Inside the Heated AI Data Center Debate

**Molly Glick** (0:00)
Is it the right time to be slowing data center growth? On July 14th, New York State enacted the country's first data center ban.

**Carrie Klein** (0:06)
All of this is happening as rate payers face high prices everywhere, and data centers are directly tied to those high energy bills.

**Molly Glick** (0:13)
Should moratoriums happen at all? Who benefits and who loses out?

**Carrie Klein** (0:17)
Moratoriums are one really clear way to add more protections, or at least give states the time to pass more stringent data center policies.

**Molly Glick** (0:24)
Some critics are arguing that stopping data centers in their tracks right now is a huge mistake.

**Carrie Klein** (0:29)
What do you think will happen next? Will more states or even the federal government enact a ban?

**Molly Glick** (0:39)
Are data center bans a mistake or are they exactly the kind of pause that the US grid and communities need? Today, we're digging into a controversial topic that's probably dominating your LinkedIn feed, data center bans. On July 14th, New York State enacted the country's first data center ban, and the reactions were all over the map, just like, well, data centers. During this temporary ban, which halts construction of data centers over 50 megawatts for up to a year, Governor Hockel is directing state officials to develop environmental standards for future data centers. And it's not just New York getting out on the action. As of July 1st, there were 15 states considering banning data centers. So some critics, like tech industry groups and construction unions, say that New York's ban went too far.
But others, like consumer advocates, say it didn't go far enough.
So clearly, not everyone is aligned. And where does that leave us for future state or even federal bans? I'm Molly Glick with the Power Perspectives Podcast, and today I'm joined by Carrie Klein. Hey Carrie, how's it going?

**Carrie Klein** (1:41)
It's going well. I'm excited to talk about data centers.

**Molly Glick** (1:44)
Awesome. So why don't we just dive right in?
First, let's start with a major sticking point that people are really butting heads over right now. Is it the right time to be slowing data center growth?

**Carrie Klein** (1:55)
It's a great question.
So all of this is happening as rate payers face high energy bills, high gas prices, and really high prices everywhere.
And data centers are directly tied to those high energy bills. Plus, they're taking up local resources like water and polluting local air. So the benefits of data centers to customers are not really clear. Until now, data centers have pretty much been growing unchecked and actually incentivized. 38 states have some kind of tax breaks for these facilities. People are upset and some lawmakers are starting to reverse course.

**Molly Glick** (2:29)
And as for the flip side, some critics are arguing that stopping data centers in their tracks right now is a huge mistake. They claim that they could halt innovation like the development of life-saving drugs or just things we rely on every day like credit card payment or streaming. So let's zoom out and think about the long game.
Should moratoriums happen at all? Who benefits and who loses out?

**Carrie Klein** (2:51)
So the worry about building out data centers is if they require all this new power, who is going to pay for it? Without proper protections, residents could be on the hook for those costs, on top of the bills they're already paying to keep the lights on and the AC on. So moratoriums are one really clear way to add more protections, or at least give states the time to pass more stringent data center policies.

**Molly Glick** (3:14)
So Carrie, to push back here, some people say that these bans, critics including President Trump, think they'll cost investments, tax revenues and jobs, taking all those benefits from states.
There's also developers who have already invested millions, if not billions in these facilities. But I was wondering, what is the impact on a regular resident of these communities when a data center moves in? Here's what a study out of Georgia Tech found. When a data center opens, a county's employment rate increases on average by roughly 3.5 percent. Wages go up 5 percent. Business establishments increase by nearly 5 percent, and household income goes up by around 2 percent. And as Georgia Tech notes, metropolitan areas capture most of the economic benefits from data centers. But there's a lot less of these for rural areas.

**Carrie Klein** (4:02)
Yeah, it's super interesting to see where these benefits actually roll out, especially around jobs and wages. So if data center bans don't pan out in more states, what's a good alternative that would address some of the concerns that we've talked about?