NC bill would require data centers to pay for grid upgrades

RALEIGH, N.C. (WTVD) -- North Carolina lawmakers are moving forward with legislation that would place new requirements on future data centers, including mandates on who pays for power infrastructure and how much water facilities can use.

The House on Wednesday approved the second reading of Senate Bill 730, known as the Ratepayer Protection Act, in a 69-44 vote. The measure would require data center developers to cover the cost of grid expansions, transmission upgrades, and new power generation needed to serve their facilities. It would also require water-efficient cooling systems, such as closed-loop systems, to reduce strain on local water supplies. Data centers can use between 1 million and 5 million gallons of water per day.

"At a time when families and small businesses are worried about high costs, we cannot allow massive new energy demands from data centers to drive up power bills," said Rep. Matthew Winslow, R-Franklin, Vance, who is the co-chair of the House Energy and Public Utilities committee. "That's why the Ratepayer Protection Act makes sure data centers pay for themselves rather than passing costs onto hardworking North Carolinians. As our state continues to grow, we're committed to keeping energy reliable, communities protected, and affordability front and center."

Environmental advocates have praised the bill's conservation efforts but say the proposal still leaves gaps. Anita Moore of the Haw River Assembly said she wants more oversight of how much water data centers withdraw and what happens to it afterward.

"That water is going to have chemicals in it once it's through, and so we want to make sure that there is regulation around where that water goes to, whose community it sits," Moore said.

Moore said the state lacks a water withdrawal permitting system.

"They can take as much water out of the Haw, for example, as they want to," she said. "That water doesn't go back because of the closed-loop system. So that's one thing that we really want to make sure, that there's transparency around how much water they're going to be using."

Clean-energy advocates have also raised concerns. Will Scott with the Environmental Defense Fund said he believes parts of the bill could extend the life of coal-fired power plants.

"Unfortunately, this bill also contains provisions that would delay the retirement of coal plants, which are expensive and polluting, and would limit the range of options to replace them in a way that wouldn't be cost-effective," Scott said. "Instead of limiting data center costs, this is set to drive up power generation costs."

Communities across the Triangle have recently paused new data center development to review local policies as interest in the industry grows.

SB 730 now returns to the Senate for further consideration.

Following the House vote, Scott issued a statement saying, "You cannot promise affordable power while blocking the retirement of expensive, outdated coal plants. North Carolinians deserve better than legislation that misses the mark on big tech. It's simple: data centers should pay for their own new clean energy, but this bill doesn't do that. Hopefully, legislators will continue refining this bill to ensure it actually protects consumers from the very real electricity cost and pollution impacts of the data center build-out."