By Adam Effler, Executive Director at the Owasco Lake Watershed Management Council

Data centers impact water quality primarily through high-volume consumption, chemical discharge, thermal pollution, and indirect pollution from power generation. These impacts directly affect local watersheds, drinking water supplies, and agricultural resources. Data centers heavily rely on water-intensive evaporative cooling. During this process, they introduce several pollutants into local wastewater systems.  Facilities routinely add biocides (to prevent algae/bacteria), corrosion inhibitors, and anti-scaling agents to their cooling systems. If improperly treated or spilled, these chemicals degrade local surface water quality.  Trace amounts of metals like copper, zinc, and lead can leach into the water as the cooling system’s metal components degrade over time. As water evaporates from open-loop cooling towers, the remaining salts, minerals, and existing contaminants become highly concentrated. Discharging this dense, saline water into nearby rivers or farm fields can harm aquatic ecosystems and contaminate groundwater. Cooling thousands of hot servers means data centers constantly discharge large volumes of heated water back into the environment. This thermal pollution lowers the dissolved oxygen levels in local streams, lakes, or aquifers, which can harm aquatic life and promote harmful algal blooms.

Data centers are massive consumers of electricity, and the power plants supplying this energy frequently rely on water for cooling. Coal and natural gas power plants withdraw billions of gallons of water annually; in the process, they alter water temperatures and return polluted water back to the local watershed, compounding the overall environmental toll.  Many data centers pull freshwater directly from municipal utility lines or underground aquifers. In drought-prone or heavily developed regions, heavy pumping lowers the water table. Lower water tables and reduced streamflow naturally increase the concentration of any existing pollutants in the remaining water.

On June 4, 2026, the New York State Legislature passed the Responsible Data Center Development Act, which includes a one-year moratorium on permits for new large-scale data centers while the state studies their environmental, energy, water, and community impacts. The measure was scaled back from an earlier proposed three-year ban and is intended to give policymakers time to develop regulations for the rapidly growing data center industry, particularly facilities supporting artificial intelligence and cloud computing. The bill also requires an environmental impact report, public hearings for major projects, energy-efficiency standards, and protections for ratepayers and host communities. Supporters argue the pause is necessary because large data centers consume significant amounts of electricity, water, and land, potentially increasing utility costs and environmental pressures. Opponents, including business and technology groups, contend that the moratorium could discourage investment, slow economic development, and weaken New York’s competitiveness in the AI and technology sectors.  As of June 25, 2026, the bill still requires approval from Governor Kathy Hochul to become law.