NC House Panel Advances Bill to Restrict Data Center Operations
North Carolina House committee approves bill requiring data centers to pay their own energy costs and complete environmental studies before approval.
RALEIGH, NORTH CAROLINA — The North Carolina House Energy and Public Utilities Committee voted Wednesday to advance legislation that would ban data centers from transferring energy costs to other consumers and mandate comprehensive studies before new facilities receive approval.
Senate Bill 730, known as the “Ratepayer Protection Act,” is one of several state-level proposals aimed at regulating data centers as local municipalities across North Carolina implement temporary moratoriums to better understand these facilities before granting permits.
New Requirements for Data Centers
The legislation establishes multiple requirements for responsible data center development. Large data centers would be required to conduct noise studies under the proposed law. Local governments would gain authority to assess potential impacts on water resources, air quality, agricultural resources, and thermal plumes before approving new facilities.
The bill mandates that data centers implement closed-loop water systems designed to minimize water usage for cooling operations. These systems would help reduce the environmental footprint of the energy-intensive facilities.
“This legislation puts ratepayers first by requiring data centers to pay their own money, protecting our water resources, strengthening energy reliability and preventing cost shifts onto families and small businesses,” said Rep. Matthew Winslow (R-Franklin).
Tax Incentive Restrictions
Senate Bill 730 includes a prohibition on local tax incentives for data centers, though it does not address state-level tax incentives. Both Republican and Democratic lawmakers have indicated that statewide tax breaks for data centers need reconsideration.
Gov. Josh Stein has previously urged the legislature to modify or repeal existing statewide tax incentives for data centers, citing rising costs to North Carolina residents.
Rep. Ray Jeffers (D-Person) questioned the reasoning behind restricting local incentives during the committee discussion. Jeffers noted that his county wants to attract a data center and has been working on developing such an agreement.
Statewide Response to Data Center Boom
The legislative action comes as communities across North Carolina grapple with a surge in data center development proposals. Multiple municipalities have imposed temporary bans to allow time for comprehensive evaluation of these facilities before making approval decisions.
The committee’s advancement of the bill signals growing legislative interest in establishing uniform standards for data center development across the state. The measure now moves forward in the legislative process for further consideration.
Data centers have become increasingly prevalent as demand grows for cloud computing services and digital infrastructure, but they also present challenges related to energy consumption, water usage, and community impact that lawmakers are working to address through regulation.
