Amarillo advances 2.5M-gallon water deal with Fermi America after marathon public hearing

The Amarillo City Council voted 5–0 on Oct. 14 to approve on first reading a proposed 20‑year water supply agreement that would allow Fermi America to receive up to 2.5 million gallons per day (MGD) from the city’s system while Fermi pays for wells, pipelines and required improvements.

Supporters called the project a generational economic opportunity; opponents warned it could hasten decline of the Ogallala Aquifer and sideline local oversight. Nearly two hours of public comment before the vote drew dozens of Amarillo and Panhandle residents who pressed the council for more public review and clearer limits.

Why it matters: Fermi’s Project Matador would combine large-scale power generation and data-center capacity next to the Pantex site and Texas Tech property. The city’s decision to sell potable water is consequential because regional groundwater is already under long-term drawdown; residents repeatedly asked whether the city would be trading a scarce public resource for private gain.

What the agreement does: Under the draft contract the council advanced, Fermi will fund and build the public improvements necessary for delivery — including drilling new wells in the Carson/ Potter well field, transmission lines and on‑site backup generation — then dedicate the assets to the city when complete. The initial delivery limit is 2.5 MGD; the contract includes pricing at two times the city’s inside‑city water rate and a 20‑year term with two 10‑year renewal options. Staff said they will return with clarified termination language before the final vote.

Community objections and expert testimony: Dozens of residents described worries about water, air pollution, property values and a lack of notice. “This nuclear power plant offers no public benefit,” Ashlyn Major, an Amarillo parent, told the council, adding that heavy construction had already begun near neighbors without prior community meetings.

Ken Rainwater, a Texas Tech groundwater hydrologist who advised council, told the chamber the Ogallala is not uniform across the Panhandle and that drawdown effects depend on local saturated thickness, transmissivity and well‑field design. Rainwater said models can estimate local impacts and that groundwater districts impose pumpage rules; he estimated that a multi‑well wellfield could affect an area measured in a handful of square miles depending on configuration.

Fermi’s pitch and commitments: Toby Nagelbauer, Fermi’s chief executive, framed the campus as a national strategic investment in energy and artificial‑intelligence capacity and emphasized large private capital on board. He told council that if Amarillo does not provide water, the company could source it elsewhere and the broader regional aquifer would still be used — while Amarillo would lose the economic return and local controls. Nagelbauer said Fermi would pay for infrastructure, offer monitoring and philanthropy, and work with Texas Tech on a royalty and education partnership.

Technical response on water and cooling: Fermi’s team and nuclear engineers described cooling strategies that rely primarily on air‑cooled condensers or hybrid cooling rather than large once‑through water systems, arguing modern designs greatly reduce consumptive use compared with older reactor approaches. The company also described pursuing alternative non‑potable sources, including treated effluent and brackish sources, and pledged to install monitoring, meter points and on‑site storage.

What’s next: Council voted to advance the agreement as presented and directed staff to finalize open items — including termination language — for a second reading on Oct. 28. Fermi and staff said they expect to return with a proposal for additional capacity (the council discussed a later 5.5 MGD ask) within months. The vote is a preliminary step; final contract approval and any later expansions will require additional council action.

By the numbers: 2.5 MGD initial city delivery requested; Fermi cites potential future campus demand as high as 27.5 MGD at full buildout across multiple phases, though the company emphasized phase‑by‑phase deployment and use of non‑potable sources where feasible.

Council and staff framed the decision as a measured first step. “We are not in the business of selling the future of your grandchildren; we are stewards,” the mayor said in closing remarks, asking staff to ensure rigorous monitoring and public reporting if the agreement is finalized.

Sources: City council meeting presentations and public testimony on Oct. 14, 2025; testimony and modeling comments by Ken Rainwater, Texas Tech; statements by Toby Nagelbauer of Fermi America. The council will revisit the contract on Oct. 28 for a final vote.