Quick Answer
Most water utilities bill sewer on every gallon that passes through the incoming water meter. An evaporative-cooled data center, though, sends most of that water into the atmosphere, not down the drain. An evaporation credit, also called a sewer credit or deduct meter adjustment, corrects the mismatch: you submeter cooling tower makeup and blowdown, document the difference as evaporation, and the utility removes that volume from your sewer bill. The dollars are significant. A facility purchasing 30 million gallons of makeup water per year at 4 cycles of concentration evaporates 22.5 million gallons; at a sewer rate of $8 per 1,000 gallons, that is $180,000 per year in recoverable sewer overpayments. Utilities in cities such as Austin and Seattle operate formal programs for exactly this adjustment.
How Sewer Billing Actually Works
Almost no commercial property has a meter on its sewer line. Utilities instead estimate sewer charges from the metered water coming in, on the assumption that everything entering the building eventually leaves through the sanitary sewer. EPA’s WaterSense at Work guidance on metering and submetering (2023) describes this billing model directly, and notes that some wastewater utilities offer a sewer credit or deduction for water that never enters the sewer system.
That assumption holds up for an office tower. It fails for a data center that rejects heat through cooling towers, because sending water into the air is the entire point of a cooling tower. If the billing mechanics are new to you, our plain-English guide to sewer credits covers the basics.
The stakes scale with consumption. According to Lawrence Berkeley National Laboratory’s 2024 United States Data Center Energy Usage Report, US data centers directly consumed about 66 billion liters of water (roughly 17 billion gallons) in 2023, with hyperscale and colocation facilities accounting for 84% of that total. For the full picture of where that water goes, start with our pillar guide to how much water a data center uses.
Why Evaporative-Cooled Data Centers Systematically Overpay
Water leaves a cooling tower 4 ways: evaporation, blowdown, drift, and leaks, as EPA’s WaterSense at Work cooling tower guidance lays out. Evaporation carries heat out of the system. Blowdown is water deliberately drained to the sewer to control the dissolved minerals that evaporation leaves behind. Drift (fine mist carried out of the tower) and leaks are small by comparison.
The split between evaporation and blowdown is set by cycles of concentration: the ratio of makeup water (water added to the tower) to blowdown water. The Department of Energy’s Federal Energy Management Program cooling tower guidance notes that many systems operate at 2 to 4 cycles of concentration, while 6 or more may be possible. At 4 cycles, only 1 gallon in every 4 reaches the sewer. The other 3 evaporate.
Your sewer bill charges for all 4. On many commercial accounts the sewer portion is half or more of the combined water and sewer total, so paying sewer rates on 100% of intake when 75% evaporates is not a rounding error. It is a structural overpayment that repeats every billing cycle until someone corrects it.
How Evaporation Credits Work
An evaporation credit is a billing adjustment that removes documented evaporation from your sewer volume. The approval path looks similar at most utilities, and our full explainer on evaporation credits walks through the general version. Here is how it applies to a data center.
1. Submeter makeup and blowdown
Install utility-approved submeters on the cooling tower makeup line and the blowdown line. Evaporation is then calculated, not guessed: makeup minus blowdown equals evaporation, following the cooling tower water balance in EPA’s guidance, with drift and leaks treated as negligible in a tight system. DOE’s FEMP recommends flow meters on both lines as a baseline management practice even before credits enter the picture. For meter selection, accuracy standards, and placement details, see our practical guide to data center water submetering.
2. Document to the utility’s specification
Utilities approve credits on evidence, not estimates. Austin Water’s Cooling Tower and Evaporative Loss program shows how specific the requirements can get: new cooling towers must be registered before they begin operating, submeters must come from an approved meter list and pass calibration testing by an authorized company, and an annual inspection form completed by an independent, Texas-licensed mechanical or chemical engineer (or a TDLR Class A license holder) is due every March 1.
3. Utility review, then ongoing compliance
Seattle Public Utilities’ sewer submeter program requires cooling towers to carry 2 meters: a deductible meter on the water supplied to the tower and a chargeable meter on the drain line that actually discharges to the sewer. The utility reads both and subtracts the deductible consumption from sewer charges.
In RPM’s experience, approval timelines run from weeks to a few months depending on the utility. Some apply credits prospectively only, while others allow limited retroactive adjustment, so filing sooner protects more dollars. Expect ongoing obligations either way: annual revalidation, updated calibration certificates, and continuous meter records keep the credit alive. RPM manages that full lifecycle through our evaporation credit service.
The Math: What a Data Center Could Recover
Here is a worked example with every assumption stated, so you can check the arithmetic and substitute your own numbers.
- Makeup water: 30,000,000 gallons per year, about 82,000 gallons per day, a realistic volume for a mid-size facility on water-cooled chillers.
- Cycles of concentration: 4, so blowdown = makeup ÷ 4 (EPA’s guidance puts cycles approximately equal to makeup volume divided by blowdown volume).
- Drift and leaks: treated as 0 for the illustration.
- Sewer rate: $8 per 1,000 gallons. Rates vary widely by city, so use your utility’s current schedule.
The calculation takes 3 steps:
- Blowdown = 30,000,000 ÷ 4 = 7,500,000 gallons.
- Evaporation = 30,000,000 − 7,500,000 = 22,500,000 gallons.
- Credit = 22,500,000 ÷ 1,000 × $8 = $180,000 per year.
The same arithmetic at other scales:
| Facility | Makeup (gal/year) | Blowdown at 4 cycles | Evaporation | Annual credit at $8/1,000 gal |
|---|---|---|---|---|
| Small colocation site | 5,000,000 | 1,250,000 | 3,750,000 | $30,000 |
| Mid-size data center | 30,000,000 | 7,500,000 | 22,500,000 | $180,000 |
| Large campus | 150,000,000 | 37,500,000 | 112,500,000 | $900,000 |
Two variables move these numbers most. A higher sewer rate raises the credit proportionally. Higher cycles of concentration raise it too: at 6 cycles, the mid-size facility’s blowdown falls to 5,000,000 gallons, documented evaporation rises to 25,000,000 gallons, and the credit grows to $200,000 at the same rate. Our explainer on cycles of concentration covers how far you can push cycles before water chemistry pushes back.
Does Your Data Center Qualify? A Checklist
You are a strong candidate if you can answer yes to most of these:
- You reject heat evaporatively: cooling towers, evaporative condensers, or adiabatic assist on dry coolers.
- Your sewer charge is calculated from incoming metered water. Check the rate schedule printed on your bill.
- Your utility offers a sewer adjustment, deduct meter, or evaporative loss program, or accepts case-by-case applications. EPA’s guidance advises facilities to contact their local utility directly to find out.
- Your makeup and blowdown lines are physically accessible for meter installation.
- You can maintain calibration records and periodic reporting, or hire someone who will.
- You have 12 months of water and sewer bills to establish a baseline.
Why Utilities Accept Evaporation Credits
Sewer rates exist to recover the cost of conveying and treating wastewater. Water that evaporates from a tower never arrives at the treatment plant, so it creates no treatment cost. Charging for it anyway is inaccurate billing, and utilities know it. That is why Austin codified its program as a formal wastewater billing adjustment for evaporative cooling towers and Seattle built a standing submeter program on the same principle.
The condition utilities set is rigor. Approved meters, calibration certificates, licensed inspections, and consistent reporting protect the utility from inflated claims, and that documentation is exactly the work RPM performs. We work with nearly 200 utilities across 36 states.
Ready to Find Out What You Could Save?
Data centers with evaporative cooling often pay sewer charges on millions of gallons that never reach the sewer. RPM handles the metering, documentation, and utility submissions from first assessment through approved credit.
Request your free assessment today and find out how much you could recover.
The Bottom Line
Evaporation credits are not a loophole. They align your sewer bill with what your facility actually discharges, and for evaporative-cooled data centers the correction routinely reaches 6 figures per year. As water and sewer rates climb and data center water use draws more public scrutiny, metered, documented billing accuracy is becoming standard practice for well-run facilities.
