QTS, a company with more than 90 data centers across the country, is constructing a $1 billion center off Hands Mill Highway (S.C. Highway 274) in unincorporated York County near Lake Wylie, South Carolina, as seen on Sunday, March 1. (Photo courtesy of Terry Roueche)
COLUMBIA — Fewer data center firms are weighing locations in South Carolina, utility officials told senators Tuesday.
Officials from the state’s two publicly traded utilities said they’ve seen the number of data center proposals on their waitlists sink. Their testimony came as senators consider regulating the growing industry in the state.
“A lot of data centers have dropped out in the last year, out of our spreadsheets,” Jonathan Yarborough, a lobbyist with Dominion Energy’s South Carolina office, told a Senate Agriculture and Natural Resources subcommittee.
As of this week, nine potential centers of varying sizes were in the pipeline for Dominion’s South Carolina power territory, Yarborough said. All of them are proposed by speculative developers, rather than earmarked for a specific company. How many of those will ultimately seek to build remains to be seen.
And Tiger Wells, a lobbyist for Duke Energy, said the utility’s data center backlog across the Carolinas has gone from more than 100 to less than five.
The largest of these centers — known as hyperscalers — are facing pushback nationwide amid a rush to build the computing necessary to support rapid advancements in artificial intelligence. The opposition is due in large part to the massive amount of energy these mega centers require, a pain point for residents who are seeing their own monthly power bills continue to rise.
Public protests were enough to dissuade a developer known as Tiger DC from its plans for a $3 billion data center in Spartanburg County. The company abandoned its plans just over a week ago, after county council members vowed to switch their final vote to “no” on a property tax incentive package meant to lure the firm to the area.
A gigawatt data center campus in Colleton County, not far from the headwaters of the environmentally sensitive ACE Basin, has yet to file an amended zoning application after residents in December filled an auditorium to voice their opposition.
In January, a pair of residents sued the county over a zoning law change that made the 860-acre project possible.
And residents of a Lake Wylie community have renewed concerns over a 400-acre data center campus under construction in York County. The developer, Virginia-headquartered QTS, purchased a second 400 acres at the end of last year but told residents it doesn’t currently have plans for the additional land, The Post and Courier reported.
York County Council has stood by the QTS project and the incentive package approved for the company in 2023.
That included a reduced, 4% property tax rate, plus special credits knocking down the bill an additional 20-35% over 40 years. The state also made a $200,000 grant for site work.
To address worries, senators have introduced a pair of bills setting standards for how and where data centers are built in the state, as well as how their power needs are paid for.
The first proposal, which utility companies testified on Tuesday, was introduced by Sen. Tom Davis, R-Beaufort.
His bill sets up an office within the state Department of Environmental Services for these centers, holding them to areas that can handle their demands for resources. Power rates charged to data centers would remain the purview of utility regulators.
A second bill, filed by Senate Judiciary Chairman Luke Rankin, R-Myrtle Beach, is nearly identical except it makes the Public Service Commission the lead agency. The Department of Environmental Services would still handle environmental permits but wouldn’t be the primary regulator.
So far, neither piece of legislation has advanced.
Both bills break data centers into three tiers based on the amount of power they use — less than 10 megawatts, less than 50 megawatts and 51 megawatts or higher. The environmental agency would have between 60 and 120 days to permit theses centers, based on how large they are.
Most of South Carolina’s data centers use less than a megawatt and would fall into that first tier, according to Wells, the Duke lobbyist.
Across Duke’s joint Carolinas territory, there are 40 data centers. Only three use more than 50 megawatts, Wells said. All combined, data center usage comes to 470 megawatts — about 1% of Duke’s total power production in the Carolinas, Wells said.
Duke plans to roughly double its total power capacity in the Carolinas over the next 14 years. But Wells claimed data centers are not driving the buildout.
Still, if all the anticipated data center projects in Duke’s territory were to come to fruition, that total load could grow nearly 5,000 megawatts — 10% of the company’s total power production once its expansion plans are operational.
With that in mind, senators want the Public Service Commission to sign off on regulated power company’s arrangements with data centers, ensuring the centers alone are covering the cost of producing and transmitting the power they need.
All of South Carolina’s utility companies, including state-owned Santee Cooper and rural power cooperatives across the state, told senators this is something they already do through contracts they sign with major power users.
Those contracts include provisions that power users cover the cost of feasibility studies and a mandatory contract length of about 15 years with penalties if they leave early.
The contracts also often require power users to make a deposit up front — at Duke, that ranges from $20 million to $130 million — to cover the costs of getting them hooked into the grid. And if a company doesn’t actually use all of the power it told the utility it was going to need, it usually has to pay for most or all of those megawatts anyway.
SC legislators denounce Lowcountry data center while mulling regulations for the industry
Senators said it’s still important to make these best practices a mandate under state law.
“I do want to make sure that we have a product at the end of the day that’s enforceable,” said Sen. Russell Ott, D-St. Matthews. “That we’re going to be able to hold our utilities’, public and private, feet to the fire to ensure that we put into place is actually done.”
In addition to energy, the two Senate proposals go on to mandate that data centers report water usage to the state annually and that developers use the most water-efficient methods available to cool the rows of computer servers that keep the country’s information superhighway humming.
Data center operators historically have been secretive about water usage. It took a resident suing Dorchester County in 2024 to force the county to publicize water requirements for a Google data center under construction near rural St. George.
The tech giant has been reporting water usage at its operational facilities since 2022.
According to the company’s most recent report, its nearly 20-year-old Berkeley County data center uses about 776 million gallons annually. It’s Google’s third most water-intensive center globally.
By comparison, in Aiken County, Facebook parent company Meta will use less than 30,000 gallons per day — nearly 11 million annually — when the tech-giant’s data center is up and running, according to Will Williams, who handles economic development for Aiken, Edgefield, Saluda and McCormick counties.
Courtesy of South Carolina Daily Gazette
