Data Center Development

2025-2026 Bill 867: Data Center Development - South Carolina Legislature Online

South Carolina General Assembly
126th Session, 2025-2026
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S. 867
STATUS INFORMATION
General Bill
Sponsors: Senators Davis, Kimbrell, Garrett, Sutton, Walker, Blackmon, Turner, Zell, Kennedy and Devine
Document Path: SR-0486KM26.docx
Introduced in the Senate on January 29, 2026
Currently residing in the Senate
Summary: Data Center Development
HISTORY OF LEGISLATIVE ACTIONS

Date

Body

Action Description with journal page number

1/29/2026

Senate

Introduced and read first time (
Senate Journal-page 4
)

1/29/2026

Senate

Referred to Committee on
Agriculture and Natural Resources
(
Senate Journal-page 4
)

1/30/2026

Scrivener's error corrected

4/28/2026

Senate

Committee report: Favorable
Agriculture and Natural Resources
(
Senate Journal-page 14
)

5/6/2026

Scrivener's error corrected

View the latest
legislative information
at the website
VERSIONS OF THIS BILL
01/29/2026
01/30/2026
04/28/2026
05/06/2026

Indicates Matter
Stricken

Indicates New Matter

Committee Report

April 28, 2026

S. 867

Introduced by Senators Davis, Kimbrell, Garrett,
Sutton, Walker, Blackmon, Turner, Zell, Kennedy and Devine

S. Printed 4/28/26--S. [SEC
5/6/2026 10:24 AM]

Read the first time January 29, 2026

________

The committee on Senate Agriculture
and Natural Resources

To whom was referred a Bill (S. 867) to amend
the South Carolina Code of Laws so as to enact the "data center development
act"; by adding Section
49-35-10
so as to define terms pertaining to data
center, etc., respectfully

Report:

That they have duly and carefully considered
the same, and recommend that the same do pass:

WES CLIMER for Committee.

_______

A bill

TO AMEND THE SOUTH CAROLINA CODE OF LAWS SO AS TO ENACT
THE "DATA CENTER DEVELOPMENT ACT"; BY ADDING SECTION
49-35-10
SO AS TO DEFINE
TERMS PERTAINING TO DATA CENTER DEVELOPMENT; BY ADDING SECTION
49-35-20
SO AS
TO ESTABLISH THE DATA CENTER DEVELOPMENT OFFICE IN THE DEPARTMENT OF
ENVIRONMENTAL SERVICES, TO PROVIDE FOR THE POWERS AND DUTIES OF THE OFFICE, TO
ESTABLISH THE DATA CENTER INDUSTRY ADVISORY COMMITTEE, TO PROVIDE FOR THE
ADVISORY COMMITTEE'S MEMBERSHIP, AND TO PROVIDE FOR THE ADVISORY COMMITTEE'S POWERS
AND DUTIES; BY ADDING SECTION
49-35-30
SO AS TO REQUIRE A SITING PERMIT BEFORE
A DATA CENTER MAY LOCATE A FACILITY AT A PARTICULAR LOCATION, TO PROVIDE FOR
THE PERMIT APPLICATION PROCESS, AND TO PROVIDE FOR THE TIMELINE FOR
CONSIDERATION OF APPLICATIONS; BY ADDING SECTION
49-35-40
SO AS TO PROVIDE FOR
PERFORMANCE-BASED OPERATIONAL EFFICIENCY STANDARDS, WATER EFFICIENCY STANDARDS,
AND TO REQUIRE ANNUAL REPORTS; BY ADDING SECTION
49-35-50
SO AS TO PROVIDE FOR
INFRASTRUCTURE ADEQUACY ASSESSMENTS, TO PROVIDE FOR ENVIRONMENTAL IMPACT
ASSESSMENTS, AND TO PROVIDE FOR REASONABLE BUFFER REQUIREMENTS; BY ADDING
SECTION
49-35-60
SO AS TO PROVIDE FOR THE PUBLIC SERVICE COMMISSION'S ROLE
CONCERNING RATES, AGREEMENTS BETWEEN UTILITIES AND DATA CENTERS, AND COST ALLOCATION
METHODOLOGIES; BY ADDING SECTION
49-35-70
SO AS TO PROVIDE FOR DECOMMISSIONING
PLANS AND FINANCIAL ASSURANCES ASSOCIATED WITH DECOMMISSIONING; BY ADDING
SECTION
49-35-80
SO AS TO PROVIDE FOR THE INTERACTION BETWEEN THE PROVISIONS OF
THIS CHAPTER AND LOCAL GOVERNMENTS AND LOCAL GOVERNMENT LAND USE PLANNING; BY
ADDING SECTION
49-35-90
SO AS TO REQUIRE DATA CENTERS TO IMPLEMENT REASONABLE
MEASURES TO MINIMIZE NOISE, VIBRATION, AND LIGHT IMPACTS RESULTING FROM THEIR
OPERATION; BY ADDING SECTION
49-35-10
0 SO AS TO PROVIDE PROTECTIONS FOR
CONFIDENTIAL INFORMATION SHARED WITH THE OFFICE BY DATA CENTER OPERATORS; BY
ADDING SECTION
49-35-110
SO AS TO CLARIFY THE INTERACTION BETWEEN THIS CHAPTER
AND OTHER ENVIRONMENTAL LAWS; BY ADDING SECTION
49-35-120
SO AS TO PROVIDE FOR
ENFORCEMENT AND PENALTIES; TO PROVIDE THAT THE PROVISIONS OF THIS CHAPTER ARE
PROSPECTIVE; TO PROVIDE FOR REGULATIONS FROM THE DEPARTMENT OF ENVIRONMENTAL
SERVICES; AND TO PROVIDE THAT FOR TWO YEARS AFTER ENACTMENT THE DEPARTMENT OF
ENVIRONMENTAL SERVICES SHALL PRIORITIZE TECHNICAL ASSISTANCE AND GUIDANCE OVER
ENFORCEMENT TO FACILITATE INDUSTRY TRANSITION TO THE NEW REQUIREMENTS.

B
e it enacted by the
General Assembly of the State of South Carolina:

S
ECTION 1.
This act may be cited as the "Data Center Development Act".

S
ECTION 2.
T
he General Assembly finds that:

(
1) Data centers
represent critical infrastructure for the modern digital economy and provide
significant economic benefits to South Carolina through substantial capital
investment, high-quality job creation, tax revenue generation, and support of
essential digital services.

(
2) South Carolina
seeks to be a nationally competitive location for data center development by
providing regulatory certainty, efficient permitting processes, and clear
operational standards.

(
3) Data centers
require extraordinary amounts of electricity, and traditional utility rate
structures must be adapted to accommodate this new class of customer while
ensuring existing ratepayers are protected from infrastructure cost allocation.

(
4) Clear,
predictable, regulatory requirements benefit both data center operators and
existing ratepayers by preventing disputes over cost allocation and
establishing transparent expectations for facility development and operations.

(
5) Modern data
center technologies offer significant opportunities for water conservation,
energy efficiency, and environmental stewardship that should be encouraged
through reasonable standards rather than prescriptive mandates.

(
6) Brownfield
sites and previously developed industrial properties offer significant
advantages for data center development by utilizing existing infrastructure,
reducing environmental impact on undeveloped lands, and revitalizing
economically distressed areas, and the State has a strong interest in
encouraging data center location at such sites through appropriate financial
incentives.

(
7) Strategic
collaboration between data center operators, utilities, and state agencies can
achieve both economic development objectives and ratepayer protection through
innovative rate structures and cost allocation methodologies.

(
8) Streamlined,
coordinated permitting and review processes serve the interests of data center
operators, ratepayers, and the public by reducing regulatory uncertainty and
transaction costs.

(
9) Establishing
reasonable operational standards and infrastructure adequacy requirements
protects both ratepayers and data center operators by ensuring facilities are
appropriately sited and efficiently operated.

S
ECTION 3.
T
itle 49 of the S.C. Code is amended by adding:

C
HAPTER 35

D
ata Center Development

S
ection
49-35-10
.
F
or the purposes of this chapter:

(
1) "Data
center" means a facility comprised of one or more buildings that houses
computer systems and associated components, including telecommunications and
data storage systems, and that has a combined connected electrical load of one
megawatt or more.

(
2)
"Data center operator" means any person, corporation, partnership, or other
legal entity that owns, operates, or controls a data center facility.

(
3)
"Direct to chip cooling technology" means liquid cooling methods that remove
heat directly from a processor package, rather than cooling the surrounding air
in a server or device.

(
4)
"Electrical infrastructure costs" means all costs associated with generating,
transmitting, or distributing electricity to serve a data center including, but
not limited to:

(
a)
generation facility construction, expansion, or upgrade costs;

(
b)
transmission line construction or upgrade costs;

(
c)
substation construction or upgrade costs;

(
d)
distribution system improvements;

(
e)
grid reliability and stability improvements necessitated by data center load;

(
f)
interconnection costs; and

(
g)
any other capital or operational costs directly or indirectly resulting from
serving the data center's electrical load.

(
5)
"Infrastructure adequacy" means the existence of sufficient electrical
generation, transmission, distribution, water supply, wastewater treatment, and
transportation infrastructure to serve a proposed data center.

(
6)
"Office" means the Data Center Development Office.

(
7)
"Operational efficiency standards" means reasonable, technology-neutral
requirements for data center water use, cooling technologies, measures to
control noise, vibration, and light, and facility operations that reflect
industry best practices other than standards for electricity consumption which
shall remain the sole responsibility of the Public Service Commission.

(
8)
"Minimum contract obligations" means a long-term commercial agreement that
requires the customer to pay its fair share of cost of service based on the
customer's requested amount of power for a duration of time regardless of
actual usage, as determined by the Public Service Commission.

(
9)
"Tier 1 data center" means a data center facility with a connected electrical
load between one and ten megawatts.

(
10)
"Tier 2 data center" means a data center facility with a connected electrical
load between eleven and fifty megawatts.

(
11)
"Tier 3 data center" means a data center facility with a connected electrical
load in excess of fifty megawatts.

(
12)
"Utility" means any electric utility as defined in Section
58-27-10
or
58-31-10
, or any water or wastewater utility subject to commission jurisdiction.

S
ection
49-35-20
.
(
A) There is created
within the Department of Environmental Services a Data Center Development
Office. The office shall be headed by a director appointed by the Director of
the Department of Environmental Services. The office shall not have any
jurisdiction over electricity consumption, which shall remain the sole
obligation of the Public Service Commission.

(
B)
(
1) The Data Center Development Office
shall:

(
a)
conduct re-application consultations with data center operators who would like
to locate a data center in this State;

(
b)
accept and process data center siting permits;

(
c)
approve or deny data center siting permits;

(
d)
serve as a single point of contact for data center operators;

(
e)
develop and regularly update best practices and guidance documents for data
center operators;

(
f)
coordinate review processes among affected State agencies;

(
g)
provide technical assistance and guidance to data center operators;

(
h)
timely process applications;

(
i)
assist in resolving issues that arise between data center operators and
affected State and local authorities;

(
j)
conduct comprehensive reviews of this chapter's implementation every three
years;

(
k)
perform other duties and responsibilities related to the effective and
efficient operation of this chapter assigned to the office by the department;
and

(
l)
maintain an inventory of suitable sites.

(
2)
The office shall annually report to the General Assembly, the Governor, the
Public Service Commission, and the Office of Regulatory Staff concerning data
center development and operations. The report shall include recommendations for
improving competitiveness.

(
C)
The best practices and guidance documents required pursuant to subsection (B)(1)(e)
shall be developed in consultation with the data center industry advisory
committee established pursuant to subsection (E) and must address:

(
1)
application requirements for each data center tier;

(
2)
operational efficiency and compliance strategies other than standards for
electricity consumption which shall remain the sole responsibility of the
Public Service Commission;

(
3)
infrastructure adequacy assessment procedures; and

(
4)
environmental review expectations;

(
D) When
conducting comprehensive reviews of this chapter's implementation pursuant to
subsection (B)(1)(j), the office shall evaluate this state's competitiveness
for data center investment, operational efficiency of the review processes,
technological developments in the data center industry and how those
developments affect standards, and recommendations for statutory or regulatory
improvements. The results of each comprehensive review must be compiled in a
report submitted to the General Assembly, the Governor, the Public Service
Commission, and the Office of Regulatory Staff.

(
E)
(
1) The office shall establish a data
center industry advisory committee composed of ten members as follows:

(
a)
one data center industry representative appointed by the Governor;

(
b)
one utility industry representative appointed by the Governor;

(
c)
one representative from a ratepayer-advocacy organization appointed by the
President of the Senate;

(
d)
one representative from an environmental-advocacy organization appointed by the
President of the Senate;

(
e)
one representative from a water utility or water management district appointed
by the Speaker of the House of Representatives;

(
f)
one representative from local government with experience in land use planning
appointed by the Speaker of the House of Representatives;

(
g)
one representative from the South Carolina Energy Office;

(
h)
one representative from the Office of Regulatory Staff;

(
i)
one representative from the Public Service Commission; and

(
j)
one staff member from the office serving ex officio as a nonvoting member.

(
2)
Members of the committee shall serve terms of four years, except that of the
initial appointments, the Governor, the President of the Senate, and the
Speaker of the House of Representatives shall each designate two members to
serve two-year terms, and the remaining members shall serve four-year terms.
Members may be reappointed for one additional term. Vacancies shall be filled
in the same manner as original appointments for the remainder of the unexpired
term.

(
3)
The committee shall elect a chair from among its voting members. The office
shall provide administrative support to the committee.

(
4)
The advisory committee shall meet at least twice a year. The meetings shall
focus on reviews of the implementation of the provisions contained in this
chapter, identifying areas where the office's policies and procedures may be
streamlined, identifying and deliberating emerging issues relevant to data
centers, sharing best practices from among the data center operators, and
advising on regulatory updates.

S
ection
49-35-30
.
(
A) A data center may not
begin operations within this State unless the data center first receives a
permit from the office certifying that the provisions of this chapter have been
met. This obligation to receive a permit from the office is in addition to and
not in lieu of other local and state governmental approvals that a data center
must receive.

(
B) Prior
to applying to the office for a permit to operate a data center in this State,
a data center operator must provide the office with a notice of its intention
to open a location in this State. The notice shall contain a statement
requesting a pre-application consultation intended to provide the operator with
a clear understanding of the permitting requirements. Upon receipt of the
notice of intention with a request for a pre-application consultation, the
office shall schedule a pre-application consultation with the proposed data
center operator.

(
C)
(
1) When evaluating an application, the
office shall consider the tier in which the data center falls, infrastructure
requirements for that tier, water conservation requirements for that tier,
financial assurance requirements for that tier, and environmental review
requirements for that tier.

(
2)
Applications from Tier 1 data centers shall be subject to an expedited review
with a permitting decision made within sixty days of the data center's
completed application being received by the office. Tier 1 data center
applications shall:

(
a)
satisfy infrastructure requirements without a detailed assessment if the
proposed data center is located within existing industrial parks or areas with
demonstrated infrastructure adequacy;

(
b)
not require an environmental review statement; and

(
c)
satisfy water conservation requirements through certification by the applicant
that it intends to implement industry best practices rather than prescriptive
technology mandates.

(
3)
Applications for Tier 2 data centers shall be subject to a standard review with
a permitting decision made within ninety days of the data center's completed
application being received by the office. When assessing a Tier 2 data center
application the office shall:

(
a)
focus its infrastructure adequacy review on major infrastructure systems such
as electrical, water, and wastewater without requiring a detailed assessment of
every infrastructure component;

(
b)
require a site-specific environmental review statement addressing:

(
i)
water source capacity and projected consumption rates;

(
ii)
wastewater discharge volume and treatment compliance;

(
iii) stormwater management adequacy;

(
iv)
noise mitigation for cooling and backup power systems;

(
v)
vibration control measures for mechanical equipment;

(
vi)
measures to mitigate unreasonable light pollution from exterior lighting and
facility operations; and

(
vii) compatibility with surrounding
land uses. The office may waive specific review elements where site conditions
demonstrate minimal impact; and

(
c)
assess the applicant's water conservation plan which must be derived from
available technology options published by the office that satisfy water
efficiency objectives provided for in this chapter.

(
4)
Applications for Tier 3 data centers shall be subject to a comprehensive review
with a permitting decision made within one hundred twenty days of the data
center's completed application being received by the office. Tier 3 data center
applications shall require a:

(
a)
detailed infrastructure adequacy assessment;

(
b)
comprehensive environmental review statement addressing all factors identified
in subsection (C)(3)(b) and additionally including:

(
i)
the cumulative impact on regional water resources;

(
ii)
air quality considerations including emergency generator emissions;

(
iii) traffic impact during
construction and operation; and

(
iv)
mitigation measures for identified impacts; and

(
c)
demonstration that the applicant has fully complied with all relevant
provisions contained in this chapter.

(
D) The
time in which a permitting decision must be rendered may be extended by mutual
agreement between the office and the applicant or in extraordinary
circumstances. If the office fails to timely make a permitting decision, then
the permit is approved subject to standard conditions. Permits shall be issued
for the duration of the data center's operations if a data center has a
contract for electrical service in place.

S
ection
49-35-40
.
(
A) The office shall
establish performance-based operational efficiency standards applicable to all
data centers. The office shall not have jurisdiction over electricity
consumption, which shall remain the sole responsibility of the Public Service
Commission. The operational efficiency standards shall:

(
1)
allow data center operators flexibility in meeting objectives;

(
2)
recognize technological innovation and evolution; and

(
3)
reflect recognized industry best practices.

(
B)
(
1) The office shall establish water
efficiency standards applicable to all data centers. The water efficiency
standards shall achieve water efficiency through the implementation of any of
the following or combination of any of the following:

(
a)
closed-loop liquid cooling systems that recirculate coolants with minimal
evaporative loss;

(
b)
direct-to-chip cooling technologies;

(
c)
immersion cooling technologies;

(
d)
air cooling with high-efficiency heat rejection systems;

(
e)
hybrid cooling approaches optimizing water and energy efficiency;

(
f)
water recycling and reuse systems meeting or exceeding industry benchmarks; or

(
g)
alternative technologies demonstrated to achieve equivalent efficiency
outcomes.

(
2)
The office shall measure compliance with the water efficiency standards through
water use effectiveness (WUE) metrics. Tier 1 and Tier 2 facilities' WUE shall
not exceed 2.0 liters/kWh. Tier 3 facilities' WUE shall not exceed 1.5
liters/kWh. The office may employ alternative compliance metrics if the office
demonstrates that the alternative metrics measure water use efficiency as
effectively as the WUE standard.

(
3)
Data centers may apply for variances from the water efficiency standards. A
variance may be granted if:

(
a)
climate conditions make standard metrics inappropriate;

(
b)
alternative methods achieve superior environmental performance; or

(
c)
site-specific factors justify different requirements.

(
4)
Water efficiency standards do not apply to:

(
a)
emergency backup cooling systems;

(
b)
humidification systems required for equipment protection;

(
c)
fire suppression systems; or

(
d)
other non-cooling water uses.

(
C)
(
1) Data centers shall submit an annual
report to the office concerning:

(
a)
total water consumption;

(
b)
WUE metrics; and

(
c)
any significant operational changes affecting resource use.

(
2)
Reports shall be filed with the office on standardized forms prescribed by the
office to minimize administrative burden on data center operators. The office
shall provide Tier 1 data centers with a simplified form.

(
3)
The office shall maintain the confidentiality of all proprietary operational
information contained in the reports and the proprietary operational
information shall not be subject to the provisions of Chapter 4, Title 30, the
Freedom of Information Act.

S
ection
49-35-50
.
(
A) Data centers may be
developed and operated in locations within this State that are equipped with
adequate infrastructure to support efficient operations. The office shall
proactively work with data center operators to identify suitable locations for
the data centers to operate rather than only review locations identified by
data center operators. The office shall not have any jurisdiction over
electricity consumption, which shall remain the sole responsibility of the
Public Service Commission.

(
B) The
office shall conduct an infrastructure adequacy assessment of proposed
locations subject to the provisions contained in Section
49-35-30
(C). The
review shall focus primarily on the adequacy of major systems as provided in
this subsection.

(
1)
An infrastructure adequacy assessment with regards to a specific potential site
shall evaluate the availability of:

(
a)
an adequate water supply that does not deplete critical resources;

(
b)
adequate wastewater treatment capacity or the feasibility of on-site wastewater
treatment;

(
c)
adequate fiber optic connectivity; and

(
d)
reasonable access to major roads and highways.

(
2)
The assessment shall identify deficiencies in the existing infrastructure at a
potential location. The office shall provide an applicant with written notice
of deficiencies in the existing infrastructure at the potential location. The
notice shall contain potential solutions to the deficiencies, and the applicant
shall be given a reasonable opportunity to cure the deficiencies. An
application may not be denied until after identified deficiencies are not cured
within a reasonable time. The office shall find that infrastructure at a
particular site is adequate for locating a data center at that site if the
identified deficiencies are cured by the data center operator within a
reasonable time and the cost of required actions to cure the deficiencies are reasonable
and born by the operator.

(
C)
The following locations are presumptively suitable for data center development:

(
1)
existing industrial parks with demonstrated utility capacity;

(
2)
previously developed industrial or commercial sites; and

(
3)
brownfield sites identified by the Department of Environmental Services.

(
D) The
environmental impact of a proposed data center's development shall be
considered during the application process and shall focus on the proposed data
center's material impact on water and wastewater infrastructure; significant
environmental resources on or adjacent to the proposed location; and
transportation on major roads and highways. The environmental impact assessment
shall also take into consideration any proposed mitigation for identified significant
impacts. The environmental impact assessment shall disregard minor impacts or
speculative concerns. The office shall provide clear guidance to proposed data
center operators on the scope of the assessment during the pre-application
consultation.

(
E)
(
1) A data center operator that locates
a facility on a brownfield site identified by the Department of Environmental Services
pursuant to Section
44-56-710
, et seq., or on a site requiring environmental
remediation under state or federal environmental cleanup programs, is eligible
for a tax credit against state income taxes equal to:

(
a)
twenty-five percent of documented environmental remediation costs actually
incurred by the operator, not to exceed five million dollars per facility; and

(
b)
an additional investment tax credit equal to two percent of the total capital
investment in the facility, not to exceed ten million dollars per facility.

(
2)
To qualify for the credits provided for in subsection (E)(1):

(
a)
the operator must obtain certification from the Department of Environmental Services
that the site meets the definition of a brownfield site or requires
environmental remediation;

(
b)
all environmental remediation must be completed in accordance with applicable
state and federal requirements and approved by the Department of Environmental Services;

(
c)
the data center facility must meet all requirements of this chapter; and

(
d)
the operator must apply for the credit within twelve months of commencing
commercial operations at the facility.

(
3)
Tax credits authorized pursuant to this subsection may be carried forward for
ten years from the year in which they are earned but may not be carried back to
prior taxable years.

(
4)
Tax credits authorized pursuant to this subsection are in addition to any other
tax credits, incentives, or economic development benefits for which the
operator may qualify under state law.

(
5)
The Department of Revenue, in consultation with the Department of Environmental
Services, shall promulgate regulations necessary to administer the tax credits
authorized by this subsection, including documentation requirements,
application procedures, and verification of eligible remediation costs.

(
6)
The total amount of tax credits issued under this subsection may not exceed
fifty million dollars in any fiscal year. Credits shall be allocated on a
first-come, first-served basis based on the date a complete application is
received by the Department of Revenue.

(
F)
(
1) The office shall establish
reasonable buffer requirements for a particular proposed location, including
those for environmentally sensitive areas, based upon site-specific factors
including, but not limited to:

(
a)
the nature and sensitivity of adjacent environmental resources;

(
b)
proposed mitigation measures;

(
c)
existing development patterns in the general area surrounding the proposed data
center; and

(
d)
engineering and operational considerations.

(
2)
The buffer requirements in the following environmentally sensitive areas are
presumed to be reasonable:

(
a)
one-half mile, or less depending on mitigation measures employed, from national
wildlife refuges and heritage preserves;

(
b)
one-quarter mile, or less depending on mitigation measures employed, from a
critical habitat for endangered species; and

(
c)
the distance imposed by state and federal permits for wetlands.

(
3)
The required buffers may include, but are not limited to, setbacks, vegetative
screening, and operational controls rather than requiring uniform distances.

S
ection
49-35-60
.
(
A) The Public Service
Commission shall have jurisdiction over:

(
1)
all rates charged by utilities to data center operators;

(
2)
agreements between utilities and data center operators regarding electrical
service, infrastructure cost recovery;

(
3)
the determination of appropriate cost allocation methodologies that protect
existing ratepayers; and

(
4)
approval of utility infrastructure investments undertaken to serve data
centers.

(
B)
(
1) The commission shall encourage on-
and off-site energy efficient practices from data centers to reduce system
peaks including, but not limited to improvements to power usage effectiveness
(PUE) metrics, on- and off-site generation, energy storage resources,
weatherization, load flexibility, demand data center-funded demand response
programs, and energy efficiency technologies.

(
2)
Data centers achieving superior energy efficiency, a PUE below 1.3, may receive
preferential treatment in rate agreement approval.

(
C)
The commission shall approve rate agreements that ensure data center operators
bear reasonable infrastructure costs to ensure that the directly attributable
cost of providing electrical service to data centers is not borne by
non-participating customers while providing flexibility in rate structures and
cost recovery mechanisms. Acceptable rate structures include, but are not
limited to:

(
1)
traditional cost-of-service rates with separate accounting for data center
infrastructure;

(
2)
upfront infrastructure contributions with ongoing service rates reflecting
operational costs;

(
3)
hybrid approaches combining partial upfront contributions with rates including
infrastructure cost recovery;

(
4)
minimum contract obligations guaranteeing sufficient minimum revenue to
utilities to cover fixed costs based on load requests made by data center
operators;

(
5)
graduated rate structures with lower initial rates increasing over time as
infrastructure is amortized; or

(
6)
other approaches proposed by utilities and data center operators that satisfy
ratepayer protection objectives.

(
D)
(
1) The commission shall establish
expedited approval procedures for rate agreements that:

(
a)
demonstrate that no cross-subsidization will occur;

(
b)
include adequate financial assurances; and

(
c)
meet operational efficiency standards.

(
2)
Rate agreements shall be approved within sixty days absent material concerns.

(
3)
The commission may approve rate agreements subject to conditions working
collaboratively with parties to address concerns.

(
E) The
commission shall direct utilities to develop standard contracts for electric
service to the extent not already available for data centers that:

(
1)
provide predictable cost structures; and

(
2)
reasonably and fairly allocate the costs of dedicated facilities to data center
operators.

(
F)
(
1) Contracts for electric service must
ensure data center operators bear the fair cost of utility service including,
but not limited to:

(
a)
infrastructure costs directly attributable to serving the data center;

(
b)
appropriate allocation of fixed costs and capacity costs;

(
c)
costs of maintaining reliability for existing customers; and

(
d)
reasonable return on utility investments, if applicable.

(
2)
Starting with the next rate case after the effective date of this act, the
commission shall, after notice and hearing, evaluate whether existing cost
allocation methodologies are sufficient to ensure:

(
a)
economically sound and based on cost causation principles;

(
b)
fairness to both data center operators and existing ratepayers;

(
c)
transparency and predictability; and

(
d)
consistency with accepted regulatory practice.

(
G)
(
1) Utilities and data center operators
may structure infrastructure investments through:

(
a)
utility construction with cost recovery through rates;

(
b)
data center operator direct construction with utility ownership;

(
c)
third-party infrastructure development with service agreements;

(
d)
public-private partnerships; or

(
e)
other arrangements approved by the commission.

(
2)
The commission shall approve infrastructure approaches that protect ratepayers
while providing operators with flexibility and cost efficiency.

(
H)
(
1) Data centers may utilize
self-generation or private power purchase agreements with the utility that has
site jurisdiction. The commission shall establish reasonable interconnection
requirements and standby service charges that:

(
a)
reflect actual costs of providing backup service;

(
b)
avoid penalizing self-generation; and

(
c)
ensure grid reliability and safety.

(
2)
Interconnection review shall be expedited using established IEEE and industry
standards.

(
I) In
reviewing agreements between utilities and data center operators regarding
electrical service and infrastructure investment, the commission shall require
that the data center operators provide reasonable financial assurances
regarding their ability to discharge their contractual obligations. Financial
assurance amounts shall not exceed one hundred percent of unrecovered infrastructure
costs for investment-grade operators, with reduced requirements for operators
with strong credit profiles. Financial assurance may be reduced over time as
infrastructure costs are recovered. Multiple data centers operated by the same
entity may share consolidated financial assurance arrangements. The commission
shall accept one or more, or a combination, of the following as financial
assurance instruments:

(
1)
corporate parent guarantees for investment grade entities;

(
2)
letters of credit;

(
3)
surety bonds;

(
4)
escrow accounts; or

(
5)
other financial instruments acceptable to the commission.

S
ection
49-35-70
.
(
A) Tier 2 and Tier 3
data centers shall file with the office decommissioning plans. Tier 1 data
centers are exempt from the requirements in this section. The decommissioning
plans may be a general framework rather than a detailed plan, but they must
include:

(
1)
general procedures for facility removal;

(
2)
estimated decommissioning costs; and

(
3)
the timeline required to decommission the facility.

(
B) Tier
2 data centers and Tier 3 data centers, at the office's discretion based upon
site specific factors, must also file with the office financial instruments
providing decommissioning financial assurance. The amount of financial
assurance required pursuant to this subsection shall be equal to the estimated
decommissioning costs without multipliers. Decommissioning financial assurance
may be phased in over the first five years of the data center's operation.
Decommissioning financial assurance required pursuant to this subsection shall
account for the salvage value of the equipment and materials utilized by the
data center. The office shall accept one or more, or a combination, of the
following as financial assurance instruments:

(
1)
corporate guarantees for investment grade entities;

(
2)
letters of credit;

(
3)
surety bonds; or

(
4)
escrow accounts.

(
C)
(
1) Upon the cessation of operations,
data center operators shall:

(
a)
remove above-ground structures and equipment if the site is not repurposed for
similar use;

(
b)
restore the site to a condition suitable for future development;

(
c)
properly dispose of or recycle materials as required by environmental
regulations; and

(
d)
clean-up environmental contamination resulting from operations.

(
2)
Below-ground infrastructure including, but not limited to, foundations and
utility lines may remain if they are not creating safety hazards or
environmental concerns.

(
3)
If a data center site is sold for continued data center or similar industrial
use, decommissioning obligations shall be transferred to the new operator or
owner upon the office's approval.

S
ection
49-35-80
.
(
A)
(
1) Local governments retain full
authority over zoning, land use, building codes, and other related matters
within the jurisdiction of local governments. Therefore, data centers must
comply with local zoning and land use regulations. Local governments shall not
have any jurisdiction over electricity consumption, which shall remain the sole
responsibility of the Public Service Commission.

(
2)
Local governments may impose additional, reasonable requirements addressing
local concerns through the proper exercise of land use authority. However,
local governments cannot impose requirements that are more restrictive than
those imposed by this chapter relating to:

(
a)
operational efficiency standards; or

(
b)
state-level infrastructure adequacy determinations.

(
3)
The office shall coordinate with local governments but office permitting
decisions shall not be delayed due to local government zoning or land use
processes.

(
B) Local
governments shall undertake comprehensive data center planning and establish
clear data center development policies.

(
C) The
provisions contained in this chapter do not preempt local government land use
authority.

S
ection
49-35-90
.
(
A) Data centers shall
implement reasonable measures to minimize noise, vibration, and light impacts
on surrounding communities.

(
B)
(
1) Data centers shall comply with the
following noise level limits measured at the property boundary with residential
property:

(
a)
a maximum of 60 dBA Leq between the hours of 7:00 am to 10:00 pm;

(
b)
a maximum of 50 dBA Leq between the hours of 10:00 pm to 7:00 am.

(
2)
Noise limits contained in item (1) may be adjusted on a case-by-case basis
based upon:

(
a)
existing ambient noise levels exceeding standards;

(
b)
industrial zoning allowing higher noise levels;

(
c)
the distance from residential areas; or

(
d)
agreement with affected property owners.

(
3)
Noise monitoring shall be conducted:

(
a)
prior to the data center commencing operations to set a baseline;

(
b)
within six months of commencing operations; and

(
c)
every three years thereafter.

(
4)
Data centers shall install noise reduction measures as needed. Appropriate
noise reduction measures include, but are not limited to:

(
a)
acoustic barriers or enclosures for the loudest equipment;

(
b)
selection of lower-noise equipment where feasible and cost-effective;

(
c)
strategic building orientation considering nearest residential areas;

(
d)
vegetative buffers where practical; and

(
e)
regular equipment maintenance.

(
C)
(
1) Data centers shall minimize light
pollution while maintaining necessary security lighting through:

(
a)
limitation of outdoor lighting intensity to reasonable levels;

(
b)
the use of shielded, downward-directed light fixtures;

(
c)
the use of motion sensors and timers where consistent with security
requirements;

(
d)
interior window treatments to minimize light transmission during the night; and

(
e)
the use of warmer color temperature lighting where practical.

(
2)
Light standards shall not require lighting levels that compromise facility
security. Security lighting necessary for facility protection is exempt from
the restrictions in item (1).

(
D)
Data centers shall minimize vibration impacts on surrounding properties
through:

(
1)
installation of vibration isolation systems for mechanical equipment, cooling
systems, and backup generators;

(
2)
proper foundation design to prevent transmission of vibration beyond the
property boundary;

(
3)
selection of equipment with lower vibration profiles where feasible and cost-effective;

(
4)
regular equipment maintenance to prevent excessive vibration from worn or
imbalanced components; and

(
5)
structural engineering review to ensure adequate isolation from adjacent
properties and infrastructure.

(
E) Data
center operators and neighboring property owners and local communities may
enter into voluntary agreements addressing site-specific concerns. Light
restrictions in voluntary agreements that are different than the restrictions
imposed by this subsection shall govern the use of lighting at the facility
subject to the agreement.

S
ection
49-35-10
0.
(
A) The office may
require confidential information for review purposes but shall not publicly
disclose confidential information except as required by law. Confidential
information shall be clearly marked and filed under seal. The office shall
protect confidential information submitted by data center operators, and that
information shall not be subject to Chapter 4, Title 30, the Freedom of
Information Act. Confidential information that must be protected pursuant to
this section includes, but is not limited to:

(
1)
detailed facility designs and specifications;

(
2)
customer information;

(
3)
security plans and protocols;

(
4)
proprietary technology specifications;

(
5)
detailed operational data; and

(
6)
financial information qualifying for protection as trade secrets.

(
B) The
following information shall be available to the public and subject to Chapter
4, Title 30, the Freedom of Information Act:

(
1)
confirmation of compliance with operational efficiency standards;

(
2)
confirmation of compliance with environmental permits;

(
3)
aggregate annual energy consumption and water usage data reported by each data
center; and

(
4)
a summary of enforcement actions without proprietary operational details.

S
ection
49-35-110
.
T
he provisions contained in this chapter
are intended to supplement, not supersede, other environmental laws. However,
compliance with the provisions contained in this chapter satisfies any
state-level environmental review specifically addressing data center
operations. Data centers remain subject to:

(
1)
federal environmental requirements;

(
2)
air quality permitting;

(
3)
stormwater management requirements;

(
4)
wetlands protection requirements; and

(
5)
other applicable environmental laws and regulations.

S
ection
49-35-120
.
(
A) The office shall be
primarily responsible for enforcing the provisions contained in this chapter.
If another state agency is involved with a particular aspect of this chapter
that falls outside the office's jurisdiction, then the office and that agency shall
collaborate on enforcement. The office shall not have any jurisdiction over
electricity consumption, which shall remain the sole responsibility of the
Public Service Commission.

(
B) Enforcement
actions shall be proportionate to the severity of the violation and shall
consider a violator's good faith compliance efforts. When a violation occurs,
violators shall receive written notices of noncompliance stating the nature of
the violation with all relevant information related to the violation. The
notice of noncompliance shall also require that the violator submit a
corrective action plan. The violator shall have the opportunity to cure the
violation within a reasonable cure period before penalties are imposed unless
the violation is the result of willful misconduct on the part of the operator.

(
C) In
carrying out its enforcement authority under this section, the office may:

(
1)
issue notices of non-compliance with reasonable cure periods;

(
2)
require corrective action plans with reasonable implementation timelines;

(
3)
conduct inspections and audits with reasonable advance notice unless the
inspection or audit is undertaken or performed for cause;

(
4)
suspend or revoke a permit after an opportunity for a hearing on the matter if
the office finds that the violation is serious enough; and

(
5)
impose civil penalties.

(
D) First-time
violations of non-material requirements of this chapter shall result in a
written warning to the violator and not a civil penalty, loss or suspension of
permit, or other penalties.

(
E) When
assessing the appropriate civil penalty for a violation of this chapter, the
office shall take into consideration:

(
1)
the severity and duration of the violation;

(
2)
whether the violator undertook good faith efforts to comply despite the
violation;

(
3)
the economic impact of the violation;

(
4)
the violator's history of compliance with the provisions of this chapter;

(
5)
whether and to what extent the violator cooperates with enforcement of the
provisions of this chapter; and

(
6)
corrective actions taken by the violator.

(
F)
(
1) Civil penalties imposed pursuant
to this section shall not exceed:

(
a)
ten thousand dollars per day for Tier 1 data centers;

(
b)
twenty-five thousand dollars per day for Tier 2 data centers; and

(
c)
fifty thousand dollars per day for Tier 3 data centers.

(
2)
Penalties may be waived by the office if violations are cured within applicable
cure periods.

(
G) Operators
may appeal penalties imposed by this section through established administrative
appeals processes with stays of penalties pending appeal for non-willful
violations when the operator posts reasonable security.

S
ECTION 4. The
provisions of this act are prospective and apply to data centers for which
applications are submitted after the effective date. However, data centers
existing as of the effective date of this act are subject to the act's
provisions if they increase electrical load capacity by more than fifty percent
over the load capacity utilized as of the effective date of this act or
increase the data center's floor area by more than fifty percent.

S
ECTION 5. The
Department of Environmental Services shall promulgate regulations necessary to
implement the provisions of this act within one hundred eighty days of the
effective date of this act. Regulations shall be promulgated after industry
consultation through the advisory committee process.

S
ECTION 6. For
two years after the effective date of this act, the Department of Environmental
Services shall prioritize technical assistance and guidance over enforcement to
facilitate industry transition to the new requirements.

S
ECTION 7. If any section, subsection,
paragraph, subparagraph, sentence, clause, phrase, or word of this act is for
any reason held to be unconstitutional or invalid, such holding shall not
affect the constitutionality or validity of the remaining portions of this act,
the General Assembly hereby declaring that it would have passed this act, and
each and every section, subsection, paragraph, subparagraph, sentence, clause,
phrase, and word thereof, irrespective of the fact that any one or more other
sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases,
or words hereof may be declared to be unconstitutional, invalid, or otherwise
ineffective.

S
ECTION 8. This act takes effect upon approval
by the Governor.

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This web page was last updated on May 6, 2026 at 10:25 AM