For decades, municipal wastewater treatment operations focused solely on cleaning the incoming wastewater so that it could be discharged and later reused without posing a risk to human health or the environment. During the treatment process, not much attention was paid to the extraction and recovery of other valuable resources contained in the waste stream, such as energy and nutrients. This dismissal was in line with broader societal attitudes of distaste for anything having to do with wastewater. As a Wisconsin court put it, even the post-treatment cleaned water prompted “revulsion.”[1]

Today, it has become increasingly clear that wastewater is part of a broad nexus of resource inputs and outputs including water, energy, food, and carbon. The failure to harvest the secondary resources from wastewater has been a missed opportunity, because those resources can play a critical role in efforts to develop a sustainable circular economy and reduce waste generation. That realization has prompted some municipalities to pursue projects aimed at more complete utilization of the resources in the wastewater.

In two recent grant-funded projects,[2] the Law School’s Water Law and Policy Initiative examined pathways to overcoming legal and regulatory barriers to these efforts.

Energy

The wastewater treatment process involves significant energy consumption, but today’s water resource recovery facilities (WRRFs) could become net energy generators by extracting energy from the wastewater they clean. Energy costs account for a quarter or more of a typical WRRF’s operating budget. The total annual energy usage for water and wastewater treatment in the United States is approximately 56 billion kilowatt-hours, costing about $4 billion each year, according to the United States Environmental Protection Agency. In some places, the electrical grid is under significant strain, and heavy energy demand for wastewater treatment could further degrade its functionality.

While estimates vary as to the amount of energy contained in wastewater, there is general agreement that it is significant. By some estimates, assuming complete capture and efficiency, a large WRRF could theoretically power thousands of residential customers with electricity produced from anaerobic digestion; however, this “back of the envelope” calculation neglects losses during the energy production and transmission processes, which can be substantial.

When it comes to harnessing this energy, true success stories are still somewhat rare, in part due to an array of barriers. These include financial barriers such as capital and operational costs, regulatory barriers such as uneven implementation of the Public Utility Regulatory Policies Act, a federal law designed to expand opportunities for renewable energy generation by small power producers like WRRFs, market entry barriers, and state-specific issues such as designation (and regulation) as a public utility. Removing these barriers and extracting this untapped source of energy could be a “game changer.” As described in more detail in a forthcoming publication in the LSU Journal of Energy Law and Resources, policymakers should consider streamlining regulatory policies and energy markets to incentivize those developments.

Nutrients

As compared to energy generation, it has been more common for WRRFs to recycle or even sell the solid component generated by the wastewater treatment process, known as “biosolids,” because biosolids are valuable fertilizer due to the nutrients they contain. But a different problem has arisen in this context.

WRRFs and the municipalities that operate them have struggled to quantify and manage the potential for legal liability resulting from emerging contaminants such as per- and polyfluoroalkyl substances (PFAS) that pass through treatment facilities but are not removed by standard treatment practices. PFAS are hazardous to human health, persistent in the environment, and difficult to remove from wastewater, making for an intractable problem, especially when intertwined with potentially valuable byproducts of the wastewater treatment process such as biosolids.

Our interdisciplinary research effort examined the potential liability concerns associated with PFAS residue in biosolids and then identified preliminary strategies for utilities to control the sources of PFAS discharges to wastewater collection systems. The concerns include responsibility for environmental remediation costs under federal and state laws, toxic tort lawsuits brought by plaintiffs alleging injury caused when they came into contact with PFAS contained in biosolids applied to the land, and enforcement actions resulting from noncompliance with state or federal laws and regulations governing biosolids.

Prohibiting the application of biosolids to the land due to trace PFAS contamination may transfer the risk to groundwater (if the biosolids are impounded in a landfill), strain the assimilative capacity of the environment, and impose financial burdens on municipalities and other operators of public wastewater treatment systems. The only solutions are development of affordable and effective PFAS removal techniques, or source control to keep PFAS out of the waste stream. Wastewater utilities should be very diligent about understanding the sources of wastewater to their operations, the potential risks to human health and the environment, and the legal risks involved. The resulting paper will appear in the Natural Resources Journal published by the University of New Mexico School of Law.

I presented these research results at a recent Law School event held in conjunction with Chicago Water Week presented by Current. A recording of that program is available here.

[1] Stearns v. State Committee on Water Pollution, 274 Wis. 101, 109-10 (1956).

[2] Both projects were funded by the National Science Foundation I/UCRC for Water Equipment and Policy.

Water and energy governance regimes are under increasing pressure to manage heavy new demands from “data centers,” large physical warehouses that contain computer servers, data storage equipment, and related digital infrastructure. Data centers support a variety of evolving digital technologies upon which our society increasingly depends, from artificial intelligence to large-scale video streaming. They can be significant tools for economic development but also draw heavily on local water systems and electrical grids, straining resources and resulting in community opposition. On April 8, the Marquette Water Law and Policy Initiative (affiliated with the Law School’s broader Lubar Center for Public Policy Research and Civic Education) hosted a panel event to explore these challenges.

The issues are significant for Wisconsin, which is becoming a magnet for data centers given its plentiful water resources, stable electrical grid, and comparatively low land costs. The state already hosts over 40 data centers, and more have been proposed. Balancing the economic development potential with the environmental and energy drawbacks will not be easy. The February 2026 edition of the Marquette Law School Poll featured several questions about data centers. The results showed that 70% of Wisconsinites now believe that the costs of data centers outweigh the benefits, with water and energy use frequently cited as top concerns.

The event participants first noted the vast scale of energy and water use by data centers. Co-moderator Art Harrington pointed out that data centers already use roughly 4 to 5% of the total energy generated in the United States, with that share expected to double or more in the coming years. Wisconsin’s data centers will require continuous power at levels comparable to that required to support hundreds of thousands of homes.

Meanwhile, the implications are also significant for water resources in the state. Data centers require a great deal of water to cool the sensitive electrical components housed within. Some are estimated to use a whopping one to five million gallons of water per day, equivalent to the water demand of a town of about 50,000 people. Panelist Cheryl Nenn, of Milwaukee Riverkeeper, said that the proposed Microsoft data center in Mount Pleasant, Wisconsin (billed by the company as “the world’s most powerful AI data center”) is expected to contain about 60 miles of pipeline to circulate cooling water.

Nenn pointed out that the Great Lakes are essentially a “one-time gift from the glaciers” with less than 1% of their total water volume annually renewable via precipitation. If data centers consume more than that renewable amount, the volume of water in the Lakes would start to decline, she predicted. A related consequence: Nenn expects local water rates to rise by 50-70% or more as municipalities upgrade their treatment systems.

A further complication is that it’s difficult to be sure how much water a data center will use. Two factors contribute to a lack of transparency, Nenn said. First, most data centers draw water by connecting to local public water systems rather than through direct withdrawals from surface or groundwater resources and therefore do not have to report their usage to the state. Second, much of the water use is “indirect,” meaning that the water use happens as part of the process of generating energy to supply the center and its cooling system. Nenn’s group had to sue the City of Racine to obtain information about the Microsoft facility’s projected water use.

Turning back to energy, the panel noted that electric utilities are already planning major new investments in generating capacity to support the expected demand and are also proposing new rate structures to sort out who pays for the projects. “Energy infrastructure is built for decades,” Harrington pointed out. Panelist Tom Content observed that $2 billion worth of new power plants have recently been approved in the state, andclose to $6 billion worth of additional projects have been proposed. Much of the new capacity will accommodate data center demand. Content predicted that the projects would eventually double the state’s historical system capacity.  

Content is the executive director of the Citizens Utility Board of Wisconsin, a nonprofit, nonpartisan entity tasked with representing the interests of Wisconsin citizens and small businesses. Many of his comments focused on consumer protection measures centered on protecting ratepayers from costs incurred to satisfy demand at data centers. He warned that electricity demand associated with data centers could change very quickly. If the demand doesn’t materialize at expected levels due to shifting market conditions or rapidly evolving technological change, Content explained, the state’s ratepayers could be left with stranded assets and a heavy financial burden for decades to come. Content said he favors a “show me the money” approach with explicit financial guarantees from data center operators to pay for the energy generation projects even if they are never built or close early.

Kate Phillips, senior corporate counsel for WEC Energy Group, responded that the utility had built transparent safeguards for consumers into the proposals it has sent to the Wisconsin Public Service Commission for approval. Phillips said the “core principle” of the utility’s philosophy was that “very large customers” (VLCs) with demand exceeding 500 MW, such as data centers, would pay for the generation, distribution, and transmission costs for their facilities. The utility does not expect residential customers to pick up those costs, she said. With respect to “stranded assets” specifically, Phillips said that if a VLC terminates operations early, it will be obligated to pay for the net book value of assets devoted to supplying it with energy.

Near the end of the conversation, the panelists turned to whether governments have effectively managed the data center boom. They have not, said Nenn: she believes that regulators have been caught “flat footed” when it comes to concerns over water and energy use at data centers. Conversely, they have provided significant financial incentives and support to data centers, she added.

State legislatures around the country are grappling with these issues, the panelists said, considering everything from moratoria to increased transparency. The Wisconsin legislature considered several bills in its most recent session but enacted none. For comparison, Nenn cited the recent Wisconsin compromise on PFAS remediation and funding, another complex problem which took the Legislature several years to resolve.

Effectively managing the growth of data centers will require equitable allocation of infrastructure costs, greater transparency surrounding resource use, community involvement in siting decisions, and regional coordination to address cumulative effects. The stakes are high, because decisions made today about data centers will shape Wisconsin communities for decades to come.

A video recording of the full program is available here.