Nevada Governor Joe Lombardo signed an executive order requiring data center developers seeking state tax breaks to cover associated power costs and meet new standards on water use and grid reliability. The move aims to address growing voter concerns about the impact of data centers on utility bills and resources, while President Donald Trump has defended the facilities.
The growing public and political backlash against data centers, driven by concerns over energy consumption and resource strain, is forcing state and national politicians to balance economic development with local community demands, potentially impacting future infrastructure investment and AI development timelines.
Nevada Governor Joe Lombardo has signed an executive order aimed at addressing growing public concern over the impact of data centers on energy costs and resources. The order mandates that companies seeking state tax incentives for data center projects must cover the associated power costs, protect existing customers from higher utility bills, and adhere to new standards for water usage and grid reliability. The state reserves the right to suspend or reclaim tax breaks if companies fail to meet these commitments.
This policy aligns with recommendations from Republican pollster Tony Fabrizio, who advised the party to support data center development only if companies bear their own costs and safeguard local resources. Polling indicates a significant shift in public opinion, with a July POLITICO poll showing 41% of Americans opposing data centers near their homes, up from 28% in January, while support dropped from 37% to 24% in the same period. Even Trump voters have shown increased wariness.
President Donald Trump has publicly defended data centers, calling resistance to them a "mistake" and arguing that slowing AI development would benefit China. However, a senior White House official stated the president takes a state-by-state approach, acknowledging concerns while viewing data centers as potentially positive. Democratic figures, like Representative Steven Horsford, have criticized Lombardo's order as insufficient.
The Data Center Coalition expressed some concerns about the executive order potentially creating hurdles but shared the governor's commitment to job creation and resource protection. The order also directs Nevada energy officials to develop a plan by year-end to accelerate the power infrastructure needed for new electricity loads through 2036.