Lombardo order forces data center developers to fund Nevada schools and protect water and grid resources
Nevada Governor Joe Lombardo signed an executive order establishing new requirements for data center developers, mandating full payment of the Local School Support Tax and protections for water and energy resources. This order aims to address concerns about data centers' impact on public schools, the electrical grid, and water supplies. The issue has become a central point in Lombardo's reelection campaign, with legislative efforts also underway to reevaluate tax breaks and potentially pause new data center construction statewide.
Nevada Governor Joe Lombardo issued an executive order establishing the "Nevada Standard for Responsible Data Center Development," which mandates new requirements for data center developers. The order compels developers seeking partial tax abatements to fully pay the Local School Support Tax, sign a binding "Community Support Commitment," meet local water standards, cover their own project-related costs without passing them to ratepayers, and avoid straining the electrical grid.
The Governor's Office of Economic Development (GOED) executive director is tasked with developing the commitment framework in consultation with various state and local entities. Additionally, the order directs the state to create a "Responsible Speed to Power Plan" to identify facilities needed for large-load demand through 2036, ensuring costs are not borne by ratepayers. Lombardo stated the order will restore funding to public schools and protect state resources, countering previous tax abatement legislation that lacked such protections.
Data centers have emerged as a significant issue in Lombardo's reelection campaign against Democratic Attorney General Aaron Ford. While Lombardo frames data centers as crucial for Nevada's economic future, Ford has advocated for pausing tax abatements and requiring developers to bear water and electricity costs, aligning with elements of Lombardo's order. The debate extends to the Legislature, where the Joint Interim Standing Committee on Revenue voted to draft a bill, sponsored by Sen. Dina Neal, to end data center tax breaks and impose a statewide construction pause. The controversy also highlights a $1 million donation from Jessica Roy, wife of Switch founder Rob Roy, to a Lombardo-aligned PAC.