility reporting its direct consumption under a mandatory disclosure regime is reporting approximately 8 percent of the water use for which it is responsible. The remaining 92 percent flows through the utility that sells it power.

This is not a gap the report conceals; it is a gap the report acknowledges and then, without adequate explanation, recommends addressing through a disclosure framework that does not capture it. ITIF's answer to the 12-to-1 ratio is that states should require integrated water-energy review — assessing both direct facility use and the water embedded in purchased electricity — but the three state disclosure bills it cites as models do not include integrated review [2]. They require facility-level direct reporting. Virginia, New Jersey, and California each passed data center water-disclosure bills through their respective legislatures. All three were subsequently vetoed by their governors.

That veto record is the empirical evidence against ITIF's optimism about the state-disclosure path. The bills were not blocked by a lack of political will to pass disclosure requirements. They passed. They were blocked by executives who concluded the cost-and-complexity burden the bills imposed on data center operators outweighed the disclosure benefit they would generate [2].

ITIF recommends that states try again. The same governors are still in office in two of the three states. The fiscal calculus that produced the vetoes has not changed. What has changed is that the summer of 2026 has produced a heat emergency in PJM territory, a federal show-cause proceeding, an Illinois incentive suspension, and a Geneva forum all in the same week — which may be the political moment ITIF is actually timing the report toward [3].

Whether that moment produces new state disclosure legislation that survives a governor's veto, and whether any such legislation manages to capture the 92 percent of water use the current disclosure framework cannot see, are questions the report raises without answering.

-- DARA OSEI, London