NC activists want to ban data centers. What does NC legislature, Duke Energy say?
Can North Carolina ban new data centers, eliminate tax incentives and prevent them from spiking electricity bills for residents?
Those were the demands of activists with the Party for Socialism and Liberation, which gathered outside of the Charlotte Government center on July 1, demanding a change to the growth of data centers in North Carolina under their new campaign.
The news conference followed a moratorium passed in Charlotte that will limit the approval of new data centers for the next 150 days.
“The fight is far from over, because although we’re here in Charlotte, communities across North Carolina are also organizing from Durham, from Boone, to Apex,” said Dana Alhasan, an organizer with PSL. “As these multi-billion dollar corporations are still planning on creating these massive data centers that only pollute our waters, raise our utility prices and continue to put profit over people.”
However, for state leaders such as N.C. Speaker Destin Hall, finding ways to balance the industry growth and protecting residents is a priority. Duke Energy says it sees the growth as an opportunity to generate revenue for both their company and residents.
How have data centers affected North Carolina?
With the rapid growth of data centers across North Carolina — including in Charlotte — residents, lawmakers and companies have been debating their impacts. Activists are turning up to city halls and telling their elected leaders about the damages they feel data centers could bring.
“As a public health professor, I’ve been tracking these conversations about data centers before the conversation came recently to Charlotte,” Apryl Alexander, a public health researcher and professor at UNC Charlotte, said during the PSL news conference. “We’ve seen the damage that’s been done to North Virginia with data centers, residents are already reporting an increase in their electric bill and the harms of the noise pollution that’s being done to them.”
Gustavo Toro, a father with a 6-year-old son with autism, said he was concerned about the community and the health of his child.
“While the community, as well as myself, have pushed for this moratorium to take place, it is of great importance for the state to get involved,” Toro said. “To not just protect citizens of Charlotte, but North Carolinians as a whole.”
How would North Carolina change data center policy?
A permanent ban statewide would require action from the North Carolina General Assembly. A spokesperson for N.C. House Speaker Destin Hall said North Carolina can offer a strong business opportunity for many looking to bring their companies to the state, but taxpayers “should no longer be on the hook” to pay for the expenses of data centers. He didn’t take a position on a total data center ban.
Activists with PSL’s campaign are calling for the repeal of the tax incentives. A spokesperson for Hall said the industry has “evolved,” and the sales tax exemption for electricity for data centers is “no longer necessary.” The sales tax exemption on qualifying data centers allowed facilities to avoid paying for electricity costs, which was used to lure further facilities to the state. The exemption was repealed last week. However, the budget did not remove exemptions on the purchases of equipment, machinery and other investments made by data centers.
“The remaining exemptions were not changed by this budget,” a spokesperson for Hall wrote. “And it would require careful examination before we moved forward on eliminating those tax provisions.”
PSL’s campaign wants all state tax incentives removed for data centers looking to establish themselves in North Carolina.
When it comes to protections for those who are paying their utility bills, Hall’s office said he supports the Ratepayers Protection Act, also known as Senate Bill 730. The Ratepayers Protection Act, if passed, would protect electric customers from higher costs from new energy demands, including data centers. The bill would also require large data centers to cover their own energy costs to protect residents on the grid from high electricity prices. The bill needs the Senate to approve House changes before it becomes law.
“The Speaker is hopeful the Senate will take up the Ratepayer Protection Act,” Hall’s office said. “House Republicans believe data centers should pay their fair share of energy costs.”
Duke Energy: Data centers don’t shift costs to customers
Duke Energy disputed claims that data centers increase electric costs for their customers.
The utility company told The Charlotte Observer new data centers and other large electricity users ”must agree to pay the costs associated with connecting to the power grid and receiving electricity.” The company said those costs include upgrading infrastructure like poles and power lines.
“As new large electricity users like data centers come online, their investments help absorb fixed system costs, reducing pressure on future rates and supporting a stronger, more resilient grid,” said Duke Energy spokesperson Lee J. Freedman. “Over time, that means more reliable service and lower costs than customers would otherwise face without that growth.” Duke Energy cited an analysis the company filed with the North Carolina Utilities Commission, which found that 16 data centers planned in North Carolina would generate money through their long-term contracts and would save Duke Energy customers $3.6 billion over 15 years.
What’s next for the campaign?
The Charlotte moratorium marked a significant win for PSL’s campaign against data center expansion across North Carolina. Activists said they plan to continue advocating against future data center construction and continue organizing across the state.
“Not only do we know enough, but we’ve had enough,” said activist Kobli B. “We’ve seen people all across the state rising up to fight against the big tech takeover of our land, our water and our health.”
For many fighting against data centers, their biggest challenges ahead will be to convince state lawmakers to look into broader policies on data centers by turning local action into statewide momentum.
