By Esteban Fernandez
For Times West Virginian
Fairmont — The problem with data centers, according to the state Data Economy Office, hasn’t been water, noise, pollution or energy prices.
The problem has been communication.
“I’ll fall on the sword and tell you, when you’re running around and you have 100 top priorities, one of the first things that gets pushed to the side is communications,” Chris Morris, director of the Data Economy Office, said. “What I learned by sitting at a table with the project leaders, some local folks that are very vocal in their opposition of the project and then a bunch of people that honestly didn’t know what to think, as we sat there and talked for a couple hours, I think we all learned a lot. Maybe, a project could benefit the area.”
The House of Delegates discussed data centers during two informal meetings held Monday and Tuesday. On Tuesday, Morris presented legislators with a slideshow that addresses common objections to data center development. One slide cited as myths the notion that data centers would drain the state’s water, are exempt from environmental regulations, raise electric bills and would only generate revenue for the state.
For example, for starters, Morris pointed out that data center technology has evolved to be less water hungry. While it’s true that early generation data centers guzzled water years ago, he said, more up to date facilities use different technology to preserve water. Modern data centers use methods such as air cooling, water recycling and closed loop systems. In West Virginia, that also means using gray water, like the type found in flooded mines, for cooling.
Morris cited one company in particular — Quality Technology Services — when talking about water usage. QTS’ hyperscale facilities on average use 600,000 gallons of water a year. They fill up their chillers with two Olympic sized swimming pools worth of water, and top it off at the end of the year. Their actual usuage is less than five households on average.
“These are smart people, and they’re naturally incentivized to be efficient,” Morris said. “No one wants to pay a high water bill, and no one wants to pay a high electric bill, so if they can find ways through a better use of technology to save on those resources, they financially benefit from that.”
Politico reported on one data center QTS ran in Georgia. The company installed two industrial scale water hookups that fed their data center campus located 20 miles south of downtown Atlanta. One connection was installed without the utility company’s knowledge, and the second was not linked to the company’s account and wasn’t billed. QTS owed nearly $150,000 for using more than 29 million gallons of water, which is the equivalent to 44 Olympic-sized swimming pools.
The company said its water consumption was high due to temporary construction-related activities, such as concrete work, dust control and site preparation.
Del. Kayla Young, D-Kanawha County, asked if the state would only approve closed loop systems moving forward. Morris replied saying they would look at water usage on a case by case basis to ensure the best interest of the state and community.
Young also pushed back against Morris’ assertion that data centers raise electric prices for consumers is a myth. She pointed out that HB 2014 does not mandate large projects will fund their own infrastructure upgrades. She added her understanding that it’s micro-grid districts only, not the data center portion. Morris said any residential rate increase would only be passed if the Public Service Commission approved a rate increase a company applied for.
He said that while the promise to pay for infrastructure upgrades isn’t worked into a contract, one company that is exploring a data center said they would pay for any upgrades associated with the project.
Morris said the state is creating an approval letter for High Impact Data Center designation. While not a contract, the letter awards companies with the ability to do the project, and provides some safeguards against rate increases.
Taxation policy also received attention. Morris showed potential tax levies raised by a $5 billion data center. The Tax Division argues schools would raise around $38.5 billion in that scenario. However, questions around how HB 2014’s tax distribution would be implemented continue.
“We probably need to explore that further to make sure that growth counties aren’t negatively impacted, and possibly even look at eliminating rollback requirements altogether,” Del. Michael Hite, R-92, said. “These aren’t minor details, as you know, has to do with revenue, they’re fundamental policy questions and they’re open to interpretation. These answers to these questions may influence us to make adjustments in other areas of state code that have been affected unintentionally.”
Still, Hite was excited about the prospect of tax revenues from data center development. He said the estimates made by Del. Dan Linville’s tool, R-22, where probably conservative.
“They could be much higher than what comes out on the tool,” he said.
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