Nevada Governor signs executive order setting new rules for state data center development

Nevada Governor Joe Lombardo has issued Executive Order 2026-005, named the "Nevada Standard for Responsible Data Center Development," which introduces new conditions for data centers seeking state tax abatements. The order, effective immediately, requires developers to fully pay the Local School Support Tax and sign a binding Nevada Community Support Commitment before their applications are reviewed by the Board of Economic Development. These measures are intended to safeguard school funding, water supplies, and prevent existing utility customers from bearing the costs of new data center power needs.

The Governor's action comes as state lawmakers are also exploring more extensive regulations. During a recent legislative committee, lawmakers began drafting legislation for the 2027 session that would impose a moratorium on data center development and repeal existing tax breaks. State officials are actively working to address the "data center controversy," particularly concerns about the impact of "hyperscale" data centers on natural resources, electricity grids, and water resources.

The state is expected to provide full details on community support requirements by November 6th and present a plan by December 31st to meet growing power demand through 2036 without increasing costs for current utility customers due to data centers.

The Data Center Coalition, an industry group, responded positively to the executive order, stating it aligns with goals for job creation and natural resource protection. However, they also issued a warning, although the specifics of the warning were not detailed in the transcript.