Hutto data campus fuels Texas water concerns

Skybox Datacenters’ project in Hutto is not a zoning fight in the abstract. It is a real, fast-moving industrial buildout in one of the state’s fastest-growing corridors, and it is landing in a region that local officials already describe as water-constrained. That combination is why the Hutto campus has become a useful case study in a broader Texas problem: data centers need large amounts of power, and in many cases they also need water — directly for cooling and indirectly through electricity generation. A new University of Texas at Austin white paper has now put a statewide number on that concern, estimating data centers could account for 3% to 9% of Texas water use by 2040. ### How big is the Hutto campus that is driving the concern? Skybox Datacenters has described PowerCampus Austin in Hutto as a 160-acre site designed for 300 to 600 megawatts of power. The company says the campus is aimed at hyperscale users, and outside industry coverage has described the project as capable of reaching roughly 4 million square feet. (news.utexas.edu) Texas Department of Licensing and Regulation records show the Hutto site is already moving through multiple construction phases. One filing lists “Skybox - Hutto 1” at 4200 County Road 132 with an $86 million budget and a start date of January 1, 2024. Another filing lists “Skybox - Hutto 2 Fit Out” with a $125 million budget, a start date of October 1, 2025 and a completion date of June 1, 2026. A separate filing for “Skybox - Hutto 2 Fit Up” lists a $470 million budget and an October 15, 2026 completion date. (skyboxdatacenters.com) ### Why does water come up even when a data center is mostly about electricity? The University of Texas paper published May 6 says the water question is larger than what happens inside a server building. The estimate includes water used on-site for cooling and water used to produce the electricity that powers the facility. UT researchers said Texas data centers currently account for less than 1% of statewide water use, but that share could rise sharply depending on growth, cooling technology and the electricity mix. (tdlr.texas.gov) Mariam Arzumanyan, a postdoctoral fellow at the Bureau of Economic Geology, said in the UT release that “there’s a lot of uncertainty” around data-center water use and that there is no unified understanding of which cooling technologies are being used or how much water each uses. The paper calls for greater transparency, shared standards and more coordinated planning among industry, utilities and local governments. (news.utexas.edu) ### What have Hutto officials said about local water limits? Hutto officials were warning about water constraints before the latest statewide research landed. In a January 2025 Fox 7 Austin interview, city engineer Matt Rector said Hutto is “in a water constrained area” and is trying to balance current service with future growth. Rector said the city already had contracts that would add 9 million gallons per day in coming years, but added that may still not be enough if the city approves every request. (news.utexas.edu) Mayor Mike Snyder said in the same report that water was the city’s remaining tool to shape growth. The city can choose whether to serve some developments outside its certificated service area, according to that report, giving local officials leverage as they weigh new industrial and residential projects. (fox7austin.com) ### Is the Skybox campus the only Hutto project raising alarms? Hutto residents have also pushed back against a separate proposed data center by Zydeco Development at 450 Ed Schmidt Boulevard. At an April 8, 2026 Planning and Zoning Commission meeting covered by KXAN, residents raised concerns about water use, power demand and pressure on city utilities. Zydeco principal Wes Gilmer said the project would use a closed-loop cooling system that recycles nearly all of its water and would have a maximum power demand of about 70 megawatts. (fox7austin.com) That dispute matters because it shows the local debate is no longer tied to one parcel or one developer. In Hutto, the question has become how a fast-growing city evaluates multiple large users at once when water supply, wastewater capacity and electric infrastructure are all under pressure. That framing matches the UT paper’s recommendation for integrated planning rather than project-by-project decisions made in isolation. (kxan.com) ### What happens next in Hutto? June 1, 2026 is the listed completion date for the current “Skybox - Hutto 2 Fit Out” phase in Texas licensing records. Hutto officials, developers and utilities will continue to face the same practical question after that date: how to add computing capacity in Central Texas without outrunning the region’s water and infrastructure limits. (tdlr.texas.gov) (news.utexas.edu)