Brian Murphy

On concerns about hyperscale data centers

Electricty demands and rising utility costs are present on voters minds. As inflation continues to rise the value of our dollar declines on a daily basis. The demand on available electricity is finite. Citizens don’t want to subsidize hyperscale data centers through paying for more electricity and in the event of grid failure and power allocation want to have data centers slated for shut down first to support homes and agriculture before data centers. Water consumption is a concern, cooling a data center takes a lot of water and electricity. As far as total consumption goes I have found more people favorable to the idea of data centers if they are on 100% closed loop systems that recycle their own water. Again, voters want to know in the event of resource constraints that the state will prioritize water to homes and agricultural land before it goes to data centers and keeping the amount of water used to a minimum is a must for the citizens of our state. Infrastructure is the underlying concern, if a hyperscale data center is built does that actually bring economic growth to the state? Outside of the construction period how many permanent employees are coming with data centers? Does the current electrical grid of all our communities support hyperscale data centers? Taxation and payment to bring the centers in is also concerning. Most South Dakotans support smart economic growth that is equal in burden and growth to citizens as it is to businesses. Our TIF process needs work to reduce the amount of time a TIF is active. One has to question the necessity of a TIF in relation to data centers, if the profit margin and necessity on them is so robust then why can’t large multi billion dollar corporations pay full taxes for a site from the projects inception? I also question long term viability of the data centers and what remediation would be needed to refit or to tear down a data center site twenty years from now? We see the same problem long term with windfarms and leaving heavy infrastructure on land that is not fully remediated to a pre installation state of affairs.

How they’d address those concerns

To fix the issues we need to continue to work to advocate for citizens in any economic proposal to bring in data centers. First and foremost the approval process should come from the citizens. I trust the voters of this state and their collective wisdom to discern, on the facts, whether or not a hyperscale data center is within their wants or interests. More data of construction and asset use and allocation is needed on data centers. The mandate for data centers has been placed in front of Americans at large and it feels inorganic. South Dakotans and American Citizens deserve the time and the data to make discerning decisions on data centers. It is incumbent on the corporations that would benefit from data centers to provide any and all data they can and to “make the sale” as it were to the American People on them. Skepticism is safe at this point and the voters will not be bullied or rushed to an opinion on them. The best way for the corporations to ensure placement and success of data centers is to build them without TIFS or any tax incentives and to make sure the citizens local to the data centers PROFIT from the data centers in some way. As an engineering concept, any data center that could support its own electricity production separate from the existing grid would have a leg up in energy production. We are fast approaching a state of energy dependence in America that consideration of new nuclear energy sites is going to become part of the conversation in the next ten to twenty years and we have to start preparing for that conversation. Bottom line; if our citizens don’t know what data centers do and cannot see how they would profit from them then they will not be built in our state. We don’t owe any altruism to corporations and are not required to make them profitable by law. In the free market economy the best will rise.