Ahead of the January legislative session, Wyoming lawmakers are moving forward with one of two proposed ways to regulate responsible water use as data center development grows across the state.
During a meeting on Friday, the Select Water Committee considered a proposal for caps on water consumption for hyperscale data centers and a suggestion for further study of groundwater resources.
The conversations come amidst significant data center development across the state in recent years. In Cheyenne, there are 10 existing data centers, with seven under construction and eight more in the planning phase, according to economic development non-profit Cheyenne LEADS. Two of these data centers began construction in the last three months, according to the nonprofit’s reports.
Prometheus Hyperscale’s proposed data center in Evanston is slated to have up to 5 gigawatts of power capacity. It is among the largest in the nation.
Laws limiting water use and requiring reporting have become increasingly prevalent nationally as the industry – and demand from Artificial Intelligence technology – grows. The National Conference of State Legislatures conducted a review of 2025 and 2026 legislation that identified about 100 bills and resolutions in 39 states that addressed data center water use and related planning.
In Wyoming, lawmakers recently supported bringing the proposal for an expansion of an existing groundwater study into the upcoming legislative session. The committee did not sponsor the proposal for water consumption restrictions, citing legal concerns with the proposed language.
Understanding groundwater
Lawmakers on the water committee voted unanimously in support of a proposal for a $2-million groundwater survey. The proposal will be introduced at the next Legislative session in the proposed omnibus bill.
The move, if implemented, would build upon a 2026 legislative bill that required the state engineer to conduct a groundwater study in control areas. Control areas are issued by the Wyoming State Board of Control in drier areas where there’s less water available.
Sen. Brian Boner (R-Douglas), who crafted the proposal along with Sen. Taft Love (R-Cheyenne), said the state is effective in evaluating surface water availability, but said evaluation of groundwater is “more of a guessing game.”
The proposal would expand the study to other parts of the state, outside of control areas, that are likely for development.
“I want to make sure that we future-proof and continue to iterate on the theme that’s been the theme since statehood, which is being very intentional about controlling our water and protecting existing users,” Boner said.
The senator said that under the existing structure, the state must wait until an area begins to experience water shortages before a control area can be established. He said this reactive approach may not properly inform the development of potential future large-scale data centers in many areas.
“If we don’t have a holistic approach and we just focus on the building itself that everybody’s worried about, I think that we’re missing the mark.”
Sen. Ogden Driskill (R-Devil’s Tower) suggested statewide water quality sampling be conducted in tandem with the study, which Boner said would primarily focus on the quantity of groundwater available.
“Even if they use it, if we pollute an aquifer, that’s probably more dangerous than anything,” Driskill said in a discussion about water use by data centers.
Over the summer, Meta’s Cheyenne data center made national headlines when it was revealed that the development had discharged water with a rare and potentially hazardous bacteria into the city’s wastewater supply. In addition, the proposed Stratos data center in northern Utah may emit dangerous levels of fine particulate matter linked to premature death, heart disease and respiratory illness, according to a report by the National Resource Defense Council. The organization said the pollution may impact people in Utah, Idaho, Colorado and Wyoming.
Driskill supported the idea of a groundwater study, but said that Wyoming’s laws shouldn’t prioritize conservation of water as much as it should focus on the “wise use” of water resources.
“I think we’re starting to get into the perception that we’re actually saving something by not using water. Wyoming’s laws were all based on maximum use of water for the biggest benefit,” Driskill said. “You don’t save anything by not using it. We need to use every drop of water before it leaves the state if it’s in a stream, and if it's underground, we need to make sure it’s protected and it’s there for the use of Wyoming citizens.”
At the inception of modern water laws in Wyoming, starting around 1890, water rights were tied to actual use of water. Water rights applications are determined by practical and financial likelihood of success and are weighed with need and best public interest. This management of water led to early farming and ranching resilience through drought years.
Now, many southern basin states in the Mountain West are experiencing significantly depleted water availability amidst the continued Colorado River shortage. Nevada and Arizona are in an ongoing legal battle against federal government agencies over water restrictions as a result.
The legal line
The committee also weighed a proposed bill draft that would limit the consumptive use of water by data centers, limiting water used for cooling to 0.2 liters for every one kilowatt-hour of electricity consumed over a year.
The bill draft was crafted by Rep. Ken Chestek (D-Albany), who said it aimed to protect the “precious resource” of water.
Chestek said that while most data centers in Wyoming are using closed-loop cooling systems, in which water is recirculated and water use is limited, the state should not hope that companies continue to use the technology. He said the bill draft focused on protecting water resources instead of dictating how companies should operate.
“This formula does not require a closed loop system,” Chestek said. “This is not requiring a specific technology. This is requiring an outcome.”
The bill focuses on “consumptive use,” which accounts for both water withdrawn from a water source as well as the water that’s replenished. It is not a measurement of how much water is used by a data center, but rather what the net loss from a water system is. This would allow for hyperscale projects to replace their water use.
Khara Boender, with the Data Center Coalition, told lawmakers that the industry’s use of water has become increasingly misunderstood, as technology has advanced.
“America faces serious water infrastructure challenges, and data centers are active partners in building resilience,” Boender said. “We are investing billions into infrastructure upgrades globally, setting water positive goals, and deploying advanced cooling systems across the country, including right here in Wyoming.”
Hyperscale data centers across the country have poured funds into community projects in an effort to offset their large impact. Microsoft’s data center in Cheyenne has committed to supplying the community with more water than it consumes. However, that pledge by the company is not backed with any legal protections.
Several Wyoming lawmakers have spoken out in support of the growing industry and the potential for increased revenue for the state. On Tuesday, State Treasurer Curt Meier said incoming data centers, like those currently proposed in Cheyenne, could significantly contribute to the state’s budget.
“I know a lot of people aren’t really excited about data centers, but if we had another six data centers going in in southern Laramie County, we would have the same amount of money in our budget as the general budget in new revenue,” Meier said during a canvassing board meeting. It was unclear if the growth Meier highlighted was in reference to state or county funds.
As lawmakers considered Chestek’s proposed bill on Friday, they posed a slew of concerns. Rep. J.T. Larson (R-Rock Springs) said that as industry develops more power efficient ways to run data centers, many may not meet the qualification for hyperscale data centers as defined in the bill, regardless of size. Rep. Justin Fornstrom (R-Pine Bluffs) said the bill was limited by exclusively considering water used in the cooling systems, and not electricity generation.
Idaho, Oklahoma and Minnesota all have recently passed bills that, to varying degrees, work to require data center developments to use closed-loop water systems.
However, Wyoming lawmakers cited 14th Amendment concerns. That amendment requires governments to provide “any person within its jurisdiction the equal protection of the laws.” Committee members said that Chestek’s proposed bill may be discriminating against data center developers, since other large Wyoming industries such as mining, farming, hospitality and carbon capture industries also use significant amounts of water.
“The data centers have choices. They don't need to use water,” Chestek said. “Other industries do need the water. The water is what they need to apply to the crops or for the animals.”
The committee failed to move the idea forward for introduction during the January legislative session.
