‘They’re already here': Regulating data centers stalls in Missouri
Missouri's efforts to regulate hyperscale data centers, particularly their energy consumption, are lagging behind their rapid expansion. Senate Bill 4, enacted last year, aims to make large energy users pay for their own infrastructure costs, but critics argue it has loopholes and could lead to increased reliance on natural gas and costs passed to consumers. Local communities are resorting to moratoriums in the absence of comprehensive state-level regulation.
The rapid growth of hyperscale data centers in Missouri and other states is outpacing legislative efforts to regulate them, leaving local communities to address the issue through moratoriums and divisive elections. Missouri Senate Bill 4, signed into law last year, was intended to protect consumers by requiring large energy users, including data centers, to cover the full costs of their energy use and grid integration. However, advocates and groups like the Missouri Coalition for the Environment argue the bill contains loopholes that could allow smaller data centers to avoid regulation and energy companies to pass costs for new power plant construction onto other utility users through Construction Work In Progress (CWIP) provisions.
Rob Dixon, economic development director for Ameren Missouri, highlighted a dramatic increase in average energy requests, from 3 megawatts in 2019 to 180 megawatts in 2024, demonstrating the growing demand. While the Public Service Commission has approved tariff schedules for Ameren and Evergy, requiring data centers using 100 megawatts or more (or 50 megawatts for smaller utilities) to pay 100% of upfront grid integration costs, concerns persist. Senator Mike Cierpiot, the bill's original sponsor, believes the tariffs offer a good rate for power and should make data centers more acceptable, but the Missouri Coalition for the Environment suggests the law incentivizes companies to build multiple smaller facilities to bypass the large-load provisions. Furthermore, the coalition notes that SB 4 primarily focuses on energy, neglecting environmental impacts such as water and air quality.
The CWIP provisions of SB 4 specifically allow energy companies to charge customers for the construction of new natural gas plants, a move that could increase reliance on fossil fuels. Ameren's Integrated Resource Plan forecasts a significant increase in natural gas generating infrastructure by 2045, reflecting a national trend. Senator Cierpiot views natural gas as a reliable option for Missouri's energy needs, foreseeing nuclear energy as a future solution, while environmental groups warn about the potential for increased emissions from data center energy consumption. As of mid-May, Ameren and Evergy had not submitted annual compliance reports as their tariff schedules were recently approved.