Data centers emerge as a possible tool for improving water infrastructure in West Virginia

Power Generation and Consumption Act of 2025

Imagine turning on your faucet and wondering what will come out. Southern West Virginia has faced long-running water problems, and new data center proposals have added questions about development, jobs, and infrastructure needs.

State officials have discussed data-center tax revenue as one possible source for water-system improvements. State records and recent reporting document longstanding concerns about water quality, reliability, and aging infrastructure in the region.

Power Generation and Consumption Act and water

On September 15, Nicholas Preservati, director of West Virginia’s Office of Energy, appeared before lawmakers to discuss coalfield development and energy issues. Del. Mark Zatezalo raised concerns about Southern West Virginia’s longstanding water problems.

Preservati said West Virginia’s water challenge is generally more about quality than statewide water quantity. He also said data-center tax revenue could help counties pay for water infrastructure and sewage improvements.

Power Generation and Consumption Act and data

House Bill 2014 became law in April 2025 and took effect July 11, 2025. Its official title is the Power Generation and Consumption Act of 2025, and it created programs for certified microgrid districts and high-impact data centers in West Virginia.

The law defines a high-impact data center as a facility meeting several conditions, including at least 90 megawatts of critical IT load and being placed into service on or after July 1, 2025.

Southern communities already face water trouble

West Virginia’s southern coalfields have dealt with water-quality and reliability concerns for years. In 2026, lawmakers introduced Senate Concurrent Resolution 7 calling for a study of the southern water crisis, with particular attention to McDowell and Wyoming counties. The resolution remains pending.

A USGS study of 60 private groundwater sources in the southern coalfields found turbidity above the 1-NTU treatment benchmark at 51 sites. Manganese and iron also exceeded referenced secondary drinking-water thresholds at many sampled locations.

Data centers can use plenty of water

Data centers need cooling because computer equipment produces heat. Water demand varies with cooling technology, facility design, climate, operating conditions, and other factors, so facilities can have very different water footprints.

A 2024 Lawrence Berkeley National Laboratory report estimated direct U.S. data-center water consumption at about 66 billion liters in 2023. Its modeled scenarios put direct consumption at roughly 145 billion to 275 billion liters by 2028.

Closed-loop cooling changes the equation

Not every data center relies on the same cooling setup. Cooling towers that evaporate water can require significant makeup water, while closed-loop systems circulate coolant rather than constantly replacing the same volume, potentially reducing direct water consumption.

West Virginia officials have pointed to closed-loop cooling for proposed facilities in the state. That can reduce water needs, but it does not automatically mean zero water use, because facilities still need water-related services and projects must account for their particular design and local infrastructure.

Little-known fact: U.S. data centers consumed about 176 terawatt-hours of electricity in 2023, equal to roughly 4.4% of total U.S. electricity consumption.

A slice of tax revenue targets water

House Bill 2014 created a special formula for certain property-tax increases tied to certified high-impact data centers. Under the final law, 5% of the tax increment goes to the Economic Enhancement Grant Fund administered by the West Virginia Water Development Authority.

The same tax-increment formula sends 30% to the county where the project is located, 10% to counties statewide on a population basis, 50% to the Personal Income Tax Reduction Fund, and 5% to an electric grid stabilization fund.

Little-known fact: A USGS study of 60 groundwater sites in Southern West Virginia found 82% had water classified as potentially corrosive based on the Langelier Saturation Index.

Local control became a major issue

The law limits the ability of counties and municipalities to impose or enforce many local requirements on certified high-impact data centers, including certain zoning, land-use, building, inspection, and licensing rules.

The statute creates a statewide regulatory framework for qualifying projects. Gov. Patrick Morrisey and other supporters have presented the law as part of a strategy to attract data centers and related investment to West Virginia.

Lawmakers rejected proposed water guardrails

During 2026 rule debates, lawmakers considered amendments focused on water protection. Del. Evan Hansen proposed requiring developers to disclose planned water sources, expected water use, and possible effects on local supplies, but the House rejected the amendment by a 23-70 vote.

Delegates Henry Dillon and Chris Anders also proposed limits related to groundwater, citing concerns about private wells and other local water sources, and they sought added protections.

Mason County shows how fast this is moving

West Virginia has already certified major proposed data center projects in Mason County. One is the Nscale Monarch Campus near Point Pleasant, which is planned alongside a natural gas power plant and remains in the state permitting process.

Another project, called Project Tamarack, was announced in September by Starwood Digital Ventures. The company says the proposed complex would require 2.16 gigawatts of power from the existing grid and use closed-loop cooling.

Residents are watching the water closely

In Mingo County, residents have questioned how a proposed power plant and data center could receive new water access while some households experience days or weeks without reliable service. They have raised concerns about the project’s potential effect on local supplies.

Maria Russo, a policy specialist with the West Virginia Rivers Coalition, called for examining cumulative effects on water quality, water quantity, and flooding. She also said communities need infrastructure investment and clearer information about how costs, benefits, and decisions will be handled.

Rules and public input are still developing

West Virginia’s Department of Commerce has an active rule governing petitions for certification of microgrid districts and high-impact data centers. The rule took effect April 1, 2026.

A separate Public Service Commission proceeding is addressing electric-generation rules connected to HB 2014. The commission has scheduled a public comment hearing for September 28, 2026, in Charleston, keeping the broader regulatory process active.

Wondering how nearby states are preparing for weather risks? See Virginia’s hurricane season outlook and see why even a quieter season can still bring serious threats.

The big question is what comes next

West Virginia is trying to connect economic development with a difficult infrastructure challenge. Data centers could bring construction, tax revenue and major energy investment, while communities still need dependable water supplies, effective treatment systems and infrastructure suited to local conditions.

The debate now centers on practical questions: where projects will obtain water, how much they will use, who pays for infrastructure upgrades, how tax revenue will be distributed and how much influence local communities will have over development.

Curious how West Virginians view another major public policy issue? Check out the latest look at school vaccine mandates and public opinion in the state.

Could data center investment really help fix West Virginia’s water systems, or are there bigger concerns to solve first? Share your thoughts in the comments.

This slideshow was made with AI assistance and human editing.

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