Data Center Hysteria
Back in 1999, concern bordering on hysteria gripped America and the world over the unknown impact on digital infrastructure from the arrival of a new millennium. Doomsday forecasts prompted many to stockpile water and food in the event system failures would significantly disrupt daily life.
When the ball dropped in New York’s Times Square at the stroke of midnight, on December 31, 1999, the planet was neither plunged into darkness, nor chaos. The feared technological melt-down failed to materialize. In retrospect the hysteria was unwarranted.
A quarter of a century later a new technology hysteria is playing out across Penns Woods this time centered on the construction of data centers. Fear of developing technology has collided at the intersection of misinformation, conspiracy theory, and NIMBYism.
Pennsylvania is on the cusp of becoming a major host to data centers. In addition to fulfilling the obvious technology needs, data centers spin-off a wide range of benefits including high paying constructions jobs, family sustaining permanent jobs, and significant contribution to the local tax base. Additionally, many of the electronic components used to equip data centers are manufactured here in Pennsylvania.
The focus, however, has been on the perceived negatives – most of which are at best greatly exaggerated if not outright false. As a result, citizens have packed local government meetings to rail against the siting of data centers and lawmakers have rushed to propose a wide range of reactionary measures.
Data centers make everyday life possible. Cellular phones, social media, GPS systems, the internet, medical records, the systems that control the electric grid, inventory at your local grocery store, photos of your kids and grandkids stored “in the cloud” – all are housed in a data center somewhere. If you are reading this, it is because of information stored in a data center.
Chief among the misinformation being spread about data centers is they will cause rising electricity rates in surrounding communities. Pennsylvania is part of the 13 state plus District of Columbia PJM power grid, so a data center built in your municipality isn’t going to have a local impact.
Data center construction is not responsible for the rapidly rising cost of electricity – that is the fault of government, especially Pennsylvania state government. In a new report issued by the National Taxpayers Union Joshua Schubert pinpointed the cause:
“From 2019 through 2024, regulatory uncertainty over the Regional Greenhouse Gas Initiative (RGGI) shrank Pennsylvania’s proposed generation pipeline by 62% in cumulative pipeline volume compared to the prior six-year period . . . Developers who were building power plants at the fastest rate in the PJM region stopped proposing projects. Three large natural gas plants were cancelled. The state’s largest coal plant and a nuclear reactor closed.”
This past suppression of generation capacity is why data center developers simultaneously construct new generation facilities and/or invest in existing infrastructure upgrades. In Pennsylvania, for example, a new natural gas-fueled power plant is being constructed in Homer City which will not only provide electricity to a new data center but add to the grid supply. The shuttered Three Mile Island nuclear power plant near Middletown is being restarted to generate power for a proposed new data center.
Data center opponents also cite water supply as a concern. In addition to the fact water is not a scarce resource in Pennsylvania, consumption of water by data centers is relatively minimal. The Committee to Unleash Prosperity compiled an infographic showing that more water is used annually in the United States to spray on golf courses and irrigate watermelon patches than is consumed by data centers.
There is also concern over where in a community a data center should be located. Virtually every municipality in Pennsylvania has a zoning code on the books. Data centers should be treated the same as any other business and therefore be constructed in the appropriate zone. They will not pop up in the middle of housing developments.
A valid point brought up by data center opponents are tax breaks and subsidies for data centers. Government – federal, state or local – should not be in the business of picking winners and losers. All too often government puts it thumb on the scale. Data centers, like all other businesses, should succeed or fail based on market forces.
The bottom line: while prudent consideration of data center construction in accordance with local zoning laws is necessary, misinformation driven hysteria should not be allowed to derail the continued development of this critical component to our nation’s future.
(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly American Radio Journal and Lincoln Radio Journal. His e-mail address is lhenry@lincolninstitute.org)
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