Data Centers Program: Understanding Economic Considerations and Opportunities for Water and Wastewater Utilities

The Water Research Foundation (WRF) invites proposals to help water utilities manage the growing water demands of data centers. This 18-month project focuses on assessing water, wastewater, and energy needs, evaluating infrastructure risks, and developing practical decision-making tools for utilities to support sustainable and cost-effective service.

Overview

The Water Research Foundation (WRF) is launching a new initiative to support water utilities in managing the rapid expansion of data centers, a highly water-intensive and rapidly growing industry. The project aims to provide utilities with the knowledge and tools to assess infrastructure needs, optimize operations, and mitigate financial risks while supporting local economic development.

Objectives

1. Assess Data Center Water and Energy Requirements

• Develop a detailed overview of different types of data centers and their associated water, wastewater, and energy demands.

• Examine how facility capacity, cooling technologies, and site conditions affect resource use.

• Detail water quality and treatment needs, including implications of evaporative cooling systems and discharge streams for utilities.

2. Enhance Utility Planning and Infrastructure Management

• Identify critical data that data centers should provide to utilities for effective planning.

• Define the information utilities should maintain to attract new investments responsibly.

• Support infrastructure assessments to prevent overloading or underutilization of utility systems.

3. Address Economic Risk and Rate Management

• Evaluate financial exposure for utilities due to large-scale data center water demands.

• Explore alternative rate structures, development fees, and contractual arrangements.

• Provide guidance on contract components for unique high-load customers to prevent stranded assets and protect cost recovery.

4. Develop Practical Tools and Guidance

• Create a Utility Decision Toolkit with:

  • Financial modeling templates

  • Model contract clauses

  • Rate design options

  • Seasonal capacity charge structures

  • Planning maps highlighting higher development risk areas

Who Can Apply

• U.S. and international universities, research institutions, government agencies, consultants, and other for-profit entities.

• Organizations with expertise in water utility operations, infrastructure planning, or data center management.

How the Research Will Be Conducted

1. Literature Review and Policy Analysis: Assess current knowledge on data center water use and utility practices.

2. Current Practice Studies: Evaluate real-world approaches used by utilities in regions with rapid data center growth.

3. Stakeholder Engagement: Conduct interviews and workshops with utilities across diverse geographies and climates.

4. Toolkit Development: Integrate findings into a decision-support tool for utility managers, including technical, financial, and operational guidance.

Why It Matters

• Sustainable Resource Management: Supports utilities in balancing growing industrial water demands with community needs.

• Economic Resilience: Mitigates financial risks from infrastructure upgrades or facility relocations.

• Operational Efficiency: Provides utilities with actionable tools to optimize water and wastewater management.

• Strategic Planning: Strengthens capacity for long-term infrastructure investment decisions in rapidly developing regions.

Common Mistakes to Avoid

• Submitting proposals without clear methodology for stakeholder engagement.

• Failing to demonstrate understanding of both technical and financial aspects of utility operations.

• Neglecting to address both water and wastewater implications for data center operations.

FAQ

1. What is the project’s focus?
   Understanding and managing water, wastewater, and energy demands of data centers to support utility planning and risk management.

2. Who can submit proposals?
   Universities, research institutions, government agencies, consultants, and for-profit organizations both in the U.S. and internationally.

3. What is the project duration and funding?
   18 months, with funding up to $200,000.

4. What will the Utility Decision Toolkit include?
   Financial modeling templates, contract clauses, rate design options, seasonal capacity charge structures, and planning maps.

5. Why is this research important for utilities?
   Data centers create high and variable water demands; proper planning prevents infrastructure strain, financial exposure, and ensures sustainable community service.

6. How will stakeholder input be used?
   Insights from utilities and industry stakeholders will inform best practices, risk assessments, and toolkit development for practical application.

7. What types of data centers are included?
   Large-scale commercial, industrial, and institutional facilities with high cooling and water requirements.

Conclusion

This WRF initiative provides utilities with critical insights and tools to manage the rapidly growing data center sector. By understanding water and wastewater demands, planning infrastructure investments strategically, and mitigating financial risks, utilities can ensure sustainable service, support economic development, and protect community resources.