Crystal Clear Special Utility District’s board in San Marcos has hit pause on a proposed water-service agreement for the Palomino Alpha data center, punting the deal back for more study after a packed public hearing. The meeting ran for hours as landowners, utility customers, and project representatives traded arguments over water use, environmental impacts, and long-term community risks. By the time the crowd filtered out, the board had voted to table the agreement and left the proposal with no final action.
Board Shelves Palomino Alpha Water Agreement
The board went into executive session before emerging to vote to table the proposed WNSSA Palomino Alpha LLC agreement on Wednesday, which meant no final decision that night. The agenda item triggered a lengthy public comment period and a spirited debate over whether the district has enough technical information in hand to sign a long-term water contract, according to CBS Austin.
Water Worries Dominate Public Hearing
Speakers filled the boardroom and pressed the district for more study and transparency before committing local water supplies to the project. One resident warned the campus could demand "half a million gallons of water a day," while community member Sam Lyes urged directors to "do your homework, do the studies." Crystal Clear director Jamie Trant cautioned that selling large volumes of potable water to a data center could have downstream effects such as higher electric bills, pollution, and localized heat zones, a risk she said the district itself could ultimately be held responsible for, CBS Austin reported.
Developers Tout Big Campus, Big Money
Project representatives pitched the campus as an economic engine that would bring jobs and tax revenue to nearby school districts. County filings and regional trackers describe Palomino Alpha as a proposed multi-hundred-megawatt campus near Zorn that sits inside a designated reinvestment zone and is covered by a development agreement, with records listing a minimum $400 million capital commitment by the developer. For background on the project footprint and related agreements, see the Central Texas Data Center Tracker and Guadalupe County meeting records.
What Comes Next For Crystal Clear And The Project
Crystal Clear posts board agendas and packet materials on its website, and the district is expected to seek additional technical studies, water-use modeling, and contract safeguards before bringing the item back up for a vote. Palomino Alpha has already filed state permit paperwork, including a TCEQ wastewater application with public-notice materials that reference work near State Highway 123 and FM 1979 near Zorn, which state reviewers will examine as the permitting process moves forward. The combination of county development agreements, state permits, and the utility’s further review will determine whether, and under what conditions, long-term potable water service is ultimately supplied to the campus, with local officials, regulators, and residents all staying in the mix as it plays out.
