There are several ways to look at Wednesday’s legislative discussion of the future of data center development in Nevada, the nation’s driest state.
The easiest way is to focus on the growing challenge of managing the problem of water and electricity supply related to the expansion of the data center across the country – and into the hills. History is not on the citizen’s side. In Nevada, when the powerful need more power – and in this case, water – they often find a way to get it.
But succumbing to dystopian despair and dead-end scenarios isn’t much fun. It also makes for a very short column. And, therefore, we return to the March 25 meeting.
Those who attended or watched the flow unfold, as I did, had a long but informative and somewhat polite series at the Joint Standing Committee on Natural Resources. Water and energy experts and stakeholders from industry and the community were in attendance, some bringing interesting charts and graphs.
It was a day of many questions, full of statistics, guesses, predictions, best guesses and other unanswered questions.
Nevada’s water shortage poses a particular challenge, but the Legislature is not alone as it struggles to control the issue. This year, more than 300 bills related to the data center are pending nationwide. At least nine states have introduced data center moratorium bills. I learned that there is a shift from incentives-oriented priorities — which Nevada lawmakers and state lobbyists have long been such scoffers at — to a regulatory model.
Setting special rates and increasing demand for developers to reduce building costs is being considered in many areas. In Nevada, with its big investments in renewable energy grids suddenly out of favor during the Trump administration, a pay-as-you-go system called the Clean Transition Tariff offers hope for a future free of diesel fumes.
The Nevada Public Utilities Commission is working with various stakeholders, including the Sierra Club Toiyabe Chapter, on a comprehensive plan to coordinate regulatory and security standards that are already in use in other areas of the state, areas that are likely to have more water for data centers than Nevada. Sierra Club Toiyabe Chapter Executive Director Olivia Tanager told a reporter, “Nevada is unfortunately lagging behind in regulating this industry. It has effects on our water, our air quality and your utility bill, so we want to make sure people are protected as the AI (artificial intelligence) boom continues and data centers continue to come here.”
Although the main players from NV Energy, the Desert Research Institute (DRI) and the Southern Nevada Water Authority commanded great attention during the meeting, they did not give clear answers to difficult questions, especially those that call for forecasts from one season to another.
Sean McKenna, executive director of DRI’s Division of Hydrologic Sciences, reminded the director with a little snow in Nevada on his mind that, “I think the one thing I can point out here is that all the data centers are local, right? So, where the water is being found, where the electricity is coming from… it all depends.
The pace of development is moving fast, and lawmakers are scrambling. The meeting was not without skeptics. I was reminded why Assm. Howard Watts (D-Las Vegas) is considered one of the most intelligent and educated people in the Legislature. He asked good questions in a long and focused meeting.
A group of 10 local electric utilities represented by the Nevada Rural Electric Association (NREA) were also present. Its recommendations offered a reminder of the opportunity to provide clarity and independence in this matter. Some of the association’s members have already rejected requests from data center developers. For the small community of Nevada, it is clear that the potential rewards of economic development outweigh the risks of potential energy and water infrastructure.
“One thing this shows is that it’s always changing,” said NREA Executive Director Lisa Levine. “Every year the forecast increases a lot. So, it’s really hard to say now what the forecast for energy demand will be in the future.”
Data center energy consumption is described as similar to large mining operations and other intensive manufacturing industries, but it is a shallow comparison. Job creation after construction is the name.
“Of course, data centers are a local issue, but the problems are global,” Levine said. “We’re seeing that from the supply chain issues, the manufacturing, allowing the costs that are already there now, the labor shortage in rural areas, which I’m sure you all are very familiar with.”
Add to that the issues of the country, property tax questions, infrastructure and social security challenges, and it should remind us all that rushing to the future of the spread of the information center in the driest country makes sense.
As newcomers and longtime residents alike know, that doesn’t mean it can’t happen.
John L. Smith is a long-time writer and author. He was born in Henderson and his family roots in Nevada go back to 1881. His stories appeared in New Lines, Time, Reader’s Digest, Rolling Stone, The Daily Beast, Reuters and Desert Friend, among others.
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