- IVCM’s petition asked the Imperial County judge to overturn IID’s refusal to sell it about 287 million gallons to cool a proposed 330 MW data center.
- The company committed in writing last February that the project would not affect Colorado River water.
- The case revolves around the question of whether water from fallow agricultural land can be reallocated to industry, a precedent that is worth far more than the volume in dispute.
A recent petition filed in Imperial County Superior Court asked a judge to order a utility 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 calculates to be about 0.03 percent of the Imperial Irrigation District’s 3.1 million acre-feet entitlement.
The legal precedent this would set if such a request were to be granted, however, could have far-reaching implications beyond the relatively minimal requirement that Imperial Valley Computer Manufacturing (IVCM) is currently fighting for.
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A prolonged conflict over water, exacerbated by the identity of the customer.
The Imperial Irrigation District, a local agency that supplies water from the Colorado River to the Imperial Valley, declined 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 Business Insiderstating that the project would not increase demand on the Colorado River because 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 filed. The reason given was Regulation 21, which governs small parcel service and prohibits new connections within 300 feet of an accessible drinking water supply; the district redirected IVCM to Imperial City.
With the city of Imperial already engaged in a legal battle with IVCM over the very existence of the $10 billion project, citing insufficient public notice and failure to comply with the California Environmental Quality Act (CEQA), it’s unlikely to be a place where the data center builder can find any relief, and it has turned to the courts to get what it believes is its fair share.
IVCM’s subsequent legal action could be a litmus test for how such interactions might play out in the future, at a time when communities living near these data centers are facing considerable backlash as being resource-intensive and driving up water and electricity prices, particularly in drought-stricken regions.
The developer’s plan to “buy and dry,” according to Michael Cohen, a senior fellow at the Pacific Institute who specializes in Colorado River basin water use, could have actually made the situation worse because it would be seen as detrimental to jobs in the region, even if individual landowners profit from the exercise.
The water suit is one of at least three fronts, and probably the least immediately consequential.
The City of Imperial’s CEQA challenge to the project’s exemption is ongoing. On June 16, 2026, the county placed a 45-day moratorium on data center approvals; on July 14, he extended that term 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 said he would challenge the second. Even a clear victory on the water petition would result in permission to provide a facility that the county currently cannot authorize.
What is in dispute is whether an irrigation district approved to serve farms can legally refuse to serve an industry, and whether fallowing counts as a conservation measure when the county is the buyer but not when a data center is.
One thing is certain: The decision will be read carefully by all developers interested in agricultural water in the West, which is pretty much what the valley is afraid of. The gallons are a rounding error for Colorado, but the precedent it sets here could determine everything for the region.
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