Sen. Laura Wakim Chapman: Data Centers: To Regulate, Or Not To Regulate. Is That Even A Question?
I was, like you, blindsided by an "announcement" of a 100-megawatt data center going into the Centre Foundry in Warwood. As your Senator, I attended the recent Warwood community and Wheeling Council meetings because I wanted to hear residents' questions and concerns directly. My job is to find the facts, share them with you, and most importantly, listen to what you have to say. I will only support what is best for you, my fellow citizens in Warwood, and the Northern Panhandle.
There was much discussion about the Power Generation and Consumption Act (HB 2014), which passed with overwhelming support - with only one Senator voting no, and almost 90% of the House in support of the bill. This bill passed with overwhelming support because it struck the right balance--protecting local control, establishing clear guardrails, and creating opportunities to grow West Virginia’s economy.
I asked the Department of Commerce to hold an informational session as to the effects of HB 2014. This will be a time when your additional questions will be answered. The Department has made further inquiry as to the Centre Foundry project and issued a statement clarifying that the project "is a mixed-use manufacturing and technology facility, including the manufacturing of modular computing components and software design." I met with the owner and was given the same details. It appears that the project is not subject to HB 2014.
Here are the facts about HB 2014. Before it passed, the data center industry was unregulated. This bill includes protections for local communities while still providing economic benefits. As to the protections, it included creating a regulatory framework that governs any data center having a critical aggregate IT load (power consumed by the equipment) of over 90-megawatts (a "high impact data center") and requires certification by the Department of Commerce.
Local control was not removed by HB 2014. It does not exempt facilities from overarching environmental laws. If a data center is below 89-megawatts of IT load, it is 100% subject to all ordinances imposed by municipal, city, and county ordinances. In fact, data centers must still obtain permits through the Department of Environmental Protection (DEP). Through the permitting process (air quality, storm water, disturbance permits, etc.), there is a 30-day public comment period and a hearing held where those wishing to speak, may. I have seen this process first hand when a medical waste incinerator facility wished to come to Follansbee. There was an uproar by the community, and the project was scrapped. Your voice always matters!
While the Department of Commerce is in charge of certification of data centers of 90-megawatts or more, this is only because 7 out of our 55 counties are able to zone data centers. Imagine the poorest county in the nation, McDowell County, West Virginia, having to turn away a data center that would bring millions of dollars in revenue because there is no zoning board. Also, as can be seen, data centers are highly complex needing the proper environmental, regulatory, and grid stabilization analysis. This analysis requires expensive, in-depth investigation that requires specialized knowledge. The state created the certification process to handle this complexity, while preserving environmental review and smaller-project local control.
Most importantly, HB 2014 places ratepayer protections and so UTILITY RATES ARE NOT TO BE RAISED DUE TO A DATA CENTER'S CONSUMPTION OF POWER. In fact, the more people on the "grid" the lower the rates will be. Fixed costs of maintaining the grid are spread among the users. The more users, the lower the costs. It also allows for the cutting of red tape so that we can use our abundant natural resources of coal and natural gas to power the centers.
As to its benefits, HB 2014 sets forth the distribution of tax revenue. 50% goes to eliminate the personal income tax. Once our income tax is at zero percent, those monies go into the general revenue fund. 30% stays within the county that holds the data center (along with the entirety of the property taxes and excess levies-if any). 10% goes to the 54 other counties within the state. An important piece of the bill also sends 5% for water infrastructure upgrades and another 5% goes to electric grid upgrades. Our infrastructure, like most other states in the nation, is dated and in need of upgrades. The Department of Commerce has estimated that for a county with a 1-gigawatt data center, it will receive approximately $26 million dollars of revenue yearly. To put this into perspective, the entire yearly budget for Ohio County is $25 million.
Data centers can be responsibly developed. For example, there are gel or air-cooling capabilities that use very little water. The centers can use a close-looped system where water is put in occasionally and recycled. There can be reclaimed systems where grey and dirty water is taken, cleaned, and then released 120% cleaner than what came in.
As a mother of two young children, environmental concerns are deeply important to me. That is why I was the lead sponsor of a bill to provide whole-house water filters to those who have dangerous water. I also fight to lower your utility costs by sponsoring SB 981 which would put a one year pause on utility rate increases so that a study can be conducted as to why our utility rates keep getting higher and higher. I fight daily for the Northern Panhandle to not be forgotten by Charleston. I will never take a vote that would harm the Northern Panhandle or its people.
One thing is for sure, before HB 2014, there was no specific regulatory framework for large-scale data centers and no rate-payer protections. The legislature correctly determined that it is important to have community protections in place when data centers come to West Virginia, and it was achieved through HB 2014.
Chapman, R-Ohio, is a West Virginia State Senator for District 1.