330 MW data center sues for California farm water

A proposed 330 MW data center in California’s Imperial Valley is asking a court to force the Imperial Irrigation District (IID) to sell it about 287 million gallons of water a year. Imperial Valley Computer Manufacturing (IVCM) says it can offset that demand by stopping irrigation on nearby farmland, but the district rejected the request.

IVCM filed a petition in Imperial County Superior Court seeking to overturn IID’s decision. The requested supply is 880 acre-feet annually, equivalent to roughly 0.03% of IID’s 3.1 million acre-foot Colorado River entitlement. The amount is small by river-basin standards; the legal precedent could be far more significant.

Why IID rejected the data center’s water request

IVCM submitted its application on April 22, 2026, and IID rejected it on May 1. The district cited Regulation 21, which governs small-parcel water service and bars new connections within 300 feet of an accessible potable-water supply. IID directed IVCM to the City of Imperial instead.

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That alternative is complicated. The City of Imperial is already fighting IVCM over the project itself, arguing that it lacked adequate public notice and failed to comply with the California Environmental Quality Act (CEQA). The proposed facility has an estimated value of $10 billion.

Developer Sebastian Rucci told Business Insider that the data center would not increase demand on the Colorado River. Under the plan, IVCM would stop irrigating nearby agricultural land and use the resulting water allocation for the facility—a strategy commonly described as “buy and dry.”

“zero impact”

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The dispute over “buy and dry”

The case turns on whether an irrigation district chartered to serve farms can refuse service to an industrial customer, and whether water made available by fallowing farmland counts as conservation when the buyer is a data center rather than the county or another agricultural user.

Michael Cohen, a senior fellow at the Pacific Institute who focuses on Colorado River Basin water use, described IVCM’s proposal as “buy and dry.” The approach could be viewed as harmful to local employment even if individual landowners profit from selling or transferring their water rights.

That tension has made the customer itself central to the dispute. Communities near data centers have increasingly objected to facilities they see as consuming scarce water and electricity and contributing to higher resource costs, particularly in drought-stricken areas. The IVCM petition could therefore become a test case for how agricultural water is reassigned to large industrial projects.

Water case is one of three legal obstacles

The water petition is only one of at least three disputes surrounding the facility—and may not be the most immediately consequential.

• CEQA challenge: The City of Imperial’s legal challenge to the project’s exemption remains pending.
• County moratorium: Imperial County imposed a 45-day moratorium on data center approvals on June 16, 2026.
• Extended permit freeze: On July 14, 2026, the county extended the moratorium for a full year, blocking permits until June 2027 while an advisory committee rewrites zoning rules.

Rucci called the first moratorium defective and sought a restraining order. He has also said he will challenge the second moratorium. As a result, even a successful water petition would only give IVCM permission to seek supply for a facility the county currently cannot permit.

The immediate water requirement is a rounding error relative to the Colorado River. But a ruling on whether fallowed farmland can support a data center could be closely watched by developers seeking access to agricultural water across the American West.