- IVCM’s petition asked an Imperial County judge to overturn IID’s refusal to sell it approximately 287 million gallons to cool a proposed 330 MW data center.
- The company promised in writing in February that the project would not touch the water of the Colorado River.
- The case turns on whether water from fallow agricultural land can be reallocated to industry, a precedent worth far more than the volume in dispute.
A recent petition filed in Imperial County Superior Court asked a judge to order a utility company to begin selling water to the state of California’s largest data center project.
The volume in question is modest by Colorado River standards: 880 acre-feet per year, which the petition itself estimates at ~0.03 percent of the Imperial Irrigation District’s 3.1 million acre-foot entitlement.
However, the legal precedent that would be set if such a motion were granted could have far-reaching implications beyond the relatively minuscule requirement that Imperial Valley Computer Manufacturing (IVCM) is currently seeking.
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A protracted dispute over water that is exacerbated by who is the customer.
The Imperial Irrigation District, a local agency that supplies Colorado River water in the Imperial Valley, rejected IVCM’s request to provide approximately 287 million gallons of water for its upcoming 330 MW data center, the largest in the state.
The developer, Sebastian Rucci, spoke with Insider business informationstating that the project would not increase demands on the Colorado River as it would effectively stop irrigating nearby farmland to balance its consumption, calling it a “zero impact” situation.
The IID rejected the application on May 1, 2026, nine days after it was submitted. The stated reason was Regulation 21, which governs small packet service and prohibits new connections within 300 feet of an accessible drinking water supply; the district redirected IVCM to the City of Imperial.
With the city of Imperial already locked in a legal battle with IVCM over the very existence of the $10 billion project, citing inadequate public notification and lack of compliance with the California Environmental Quality Act (CEQA), it is unlikely to be a place where the data center builder will find any relief, and it has turned to the courts to get what it believes is its due.
The subsequent legal action by the IVCM could be a litmus test for how such interactions could play out in the future, at a time when there is considerable pushback from communities living near such data centers who see them as greedy for resources and driving up water and energy prices, especially in drought-affected regions.
The developer’s “buy and dry” plan, according to Michael Cohen, a senior fellow at the Pacific Institute who focuses on Colorado River Basin water use, may have actually made things worse, being seen as detrimental to jobs in the area even as individual landowners benefit from the exercise.
The wetsuit is one of at least three fronts, and possibly the one with the least immediate consequences.
The City of Imperial’s CEQA challenge to the project’s exemption is pending. On June 16, 2026, the county imposed a 45-day moratorium on data center approvals; on July 14 it extended it to a full year, blocking permits until June 2027 while an advisory committee rewrites zoning rules.
Rucci called the first moratorium flawed and sought a restraining order against it, and has said he will challenge the second. Even a clean victory on the water petition would result in a supply permit for a facility the county currently cannot allow.
At issue is whether an irrigation district licensed to serve farms can legally refuse to serve an industry, and whether fallow counts as conservation when the county is the buyer but not when a data center is the buyer.
One thing is certain: the ruling will be read carefully by all developers considering Western agricultural water, which is more or less what the valley fears. Chevrons are a rounding error in Colorado, but the precedent it sets here may determine everything for the region.
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