A data center developer looking to pull millions of gallons of water daily from Cedar Creek Lake — one of two reservoirs that supply most of Fort Worth’s water — has announced it is no longer considering the Henderson County site.

Henderson County commissioner Wendy Spivey took to social media Wednesday, where she posted a letter from Diode Ventures.

Sent to Henderson County Judge Wade McKinney and county commissioners, the letter said that the site “does not meet the higher standard we believe should guide data center development.”

The letter acknowledged that Gov. Greg Abbott ordered Texas data centers to be “responsible stewards” of the natural resources, power infrastructure and communities.

“Diode shares that expectation and is committed to meet or exceed state and local standards in our projects,” the company wrote. “The perspectives shared by residents, local leaders and stakeholders led us to conclude that the site under evaluation, in particular its close proximity to the rural residential community of Cedar Creek Lake” doesn’t meet the company’s standard.

According to email communication records obtained by the Fort Worth Report, the company — beginning in April 2025 — consulted with the West Cedar Creek Municipal Utility District about whether the agency could support Diode’s water needs for the facility. Planned for a spot between the small towns of Trinidad and Tool on the west side of Cedar Creek Lake, the data center would have needed up to 5 million gallons of raw water a day, said Khalid Jbara, Diode Ventures project development manager

Records show the water utility pumped just under 1.5 million gallons of treated water a day in 2025 to serve 22,400 residents and commercial users.

The Tarrant Regional Water District, the entity that owns Cedar Creek Lake, pulls up to 170 million gallons of water a day from the reservoir to store in North Texas lakes and disperse across 70 cities.

Diode will explore opportunities to support Texas’ growing infrastructure needs, the company wrote.

The letter said the company supports “responsible data center development,” including water-efficient technologies, closed-loop cooling and air-cooled systems, and engagement with residents.

“Data centers that want to do business in Texas must meet a clear standard,” Abbott said in a July 23 news release. “This project did not.”

In June, Abbott directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas to enforce several standards including:

Requiring data centers to pay for all of their electric infrastructure costs to prevent financial impacts on residents.
Ensuring that data centers build on the basis of the state’s electric capacity, not just its demands.
Requiring all new data centers to use water-efficient technology such as closed-loop cooling systems.

Abbott plans on seeking state law to formally implement these expectations, the news release stated.

“As with all sites we explore, Diode Ventures conducted due diligence on a potential data center development site in Henderson County,” a company spokesperson said. “Diode remains committed to responsible development, ensuring careful assessment of each site and moving forward with only those that align with infrastructure availability, community priorities and long-term project viability.”

For months, Henderson County residents packed public meetings and formed an advocacy group to air their concerns about the company’s potential water usage and lack of transparency regarding the project’s details.

Kenneth Malin, West Cedar Creek Municipal Utility District general manager, told Jbara that the agency would not support the company’s project, after being asked to sign a non-disclosure agreement. Jbara also asked Malin if the utility’s board directors would be willing to meet with the company before a scheduled public meeting.

“We will not break the rules for any development to meet behind closed doors,” Malin said.

Stacey Farmer, who lives next to the lake, said she took a few moments to celebrate Diode’s canceled plans but cautioned there could be other data centers interested in the area.

“It is just one battle that we have won,” Farmer said.

Ashley Cook, an attorney and Henderson County property owner, said the number of data centers interested in developing along waterways is worrying.

“We need to be watchful because there will continue to be projects and data centers, if not in the Henderson, Kaufman County area, certainly in Tarrant County,” Cook said.”

Cook said she and other residents will continue to advocate for the protection and stewardship of Cedar Creek Lake. That involves demanding lawmakers to enact legislation protecting landowners and natural resources throughout the state.

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.

At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.

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