NC bill proposes data center regulations, would keep local governments from offering incentives
North Carolina House Republicans have introduced a bill to regulate large data centers, requiring closed-loop cooling and noise assessments while banning local incentives. The legislation aims to protect ratepayers from rising electricity costs and ensure data centers cover their own energy expenses. The bill passed the House Energy and Public Utilities Committee and is now headed to the House Rules Committee.
North Carolina House Republicans have introduced Senate Bill 730, proposing new regulations for data centers consuming at least 100 megawatts of power. The legislation, which passed the House Energy and Public Utilities Committee, aims to protect electricity ratepayers, conserve water, and mitigate environmental impacts.
Key provisions of the bill include mandating closed-loop cooling systems to reduce water consumption, requiring site assessments for noise impact on surrounding communities, and prohibiting local governments from offering subsidies to data center developers. Additionally, it stipulates that utility contracts with these facilities must be at least 15 years long and designed to ensure data centers bear all electricity supply costs, with provisions to protect ratepayers in case of contract termination or default. Utilities like Duke Energy would also be required to file these contracts with the N.C. Utilities Commission and N.C. Public Staff, though they could be designated as confidential.
Rep. Dean Arp, R-Union, a proponent of the bill, stated it is a proactive measure to prevent data centers from driving up electricity rates. Rep. Matthew Winslow, R-Franklin, echoed this, emphasizing that the bill prioritizes ratepayers by requiring data centers to pay their own way and protecting water resources. Rep. Pricey Harrison, D-Guilford, praised the bill's thoughtful approach to data center regulation. The bill also directs a study to evaluate the impact of North Carolina's 2050 net-zero carbon emissions goal on electricity bills, though Harrison expressed concerns about any actions that might deviate from climate goals.
The proposed ban on local incentives has drawn concern, with Rep. Ray Jeffers, R-Person, noting it could hinder projects like Microsoft's planned data center in his home county. This state-level effort aligns with a broader push to roll back state tax exemptions for data centers, with Governor Josh Stein, Speaker Destin Hall, and Senate leader Phil Berger all indicating support for re-evaluating incentives that they believe are no longer necessary to attract development.