Congress Targets Data Center Water Use as Canada-U.S. Trade Tensions Threaten Power Flows

Returning from August recess, the House Energy and Commerce Committee scheduled a Sept. 3 hearing to review the Water Cost Accountability Act, a proposal that would obligate data-center owners to pay for water consumption, fund necessary infrastructure upgrades, and publicly disclose water sources. Chairman Brett Guthrie emphasized the need for confidence that developers are managing local supplies responsibly, even as newer technologies reduce overall water use.

The committee previously advanced the bipartisan Ratepayer Protection Act, which also seeks to shift grid-upgrade costs onto data-center operators. Meanwhile, trade tensions between the United States and Canada have intensified, with both sides imposing 50% tariffs on a range of goods and Canada’s Premier Doug Ford hinting at halting electricity exports from Ontario to states such as New York, Michigan and Minnesota. Experts note that a shutdown by Ontario alone might have limited short-term price impact, but broader provincial actions could raise electricity costs regionally.