You've probably been hearing a lot about data centers. The issue is complex, and the concerns are mounting. There's a lot of information out there, and if you live in Southern Nevada and you've been wanting to learn more about what data centers are but don't know where to begin, this series is for you.

All week long from Sept. 7-11, KTNV climate reporter Geneva Zoltek and I are taking a look at the state of data center development and regulation in Southern Nevada, in our series we're calling "Data vs. Desert." Tune in for our daily reports on Good Morning Las Vegas and later editions of Channel 13 News.

Today, let's start with what are data centers, why here and why now?

Data centers, while a hot-button issue now, have actually been around for years.

You've probably driven by Switch, just off the 215 in the southwest Las Vegas valley. It's the largest data center campus in Southern Nevada. Switch has around a dozen data centers in Southern Nevada and counting and it's been around here since the early 2000s. Google's Henderson data center was built in 2019. Those two are perhaps the more recognizable names around, but they're not the only data center players here, and more are looking to set up shop in Southern Nevada.

Market intelligence and advisory firm Baxtel counts about 75 data centers currently operating in Nevada, divided largely between the Reno and Las Vegas areas, with more in the works.

So what are these giant, nebulous facilities? Traditional data centers are typically server warehouses, storing everything from corporate databases and financial records to your personal cloud photos and videos.

IBM notes the new AI-tailored data centers we're starting to see more of do bear some similarities to conventional ones, in that they also house hardware like servers, storage systems and networking equipment. However, the workloads are much different. These AI facilities demand complex cloud computing capabilities, and that means advanced storage, networking, energy and cooling. So AI data centers are often much larger and can be more resource-intensive.

Data centers not only vary by function, but also by how they operate. Hyperscale data centers are exactly what they sound like; they're essentially data storage on a huge scale, and those can often better support AI workloads. Colocation is when companies rent out space in hyperscale data centers for their data storage and computing, allowing a company to have those benefits without the cost of building and maintaining their own standalone structure.

Southern Nevada is home to a variety of data centers. We tried to simply get a look inside a local data center, but struggled to even get a response from several data center companies operating in Southern Nevada. Experts describe it as an "opaque" industry that we're still trying to learn more about, but transparency is an ongoing challenge.

Data centers and the desert seem like two things that just don't go together, but Nevada has been largely welcoming them in for years now.

We sat down with Erik Henzl and Sean McKenna with the Desert Research Institute to find out what makes Nevada attractive to data center developers, especially at a time when so many locals feel these developments just don't belong here.

"Available and cost-competitive land and energy are huge factors that attract data centers," Henzl said. "Nevada has tax abatements as well, so 75% off of personal property taxes for 10 or 20 years, contingent upon approval from the Governor's Office of Economic Development, and smaller sales tax abatements as well."

According to the Governor's Office of Economic Development, data center developers can get their sales and use taxes reduced to as low as 2% for up to 10 or 20 years on qualified capital equipment purchases, pending two-thirds approval by the GOED Board.

The larger incentives, though, involve personal property, as the DRI scientists mentioned. Data centers can get up to 75% off personal property taxes over a maximum of 10 or 20 years. Under a 10-year abatement deal, the data center must employ 10 full-time NV resident employees within five years, pay at least 100% of the statewide average wage, and invest at least $25 million in cumulative capital expenditures between the applicant and tenants. Under a 20-year abatement deal, the data center must employ 50 full-time NV employees, pay at least 100% of the statewide average wage and invest at least $100 million in cumulative capital expenditures.

In order to qualify for those abatements, the data center must maintain business in Nevada for 10 years, offer medical insurance and pay at least 65% of the insurance premium costs, and ensure that at least half of the workers building the data center are NV residents.

Along with the tax incentives, Henzl also mentioned that Nevada's proximity to the Bay Area is another draw for data center developers, particularly to the Reno-Tahoe area, which has seen a boom in data center development.

"High-bandwidth fiber optics from Northern Nevada to the Bay Area makes it very attractive," Henzl said.

With these perks, there's been a proliferation here in recent years.

"Suddenly realized we were one of the top five data center areas for growth in the country, and really I don't think anyone had made much noise about it a year ago," McKenna said.

Since data centers have been around for a while, why are they suddenly getting so much attention now? It's because we're seeing more projects being proposed here and across the country and large ones, at that.

Artificial intelligence is a huge driving force behind that push, as more complex technology demands more advanced data storage and processing.

According to a nationwide survey by Gallup and Telescope, 99% of Americans use at least one product with AI features weekly. Yet 7 out of 10 Americans say they oppose the construction of AI-specific data centers in their area.

It's a complicated contradiction. Think about it AI has become a part of our daily lives, whether we're aware of it or not. Google now often provides an "AI overview" at the top of your search results page. My local doctor's office uses a virtual AI assistant to schedule my appointments, even simulating background office chatter and typing sounds to mimic a real doctor's office environment.

AI is ubiquitous now, and not only is it driving rapid data center development, but also a different type of data center one that requires far more than the ones that were built decades ago, particularly when it comes to energy.

"So 10 years ago, let's say a 5 to 20 megawatt facility was more standard, and today we're seeing more and more of these hyperscale facilities for the large workloads of cloud computing and AI. So these hyperscale facilities are around 100 megawatts or larger, potentially much larger," Henzl said.

"I think we've seen some being planned now on the order of 4,000 megawatts, which is astronomical size," McKenna added.

With the nature of the data centers we're seeing built rapidly changing, and what they demand evolving, that leads us into the next portion of our coverage: water the most common concern we hear about from locals in the Mojave Desert when it comes to this topic.

More data centers mean a growing need to keep more servers and equipment cool. How do you balance that with a precarious water situation in the desert southwest?

As our "Data vs. Desert" series continues, on Tuesday, Sept. 8, Geneva Zoltek will show you some of the biggest data center water guzzlers in our community, the policies in place to protect our water, and who's getting creative with cooling.

The ever-expanding issue of data centers has emerged in the race for Nevada attorney general, with one candidate calling for greater regulation of the industry.

State Sen. Nicole Cannizzaro, D-Las Vegas, has requested a 2027 bill draft from the Legislative Counsel Bureau to regulate data centers, saying the industry needs guardrails to protect the public.

"This is really focused on consumer protection because that is the job of attorney general and making sure that Nevadans are not being taken advantage of as we see more and more of these data centers become topics of conversation," Cannizzaro said.

Although one of the largest data centers Switch has operated in Las Vegas for years without controversy, residents at both ends of the state have called for a moratorium or stronger rules for new data centers.

The issue has surfaced in Boulder City, Henderson, Pahrump and Reno, among other places.

Cannizzaro says her bill would:

"We have a duty to set up guardrails to protect Nevadans," Cannizzaro said. "Again, that is the fundamental job of the attorney general's office, and there are lot of things we can do."

Cannizzaro's Republican opponent, former chairwoman of the Cannabis Compliance Board, has a different approach to the issue.

Although Channel 13 has tried for weeks to get an interview with Guzman Fralick, her campaign has not made her available.

But in an April interview with Sam Shad on his show "Nevada Newsmakers," Guzman-Fralick said data centers are a source of badly needed tax money for local governments, and that they enjoyed the support of Gov. Joe Lombardo.

"Well, a lot of our counties are counting on that, right? It's a huge revenue generator," she said.

"So I think we just have to, we have to go with it. And just, you know, go. Roll with the punches, but, but you know, make sure that we just have the infrastructure and we sure, and make sure that all of our leaders are on the same page," she added in the interview.

Asked for a comment on Cannizzaro's bill, Guzman-Fralick campaign spokesman Keith Schipper released a statement that reads, "We question whether pieces of this BDR would be accepted by legislative counsel as they may fall outside the scope of the Attorney Generals office, but perhaps State Senator Cannizzaro is intending to submit this bill when she is back in the legislature next year. Adriana supports Governor Lombardos stance on data centers and will enforce all Nevada laws fairly and as they are written."

If Cannizzaro were to be elected attorney general, she'd have to give up her seat in the state Senate, and her ability to introduce bills as a lawmaker. But under state law, she could as attorney general request a data center bill during the 2027 session.

The Legislative Counsel Bureau has take an expansive view of legislative authority in bill drafting in the past.

Cannizzaro said she is most definitely not on the same page with Guzman-Fralick's hands off approach to data centers.

"The attorney general has to be ready to fight for everyday Nevadans, and, frankly, I think that's something that definitely differentiates me from my opponent," Cannizzaro said. "You know, she is completely unwilling to stand up for Nevadans in this fight, she has said we have to roll with the punches and just go with it, and accept whatever big tech and AI is going to come into the state of Nevada and say to Nevada families. And, frankly, if she's too weak to stand up to big tech, then she is too weak to be the attorney general."

The data center issue has also come up in the race for governor, where Democratic nominee and current Attorney General Aaron Ford has pledged to temporarily halt all tax breaks for the centers until an audit determines if they are complying with the law.

Ford himself co-sponsored the bill in 2015 that created the tax breaks in the first place, although he notes that was long before the AI boom created a need for scores of new data centers.

Do you have a question about Nevada politics? Ask Steve at Steve.Sebelius@ktnv.com, or by clicking on the banner below.

Nevada lawmakers are planning to introduce a bill during the next legislative session that could repeal tax breaks for data centers.

Work session documents from the Joint Interim Standing Committee on Revenue show State Sen. Dina Neal, the JISC Chair, requested a bill be drafted to repeal portions of state law that allow partial abatements of certain taxes imposed on new or expanded data centers, as well as a moratorium on the creation or expansion of any data centers in Nevada.

When looking at current state law, NRS 360.754, some of the stipulations to receive abatements include hiring certain numbers of Nevada residents to build and work at the data centers and investing capital assets into those projects.

According to Neal, there are 66 data centers in the state of Nevada and there are 22 that could come online.

Neal said her concerns come down to two main issues: financial needs and water.

"These are billionaire investments and there is no actual need for them to continue to have a partial abatement of taxes for a data center that they can afford to pay for themselves," Neal said. "Information was put into the record saying that certain data centers have adapted qualities where they are using less water. That is not all. Right? If you're familiar with the Growth and Infrastructure hearing when Assemblyman Howard Watts was the chair, there was information put out there around legacy data centers and how much water usage they are actually using. It was significant and substantial. Water is not something we can get back. It is not something that we can recreate."

Neal said others have voiced concerns about data center electricity usage and possible pollution.

"I have reviewed DRI [Desert Research Institute research], which was challenged by the data centers to say, 'Oh. You know. That wasn't necessarily good research.' I rebuffed that comment because I was just like if we're at the stage where we're now trying to say that a publicly-funded research institution in the State of Nevada is putting out bad research, I take issue with that," Neal said. "I was like so now we're doubting the scientists who actually earned a degree and have successfully been the research institute in the state."

State Sen. Fabian Doate said he was also concerned about security issues that data centers could create.

"The need for compute and the race for artificial intelligence is becoming more prevalent. However, I, at the same time, am very worried about foreign influence and the conversion and expansion of foreign-owned assets that utilize our natural resources. There have been cases here in Nevada that have used or have converted crypto mining facilities to now become data centers," Doate said. "I think there are, obviously cases and companies, including Switch and TensorWave that are leading the way in how we can really make this a better, efficient ecosystem. And so, my only comment is that for anyone that's watching, all I would ask is that within the next couple of months, for the industry partners to work alongside the legislators, both on this committee and beyond, because I think there could be a balance to protect consumers."

Assemblymembers Lisa Cole and Jason Patchett were the only two committee members who voted against the bill draft request. Cole said there are sufficient guardrails in place to protect Nevadans without resorting to a statewide moratorium.

"Nevada, to me, is positioned right now to win the lottery and one of the largest drivers of economic growth in the world. I'd instead support a well-crafted piece of legislation directing local jurisdictions to negotiate development agreements and continuing the existing subsidies as long as we hold them to the highest standards on water conservation and grid buildout so these costs never land on ratepayers," Cole said. "The governor's office has landed on that same side, having signed the ratepayer protection pledge. If a company wants to build here, it brings its own power and water solutions. The PUCN's Rule 9 already requires large loads to fund their own infrastructure and this technology keeps improving."

Cole also stated the Southern Nevada Water Authority and the Nevada State AFL-CIO have rules in place regarding data centers.

"When labor and the governor's office agree on the guardrails, that tells me we're closer to the right answer than a moratorium allows," Cole said. "Nevada already has strong statutory guardrails, wage floors, capital thresholds, resident hiring rules, and clawbacks. I'd rather modernize that framework than shut the door on an industry already supporting tens of thousands of Nevada jobs and creating real revenue streams for our local jurisdictions."

During the last public comment session, Storey County Commissioner Clay Mitchell said they are taking a "modernization approach to abatements" on a jurisdictional level.

According to Mitchell, 8,000 to 10,000 trade workers are working daily at the Tahoe-Reno Industrial Center. He said in addition to providing thousands of jobs, hundreds of apprenticeships have also been created, which are providing learning opportunities on these longer projects.

"It gives them stability and longevity. It allows them to really settle into the communities, which is pretty unique for the construction industry," Mitchell said. "The last thing that we would want to see is this prosperity grind to a halt."

The Interior Department is pausing the Bureau of Land Management's plans to allow a data center to be built near Boulder City.

On Tuesday, the Interior Department's Board of Land Appeals issued a stay, in favor of Boulder City and environmentalists.

According to the new filing, Townsite Solar 2 LLC was granted a right-of-way (ROW) in 2023, which authorized the company to build a solar power plant with a battery storage system on BLM-managed land. To satisfy requirements with the National Environmental Policy Act (NEPA), BLM studied the potential environmental impacts of the power plant.

Townsite Solar 2 had originally planned to build a data center on a parcel of land near Interstate 11 and U.S. 95. However, the company withdrew its application due to public backlash and concerns from Boulder City officials.

That's when company officials approached the BLM to change their ROW for the same site but instead of building a solar power plant, they requested authorization for a data center including computer servers, network equipment, and a battery storage system twice the size of the proposed power plant's.

"BLM did not study the effects of the data center project in a new or revised EA," filings read in part. "BLM determined the data center is 'essentially like' the solar plant project and that it would have 'similar anticipated impacts.'"

According to the Interior Department, those projects are not "substantially the same."

"CBD [Centers for Biological Diversity] has demonstrated that permanent and irreparable harm is likely to occur to its members' aesthetic and recreational interests in the project site, and those harms outweigh the temporary financial harm to Townsite from the delay," filings state. "Furthermore, the public interest in the timely development of data center infrastructure does not outweigh the benefits of a thorough and open consideration of the potential environmental effects of that development, as NEPA requires."

In July, city officials and Boulder City residents pushed back against plans for the data center.

"I don't know in any world how they could have made the statement that that project is in any way similar to the original solar energy production and battery energy storage application that they did the NEPA for in 2023," councilman Steve Walton said. "This is absolutely out of line, just ridiculous. I don't know how they could even come to that conclusion."

"This was never a good faith negotiation," resident Grant Turner said. "They had a gun to our heads at all times. ... I recommend that we fight them tooth and nail."

Opposition to data center development is growing not just in Southern Nevada, but across the country with new polling showing 7 in 10 Americans oppose building data centers in their communities.

Public outcry is now forcing candidates in key midterm races to take a stand on the issue. For example, Republican Gov. Greg Abbott in Texas is putting a freeze on new data centers, and in Pennsylvania, Democratic Gov. Josh Shapiro is imposing new restrictions on them.

In Southern Nevada, locals have voiced strong concerns about how they want to see the AI tech boom reined in. Water and power are among the biggest concerns.

Nye County recently decided to implement a ban on data centers. No other county-wide moratoriums are currently in place in the Silver State, but the legislative session is approaching as are the midterm elections and public pushback and demand for action may be driving voter decisions at the polls in just a few months.

It's already on the minds of some of the top statewide candidates.

Attorney General Aaron Ford announced last week a Data Center Accountability Agenda, which would include a pause on tax breaks for the facilities if he is elected to the governor's seat in November.

Gov. Joe Lombardo has shown support for data centers, writing on X that they bring jobs, investment and economic growth to Nevada.

The Nye County Board of Commissioners voted to ban data centers in the Pahrump area and Water Basin 162 during its meeting Tuesday night.

The board will also meet Sept. 14 to discuss a development agreement for anyone trying to build a data center outside of the banned area. That will happen during a special meeting.

However, the board did not approve a special election to put a vote up for the people to decide themselves. That topic died without a motion.

That decision came nine hours into a county commission meeting Tuesday, where more than 100 people turned out, mainly voicing strong opposition to data centers in the area.

The meeting, which began at 10 a.m. and lasted more than nine hours, was a continuation of a previous meeting from earlier this month that had been delayed.

Pahrump resident Toni Hoverman was removed from the meeting after making a comment directed at the board.

"This data center goes in and there's going to be an automatic 30,000 people pissed, and I don't know how many of them carry. I'm just letting y'all know that," Hoverman said.

The outburst prompted a response from Nye County chairman Ron Boskovich.

"Is that a threat, ma'am? You can leave now, goodbye. Another threat. Sheriff, please keep track of these folks that are making threats," said Boskovich. "What the hell is wrong with you people?"

The board was set to discuss and possibly vote on three data center-related items: a proposal to ban data centers outright, a measure to put the future of data centers before voters in a special election, and to develop rules and regulations for developers who attempt to build a data center in the future.

Hundreds of people attended in person and over the phone to share their opposition to data centers in the county. Pahrump resident Kelly Stillwell summed up the sentiment of many in the crowd.

"If we do the data center thing, we're all going to be moving," Stillwell said.

Not everyone at the meeting was against data centers, though. William Grubel pushed back on the idea that opposition was universal.

"When they stand up here and say nobody wants it, I'm here to tell you that's not true," Grubel said. "There are a lot of people scared away from this meeting."

We will continue to follow all new developments regarding Nye County data centers and any decisions that come associated with them.

The city of Henderson is working on a development agreement to regulate any future data centers as residents continue to raise concerns about water use, energy consumption, increased heat and public health.

We told you earlier in July that there is currently no pause on data centers coming to the city, and Henderson leaders say there are no active applications to bring data centers to town. However, city leaders are creating a development agreement outlining rules for when centers do arrive. Henderson is expected to add that agreement to city code at next week's City Council meeting, though the contents are still being finalized.

Teresa Bell has lived in Henderson for 30 years. She says her favorite part of the city is its natural spaces.

"I love all the parks and the trails and the programs that we have for everybody," Bell said.

Bell believes that nature could be at risk if a data center came to the city.

"I don't see that there's any reason why you would want to bring them here," Bell said.

She also raised concerns about health impacts.

"There's a lot of different things that just create health problems so that they just really can't be near where people live and work," Bell said.

Jeff Wald, a local resident who worked inside a data center for 18 years near Oakland, California, addressed several of those concerns.

On the question of heat, Wald said the impact may be more contained than some fear.

"The temperature will increase very very quickly, inside the data center? Inside the building. Outside the building? The people working in the rest of the office may not know that," Wald said.

On personal health, Wald said his own experience gave him little cause for concern.

"I may be a little bit heavy but who isn't, but I don't feel like my health was impacted," Wald said.

Both Bell and Wald shared their opposing thoughts during last week's City Council meeting.

Bell said she appreciates that the city is seeking input from residents as it develops the agreement.

"I do like that about the City of Henderson. I like that they want to communicate with the citizens and the Sierra Club," Bell said.

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