What Happened?

Between 12 and 20 million American households already struggle to afford water service, according to the Environmental Protection Agency (EPA). Now Congress is weighing two bills that would reshape how the country pays for drinking water, and who picks up the tab when a massive data center moves in next door.

The House Energy and Commerce Subcommittee on Environment held a hearing Sept. 3 on two pieces of legislation: the Safe Drinking Water Infrastructure Improvement Act of 2026 and the Water Cost Accountability Act of 2026. Together, they address a collision between aging water pipes and the surging water demands of artificial intelligence and data centers.

Why Does it Matter to Me?

The Safe Drinking Water Infrastructure Improvement Act of 2026 would renew the Drinking Water State Revolving Fund (DWSRF), a federal loan program that helps states upgrade water systems. The bill also includes point-of-use filters for school drinking water and new tools to fight cyberattacks on water utilities, which the hearing record notes are an increasing threat, especially for smaller systems.

The EPA estimates water systems need between $625 billion and $1.6 trillion over the next 20 years just to keep pipes and treatment plants running.

The Water Cost Accountability Act of 2026 addresses a newer problem. Data centers use enormous volumes of water to cool their servers. Under this bill, data centers would be required to pay the costs of connecting to public water systems, rather than having those costs spread across existing ratepayers.

Both Sides, Now

Republicans and Democrats agree on the basic principle that data centers should pay their own way. Neil Bradley, Executive Vice President and Chief Policy Officer of the U.S. Chamber of Commerce, testified that "data centers should be required to pay for what they use out of the water system," calling cost responsibility essential to keeping public support for large tech projects.

Rep. Gary Palmer (R-AL-6) noted that major tech companies have committed to reducing or replenishing their water use through closed-loop systems and liquid cooling technology. Rep. Brett Guthrie (R-KY-2) said the committee has also worked on legislation to site data centers at brownfield locations where power and water infrastructure already exists.

Democrats largely support the Water Cost Accountability Act but have sharp objections to the drinking water funding bill. Rep. Paul Tonko (D-NY-20), the subcommittee's ranking Democrat, said the discussion draft would cut the DWSRF authorization by more than $2 billion annually compared to current funding levels. The bill also does not renew the Public Water System Supervision Grant Program, which helps states administer drinking water protections. "I cannot support this bill without addressing the reduction and the failure to reauthorize the grant program," Tonko said.

Tonko also raised a practical enforcement concern: state utility commissions do not typically regulate rates for nonprofit public water systems the same way they regulate investor-owned electric utilities, which could complicate how the Water Cost Accountability Act works in practice.

The administration has pursued a parallel voluntary path. The White House launched the Ratepayer Protection Pledge in March, under which companies voluntarily negotiate separate rate structures with utilities and state governments wherever they build data centers. By July, according to the White House, more than 200 utilities, data center developers, cooperatives, and states had joined the pledge. The EPA also announced $25 million in June to improve drinking water in small and rural communities.

What Happens Next?

Both bills remain in the discussion draft and hearing stage. Neither has been scheduled for a full committee vote. For either to become law, it would need to pass the full House Energy and Commerce Committee, clear a floor vote in the House, pass the Senate, and be signed by the president. Democrats have signaled they will push for higher DWSRF funding levels before supporting the infrastructure bill. There is no timeline set for any of those steps.

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