Lawmakers consider data center restrictions

The North Carolina House Energy and Public Utilities Committee has voted to advance Senate Bill 730, known as the "Ratepayer Protection Act," which seeks to impose new regulations on data center development across the state. The legislation aims to prevent data centers from transferring energy costs to other consumers, a key concern for Rep. Dean Arp, who views energy policy as a statewide issue impacting all residents.

The bill includes several measures for responsible data center development, such as requiring large facilities to conduct noise studies and empowering local governments to assess impacts on water resources, air quality, agricultural lands, and thermal plumes before granting approvals. Significantly, it mandates that data centers implement closed-loop water systems to minimize water consumption for cooling. Additionally, the bill proposes to eliminate local tax incentives for data centers, though it does not address state-level tax breaks, an issue that both Republican and Democratic lawmakers, including Gov. Josh Stein, agree needs further review.

Rep. Ray Jeffers raised concerns about removing local competitiveness, noting his county's ongoing efforts to finalize a data center deal with Microsoft. The bill also mandates an examination of existing utility policies to ensure energy affordability and prohibits the retirement of baseload power plants until they can be replaced by nuclear resources, a point that sparked discussion regarding its potential impact on coal power plants and carbon emissions. Rep. Pricey Harrison, initially worried about meeting carbon neutrality goals, expressed confidence after committee discussions, noting that data centers like Google and Microsoft are often responsible actors, bringing their own energy capacity.