Residents are pushing back on a proposed North Texas data center that would pull up to 5 million gallons of water a day from Cedar Creek Lake in Henderson County — the reservoir that provides most of Fort Worth’s drinking water.
Members of the public cite concerns about insufficient resources and say Kansas-based Diode Ventures, which proposed the data center, has not been transparent about the scope of the project.
Details on the costs and acreage of the data center are unknown as Diode continues to evaluate sites in Henderson County, a company spokesperson said.
“Because our review of potential sites in Henderson County is in the very early stages, many project details have not yet been determined,” a Diode spokesperson said in a statement.
The company’s future projects will undergo regulatory review, permitting and community input as planning progresses, the spokesperson said.
The data center would be located west of Cedar Creek Lake between the cities of Trinidad and Tool, according to West Cedar Creek Municipal Utility District records obtained by the Fort Worth Report.
Since learning about the project, residents have gathered to amplify their community-led opposition through local advocacy group Save Cedar Creek.
The construction of a data center would compromise a water supply that serves millions of residents, most in Tarrant County, said Ashley Cook, an attorney and Henderson County property owner.
“This site is so unique,” Cook said. “I think everyone would agree that that’s not a great place for a data center.”
The project would also have harmful effects on wildlife and the Carrizo-Wilcox Aquifer it would border as well as for residents with lakefront property, Cook said.
On May 21, the West Cedar Creek Municipal Utility District — the agency that provides treated water to municipalities across 20 square miles in Henderson County — moved forward a temporary suspension on “high-intensity water service commitments.” The suspension came months after developers, including Diode, expressed interest in the rural East Texas county to build data centers, according to a report from Tyler-based television station KLTV.
Effective through April 1, 2027, the suspension was passed to ensure reliability of the utility’s water system and maintain sufficient supplies in the event of drought and emergencies, according to the resolution. The suspension also allows the utility district staff time to evaluate and conduct analysis on the availability of supplies, projected demands and impacts to the local wastewater treatment system, among other factors.
As a result of the freeze, data center development came to a halt, East Texas station KETK-TV reported, but residents demanded to see lawmakers create statewide limitations on the water and power-dependent tech facilities as early as the 2027 legislative session, Cook said.
How much water would the project call for?
The Cedar Creek Reservoir, owned and operated by the Tarrant Regional Water District, is one of two East Texas lakes that supply between 80% to 85% of raw water to the agency’s customers, including Fort Worth and Arlington, according to the water district.
The water district pulls up to 170 million gallons of water a day from Cedar Creek and 150 million gallons from the Richland Chambers Reservoir, which is stored in North Texas reservoirs and eventually dispersed across 70 North Texas cities, according to data from 2022. Pulling from the East Texas reservoirs allows the water district to tap less into other sources such as Lake Bridgeport.
In Fort Worth’s service area, residents and businesses use an average of 216 million gallons of water a day, according to data from 2025.
In order to move forward with its plans, Diode needs to obtain permits or agreements from various entities, including the East Texas utility and the Tarrant-based water district.
Water district staff evaluate raw water requests from customers, including those submitted by data center developers, according to the agency’s website.
The district has received requests from developers to pull raw water from supplies, but no contracts have been issued due to incomplete applications, its website states.
Water district spokesperson Natasha Hill confirmed Diode is one of those applicants with an incomplete application.
However, records show that Diode’s demands would at least double the East Texas utility district’s capacity to meet the facility’s needs.
The rural water utility projected pumping just under 1.5 million gallons of water a day in 2025 to serve about 22,400 residents and commercial users, according to utility records.
Cedar Creek stores over 644,000 acre-feet — or 20 billion gallons — of water.
Email communications from May 2025 stated the water utility did not have the capacity to meet Diode’s water cooling needs. Expanded or upgraded water pump stations would be needed to meet those demands, the records detail.
In December 2025 email communications with the West Cedar Creek utility district, Diode Ventures project development manager Khalid Jbara detailed the project would require between 1 million to 5 million gallons of water per day.
However, Diode’s projected water usage does not mean as much as 5 million gallons of water per day will ultimately be used, a spokesperson said.
In email communications from July 2025 with Diode, utility district general manager Kenneth Malin said board directors would need to know how the district financially benefits from a pipeline that solely transmits raw water to Diode.
“We could all see the benefits if you were going to be using potable treated water, but needing just treated raw water doesn’t seem as appealing,” Malin wrote. “The raw water and supply line would only be used for your development.”
Malin declined the Report’s request for an interview.
Diode’s project comes as residents around Cedar Creek Lake are asked to conserve water as drought is leading to moderate water shortages, according to the area’s utility district.
Compared to last year, water levels at Cedar Creek are down significantly, Tool resident Casey Watson said.
“This year, we’ve got a lot of residents whose boats are dry docked,” Watson said. “The restrictions have not been the same.”
Cook said it’s frustrating for residents to be asked to conserve water while industrial facilities eye the area with major demands for resources.
“The people at Tarrant County should be upset too,” Cook said. “It feels like (data centers) have a priority over the citizens and the taxpayers, and they shouldn’t.”
‘This is really happening’
When Henderson County residents first gained word of the project, they had to go to the Cedar Creek water utility for details, Watson said.
“I wanted to get the (information) out there to everybody so that they knew this is not just a rumor, this is really happening,” Watson said.
Julie Waters, founder of advocacy group Texans United Against Data Centers, said Diode hasn’t disclosed full information about the project.
“That’s the problem,” Waters said. “There is no transparency.”
The Cedar Creek water utility district asked Jbara where the proposed data center would be located when the agency was first approached about the project in April 2025, email communication records show.
Jbara responded that the exact location could not be disclosed due to an “exclusivity agreement,” but more information would be provided if the utility district agreed to enter a mutual nondisclosure agreement. District officials did not acknowledge the request to sign an NDA.
In an email from July 2025, Jbara proposed a meeting with the water utility’s board of directors to explain Diode’s approach, answer questions and clarify “any gaps,” according to the records.
Malin replied that the board was not interested in meeting individually before a scheduled public meeting.
In an email dated July 31, 2025, Jbara said Diode was not looking for any voting decision but to use various workshops to explore the feasibility of the project with the board.
Malin said that same day that a presentation without a vote from board directors is permissible, but it would have to be posted on a public agenda.
“If you have a fear of public knowledge, then we are not the district for you, as we will not break the rules for any development to meet behind closed doors,” Malin said.
The company is in the process of evaluating whether the proposed site in Henderson County is suitable for the project before sharing further details with the public, a Diode spokesperson said.
Diode will provide residents and local officials with opportunities to learn about the project if the company moves forward with the site, the spokesperson said.
Advocates for the lake are working with small agencies, such as the municipal utility district, to ensure Diode meets all regulatory and permitting requirements.
“We try to push and send communication that says, ‘Here’s what you’re required to do,’ making sure that they get the right studies and reports done before accepting any new project like this,” Cook said.
She and other residents hope this slows down Diode’s progress on the data center and would like to see legislation lead to limiting and regulating the tech hubs.
“Hopefully in November when the first set of bills will be filed, there will be a bill that will pertain to industrial use,” including on data centers, Cook said.
Advocates will continue showing up to the Capitol to make their concerns known about data centers. Waters is organizing a trip to Austin on July 27, when the Texas Senate Committee on Finance will discuss data centers and tax exemptions. Outside the Capitol, Waters will host a community-led conference protesting the projects.
“Every county that attends the press conference, I want them to get up and talk about what is happening in their county,” Waters said.
Nicole Lopez is the environment reporter for the Fort Worth Report. Contact her at nicole.lopez@fortworthreport.org.
The Report’s environment coverage is supported by the Marilyn Brachman Hoffman Foundation.
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This article first appeared on Fort Worth Report and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
