Amazon to fully fund recycled water pipeline and storage for Silicon Valley data center

Amazon to fully fund recycled water pipeline and storage for Silicon Valley data centerThe tech giant will finance a new pipeline and a 3-million-gallon storage facility in Gilroy to secure recycled water, highlighting a growing trend of corporate-backed municipal reuse infrastructure in the region.

Amazon will fully fund the design and construction of a recycled water pipeline and 3 million gallons of storage at the South County Regional Wastewater Authority (SCRWA) facility.

Valley Water is also coordinating with Microsoft to supply approximately 400 acre-feet per year of recycled water for a separate data center in San Jose.

Construction began this month on a separate $16 million salt removal facility in Palo Alto that will produce 1 to 2 MGD of purified water by May 2028.

Tech giants are increasingly underwriting municipal water infrastructure in California to secure cooling water for new facilities. During a February 25 meeting of the Santa Clara Valley Water District (Valley Water) Recycled Water Committee, staff confirmed that Amazon will fully fund a major recycled water expansion in the City of Gilroy to serve a planned data center. According to Dave Tucker, a senior water resource specialist at Valley Water, the City of Gilroy conditioned the large data center project on the use of recycled water. To meet this requirement, Amazon will finance and construct all necessary pipeline to reach its facility. The developer will also design and build an additional 3 million gallons of recycled water storage at the South County Regional Wastewater Authority (SCRWA) treatment plant. Gilroy is leading the project, with Valley Water expected to provide design review and inspection assistance. The Amazon agreement reflects a broader regional push to integrate data centers with municipal reuse systems. Kirsten Struve, Assistant Officer for the Water Supply Division, noted that Microsoft is concurrently working with Valley Water and the City of San Jose to secure recycled water for a future data center adjacent to the Silicon Valley Advanced Water Purification Center. Environmental impact reports project the Microsoft facility will use approximately 400 acre-feet per year. This local effort aligns with Microsoft's broader national strategy to make reclaimed water its default cooling supply where feasible, building on similar utility partnerships in states like Washington, Texas, and Arizona to meet a corporate goal of being water positive by 2030. Struve noted that co-locating data centers near wastewater treatment plants is becoming a recognized best practice, supported by local regulations such as the City of Santa Clara's ordinance requiring data centers to use recycled water. Beyond corporate-funded expansions, Valley Water is advancing its own municipal reuse projects. Senior Water Resource Specialist Henry Barrientos announced that construction is beginning this month on a $16 million local salt removal facility at the Palo Alto Regional Water Quality Control Plant. The facility will produce 1 to 2 million gallons per day of purified water, which will be blended with existing tertiary-treated recycled water to reduce total dissolved solids to approximately 600 parts per million. Slated for completion in May 2028, the project has received approximately $5 million from Valley Water to date. The enhanced water quality has already prompted the nearby City of Mountain View to identify at least 50 new customers eager to connect to the recycled water system. Valley Water is also preparing a feasibility study for further South County reuse expansions to position the district for future U.S. Bureau of Reclamation grant funding. Preliminary options range from near-term storage improvements at SCRWA estimated at $10 million, to direct potable reuse and 18-mile pipeline projects for Morgan Hill and Gilroy that are expected to cost upwards of $100 million.