Water Solutions 11: What Data Centers Need from Water

WestWater Research joined Water Solutions 11: The Water Data Center Nexus, hosted by Sustain SoCal on August 13, 2026 at UCI Beall Applied Innovation. Isabelle Lavoie, Research Associate, spoke on the panel “Water Value for Data Centers: What are Markets Telling Us?” alongside Zach Smith, Counsel – Water Practice, O’Melveny & Myers LLP. The day brought together utilities, developers, water agencies, and legal counsel to work through one question: how does the water sector keep pace with data center growth.

Key takeaways from the event include:

• Development speed is outrunning infrastructure. Data center projects are moving faster than the power and water infrastructure needed to serve them. Utilities and water providers are working to catch up to demand that is already here.

• Water drives community pushback. Panelists noted that water concerns surface more often than power grid concerns in community opposition to new projects. Co-location is emerging as a siting strategy to manage this: water providers and industrial users are partnering directly, with some data centers investing in local water reuse projects to secure their own supply while adding capacity for other users in the region.

• Reliability outweighs price. Data centers are less price sensitive than other water users and will pay a premium for a dependable supply. Water reliability, more than cost, is shaping where projects get sited and how they get designed.

• Markets are pricing that reliability. Water market activity offers a read on reliability, with surface water prices showing more volatility than groundwater in California. To compete for supply, large industrial users need an acquisition strategy, whether through brokers or partnerships with municipalities, and in some regions a single water source won’t be enough. A diversified water portfolio is becoming the norm for projects that need firm, long-term reliability.

The throughline across the day: data center growth is now a water market story as much as a power story. WestWater Research advises industrial users, utilities, and water rights holders on the transactions, valuations, and market analysis behind these decisions, backed by Waterlitix™, our proprietary water transaction database. If you’re evaluating a site, structuring a supply portfolio, or pricing a water right against data center demand, WestWater can help.