Analysis: How Data Centers Became a Midterm Election Issue

A year ago, few voters could have described what a data center does. By Election Day, the giant buildings full of computer servers had become a recurring theme in campaign ads and debates across the country.

The money

Political ads that mentioned data centers drew about $173 million in spending this cycle, according to the ad tracking firm AdImpact, as reported by CNBC. Candidates in both parties used the issue, often linking it to rising electricity bills.

Local governments also acted. CNBC reported that voters and local boards considered at least 41 measures related to data centers, and at least 10 localities adopted bans or moratoriums on new facilities.

Why voters noticed

Data centers use large amounts of electricity and, in many cases, water for cooling. As technology companies raced to build more of them, utilities in several states warned that demand for power was rising faster than new supply. Some utilities sought rate increases to pay for new plants and transmission lines.

In communities where projects were proposed, residents raised concerns about noise, land use and tax breaks given to large companies. Supporters pointed to construction jobs and local tax revenue.

Texas as the test case

In Texas, which accounts for roughly a quarter of planned US data center capacity according to the investment bank Jefferies, Democrat Gina Hinojosa made the issue central to her winning campaign for governor. She called for pausing new projects until the Legislature adopts protections for water and the power grid, according to her platform.

Her opponent, Gov. Greg Abbott, had promoted the industry for years, but late in the campaign ordered a pause on some permits pending a review of the grid.

A cross-party concern

The issue did not split cleanly along party lines. Some Republicans in rural areas opposed projects over land and water concerns, while some Democrats backed them for jobs and tax revenue.

What to watch

With new governors and legislatures taking office in January, several states are expected to debate rules on who pays for new power infrastructure, how much water facilities can use and whether tax incentives should continue.

The outcome will matter for technology companies, utilities and households, since the cost of new power plants is often passed on to customers through their monthly bills.

How we reported this

This report is based on information confirmed by the Associated Press or by at least two major news organizations, as noted in the text. Figures from early or partial counts are identified as such and may change. BURN VOC will update this story as new information is released.