Aerial view of a data center being constructed. (Stock photo/Getty Images)
South Carolina’s General Assembly should consider pausing any more new data centers in our state until protections are passed to protect ratepayers.
Here’s why. There are currently no protections in state law that would prevent our state’s residential, industrial and commercial ratepayers from having to foot the bill for the additional electricity that will be needed to run these data centers around the clock.
The General Assembly should authorize the South Carolina Public Service Commission to create a separate higher electricity rate class designed to make data centers pay a higher rate for their electricity and water services, as the governing board of state-owned Santee Cooper did last year by approving an “experimental” special electricity rate.
This would protect all other ratepayers from having to subsidize the cost of serving data centers. Data centers should also be required to pay for all transmission upgrades that utilities like Dominion, Duke Power and Santee Cooper will have to make to connect new data centers to the electricity grid.
These new data centers have very limited economic value because they produce few new jobs. For this reason, no state or local government financial incentives should be offered.
Data centers also are a threat to our state’s water resources, our agricultural economy and our environmentally sensitive resources like the ACE Basin and other protected areas in our beautiful state.
Other states have already taken legislative action to protect their ratepayers and their land and water resources from these energy hogs that demand government subsidies at the expense of state and local governments. Many of these data centers will never be built. The ones that are built will be outdated in a few years anyway. Many will be abandoned leaving toxic waste behind that will have to be cleaned up at taxpayers’ expense.
Gov. Ron DeSantis in Florida is pushing for new regulations to protect Florida’s water resources and environmentally sensitive lands. DeSantis has called for data center restrictions and is pushing Florida’s House Bill 1007 to do just that to protect Florida.
Gov. Henry McMaster has been a champion of protecting our precious natural resources. McMaster recently released a study that could serve as a guide for protecting South Carolina’s water resources. That’s a good first step!
But what’s needed now is legislation that prohibits new data centers from hiding behind confidential agreements in their negotiations with state and local governments in our state.
Transparency and accountability should be mandated with so much at stake.
Virginia’s utility commission has recently approved a new rate class for high load users who will be required to pay 85% for transmission costs and distribution and 60% for new generation costs.
In Georgia, bipartisan bills to regulate data centers include proposals to end a tax perk and pause on construction until February 2027.
The state Department of Environmental Services needs to implement regulations governing the noise and air pollution that data centers will bring. These data centers use industrial cooling systems to cool millions of servers which creates a constant low frequency humming noise.
The Department of Natural Resources should be prepared to monitor noise and air pollution to protect our local communities and environment. Many data centers also utilize backup diesel powered generators that emit particulate matter including nitrogen oxide which also poses risks to public health.
Most data centers have a short lifespan of about 10 to 15 years. Since data centers all contain hazardous substances like lead and mercury, they should be required to post a surety bond to cover the costs of environmental cleanup once they become obsolete or file for bankruptcy. Data centers can also create “heat islands” that can adversely affect public health in our local communities.
Time is of the essence. Without legislation and regulatory changes, our state’s residential, small business and industrial ratepayers are going to see much higher electric bills and water bills coming soon.
