SC Small Business Chamber calls for pause on new data centers that drive up energy demand

Press Release
April 15, 2024

Below is a statement by Frank Knapp Jr., president and CEO of the South Carolina Small Business Chamber of Commerce regarding the SC Energy Security Act being considered by the SC Legislature.  Also below is other information related to the statement.


It is clear that South Carolina will need more energy generation to serve our growing population and business community.  The SC Energy Security Act (H.5118) addresses this and other issues. However, the bill does not address what the state can do to reduce the need for more costly generation that negatively impacts all ratepayers.

The South Carolina Small Business Chamber of Commerce is proposing that H.5118 be amended to include the creation of a legislative Data Centers Study Committee.  Data centers have been accurately called “energy hogs” because of the massive amount of electricity they require.

The study committee should be responsible for:

–Determining the energy needs of data centers.

–Assessing any economic impact to the state.

–Conducting a cost-benefit analysis of the data centers to the ratepayers.

–Identifying alternative energy sources for data centers.

–Recommending to the legislature how or whether the state should move forward with data centers to protect ratepayers.

We are also calling for the amendment to include a pause in new data center approval in the state until the study committee issues its report.

Finally, we have provided information about the data centers problem to legislators (see below).

April 15, 2024

Legislative Data Centers Study Committee Needed
SC legislature must pause data center growth

“Energy Hogs” data centers are driving electricity demand nationwide

–          The nation’s 2,700 data centers sapped more than 4 percent of the country’s total electricity in 2022, according to the International Energy Agency. Its projections show that by 2026, they will consume 6 percent. Industry forecasts show the centers eating up a larger share of U.S. electricity in the years that follow, as demand from residential and smaller commercial facilities stays relatively flat thanks to steadily increasing efficiencies in appliances and heating and cooling systems.

–          Nine of the top 10 U.S. electric utilities said data centers were a main source of customer growth, leading many to revise up capital expenditure plans and demand forecasts, according to a Reuters analysis of company earnings reports from the first three months of the year.

–          Utility shortages in the face of these data center demands are happening in almost every market.”

–          Electric utilities are forecasting the nation will need the equivalent of about 34 new nuclear plants, or 38 gigawatts, over the next five years to supply power for data centers, electrification and new industry.

–          As a recent International Energy Agency report says electricity for data centers, including for AI and cryptocurrency, could double by 2026.

New data centers in South Carolina

–        Google isn’t wasting any time getting to work on one of its two planned data center sites in Dorchester County.  The Silicon Valley internet search and marketing company has filed for a permit this month (April) that would allow it to clear timber and install erosion controls on property in a rural area near St. George. The subsidiary of technology giant Alphabet Inc., using the alias Project Pecan, has asked the S.C. Department of Health and Environmental Control for approval that would also allow the mass grading of 325 acres and construction of access roads to the site. The data center would join another that Google has planned for the county’s Pine Hill Business Campus, located on U.S. Highway 17-A west of Summerville. That $510 million project is also in the permitting stages and appears to be further along, with both water and electric deals lined up.

–          South Carolina has at least four large data center projects in the works, collectively needing an estimated 800 megawatts of power daily. Compare that to a single megawatt being enough to power between 400 and 900 homes in a year, according to federal estimates. That’s in addition to at least nine data centers already in South Carolina, as well as numerous smaller private ones serving a single company’s needs.

Power for other industries is in danger

–         “Lawmakers need to think about this,” Hertz-Shargel said of allocating an increasingly limited supply of power. There is a risk that strategic industries they want in their states are going to have a challenging time setting up in those places.”

–          “It’d be fine with me if we didn’t serve any of them,” Dominion Energy South Carolina President Keller Kissam said of data centers during a legislative hearing last October. But at the same time, the Virginia-headquartered utility company was brokering a discount electricity deal for a $510 million Google data center proposed near Summerville.

State regulators and utilities handcuffed

–         Regulators and utility executives across the country generally are not empowered to prioritize which projects get connected.

–         In Virgina, data centers are no longer as welcome as they once were. Dominion has threatened to turn away new centers, saying it can’t meet the power demand.

Data Centers generate few jobs but pay high local property taxes

–          The demand has Georgia officials rethinking the state’s policy of offering incentives to lure computing operations, which generate few jobs but can boost community budgets through the hefty property taxes they pay.

–          Dorchester County Council approved some of the biggest financial incentives in county history to lure the private-sector tech employer. They would cut the data center operator’s property taxes to a fixed rate of 4 percent of the assessed value of any land and buildings it owns and occupies for up to 53 years. The data center operator will also receive a 100 percent refund of taxes it pays on personal property, such as vehicles, and the county sold land it owned — both at Pine Hill and near St. George — to Google for discounted prices.

States are responding

–          The top leaders of Georgia’s House and Senate, both Republicans, are championing a pause in data center incentives.

–          The Georgia Senate voted last month to suspend some tax breaks for data centers, saying the businesses failed to create enough jobs to stimulate the state’s economy.


Data Centers are looking at alternative energy sources

–          The Portland project Halaburda and Khalili are developing will now be powered in large part by off-the-grid, high-tech fuel cells that convert natural gas into low-emissions electricity. The technology will be supplemented by whatever power can be secured from the grid. The partners decided that on their next project, in South Texas, they’re not going to take their chances with the grid at all. Instead, they will drill thousands of feet into the ground to draw geothermal energy.

–          Companies are increasingly turning to such off-the-grid experiments as their frustration with the logjam in the nation’s traditional electricity network mounts. Microsoft and Google are among the firms hoping that energy-intensive industrial operations can ultimately be powered by small nuclear plants on-site, with Microsoft even putting AI to work trying to streamline the burdensome process of getting plants approved. Microsoft has also inked a deal to buy power from a company trying to develop zero-emissions fusion power.


Frank Knapp
President & CEO
South Carolina Small Business Chamber



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