Water Planning: City Contracts, Water Rights and Reclaimed Supply

A data center's water use usually gets described as a number: so many gallons a day. The planning question is where those gallons come from, who has the legal right to them, and what happens on the hottest week of a dry year. In Idaho, that means water rights under the prior appropriation doctrine, the Idaho Department of Water Resources (IDWR), and the city utility if there is one.

How much water a given cooling design uses is covered in the water lesson of the impacts module. This lesson is about supply.

Where the water can come from

Path	Who decides	Public process	Main risks
City or water district supply contract	City council or district board; the provider must already hold enough water rights	Council vote; sometimes bundled with annexation	Peak-day capacity, priority in shortages, who pays for new wells and pipes
New groundwater right	IDWR	Published notice, 10-day protest period, hearing if protested	Moratorium areas, injury to senior rights, aquifer decline
Transfer of an existing right	IDWR	Same notice and protest as a new application	Taking water out of farming; injury and enlargement tests
Reclaimed (recycled) water	City wastewater utility, with state environmental permits	Council vote; DEQ permit	Pipeline not built yet, seasonal limits, existing commitments to reuse

City supply

Most data centers that want city water also want city sewer, which is a big reason projects ask to be annexed. Idaho Code 42-202B defines municipal purposes to include industrial use, when a municipal provider supplies it to users in its service area. It also lets providers hold water rights for "reasonably anticipated future needs," but those needs must fit the land use plans the municipality has approved. So a city's land-use plan, its annexation decisions and its water rights all connect. A city that says it has "plenty of water rights" should be asked: how much is in hand and pumpable today, and how much is a paper right for future growth?

The key city document is the will-serve letter, followed by a water service agreement. Ask for both.

New groundwater rights

A data center on its own wells needs a permit from IDWR, unless it qualifies for a small domestic exemption, which a data center will not. Under Idaho Code 42-203A, notice runs once a week for two weeks in a local newspaper (statewide circulation for diversions over 10 cfs or 1,000 acre-feet) and on IDWR's website. Protests are due within 10 days of the last publication. The director can reject or condition an application whether or not anyone protests, if the use would:

• reduce the water under existing rights;
• draw on an insufficient supply;
• be made in bad faith or for speculation;
• be beyond the applicant's financial resources;
• conflict with the local public interest;
• be contrary to conservation;
• hurt the local economy of the source watershed, when the water leaves it.

In much of southern Idaho, new consumptive rights are hard to get at all. IDWR's amended Snake River Basin moratorium order, dated July 16, 2024, suspends processing of new applications for consumptive use of surface and ground water in large parts of the basin. Exempt from the suspension: domestic use, non-consumptive uses, replacement wells and transfers of existing rights. Municipal and community water system applications are presumed fully consumptive unless the applicant rebuts that with detailed evidence, including monitoring and mitigation commitments. The director can approve an otherwise barred application case by case if it serves the public interest or will not affect prior rights because of mitigation or insignificant consumption.

The 2026 data center cooling law

House Bill 895, signed April 2, 2026, added Idaho Code 42-252. A data center (as the sales tax statute defines one) that begins construction on or after July 1, 2026 may not use water for cooling as a consumptive use unless the water is supplied by a municipal, water district, or water and sewer district system. The bill's findings tell the IDWR director that, for new appropriations and transfers, data center water use conflicts with the local public interest and is contrary to conservation. So for evaporative cooling, the private-well and farm-transfer paths below are close to shut, and the city contract becomes the main road. Closed-loop and dry designs that consume little water are less affected. Ask which cooling design a project plans before you decide which path applies.

Transfers

Where new rights are closed, the path is buying an existing right, usually irrigation, and changing it. Idaho Code 42-222 lets IDWR approve a change only if it causes no injury to other rights, does not enlarge the original use, is consistent with conservation and the local public interest, and is a beneficial use. And one clause matters a lot in farm country: the director shall not approve a change away from agricultural use that would significantly affect the agricultural base of the local area. Transfers get the same 10-day protest window after notice.

A transfer is also a public record of who bought whose water. If an LLC buys a farm and files to change its right from irrigation to industrial, that filing may be the first document that names the project's water plan.

Reclaimed water

Treated city wastewater can feed cooling systems that would otherwise use drinking water. It is the usual answer when residents worry about wells. Questions: Does the pipeline exist, or is it planned? Is the effluent already committed to another reuse or to a river discharge someone downstream relies on? What happens in winter, when cooling needs fall but effluent keeps flowing, or in summer, when the reverse happens? Tucson's Project Blue offered reclaimed water after two years on potable supply; the council rejected the deal in August 2025 anyway.

Units, and the math that matters

Unit	Equals
1 acre-foot	325,851 gallons
1 cubic foot per second (cfs)	about 448.8 gallons per minute, or about 646,317 gallons per day
1 million gallons per day (MGD)	about 1.55 cfs, or about 1,120 acre-feet per year

Compare Lancaster, Pennsylvania's community benefits agreement, which caps municipal water at 20,000 gallons a day per campus and requires closed-loop cooling. The site's previous user averaged 100,000 to 125,000 gallons a day. A cap like that is a design choice, usually dry or closed-loop cooling that trades water for more electricity on hot days.

What belongs in a water service agreement