Understanding the Facts About the Proposed Data Center

Commissioner Jared Haddock recently attended a statewide conference on data centers in Utah with county commissioners from across the state. One of the conference’s key messages was that not all data centers are the same and that each proposal should be evaluated on its own merits. Speakers emphasized the importance of relying on facts and cautioned against misinformation as communities throughout Utah and across the nation consider emerging technologies and the growing demand for advanced computing infrastructure.

As companies search for locations across the western United States, Carbon County has become one of several communities being evaluated for data center development because of its available land, transportation access, energy resources, and opportunities for future infrastructure. One such proposal is currently being evaluated in Carbon County. Because projects like this raise many of the same questions in every community, the conference focused on topics such as water use, power supply, environmental oversight, and the local approval process.

Water Usage:
Water usage was one of the primary topics discussed. Modern closed-loop cooling systems use significantly less water than is commonly assumed. The proposed facility in Carbon County is expected to use less than 50 acre-feet of water annually, while a newer data center planned for Emery County is designed to operate without water for cooling.

Power Supply:
The proposed Carbon County data center, located between Wellington and East Carbon, is expected to generate its own electricity using natural gas rather than relying on the local electrical grid to meet its operational needs.

State Oversight:
Data centers are subject to extensive state oversight. Utah’s State Engineer oversees water rights and verifies how water is used and disposed of. The Utah Division of Air Quality oversees air quality permits and ensures facilities comply with state air quality regulations, including heat exhaust where required.

County Authority:
Another topic discussed at the conference was the role of local government in the approval process. Like all levels of government, the County Commission and Planning Commission are required to apply the law. If an applicant meets all applicable local, state, and federal requirements, the County does not have the authority to deny the project based solely on public opposition or policy preference.

Carbon County officials support the proposed data center because of its potential to bring significant new property value onto the tax rolls. Over the past several years, the county has experienced substantial losses in taxable value following the closure of coal mines, declining mineral lease revenues, and the retirement of the Carbon Power Plant. As those industries disappeared, a greater share of the local property tax burden shifted to homeowners and businesses. Adding new commercial investment would help broaden the county’s tax base and reduce that burden.

While expanding the tax base is one part of the County’s long-term financial strategy, county leadership has also worked to strengthen the county’s financial position by aggressively paying down debt while limiting new long-term borrowing except for projects funded through outside sources. Attracting new industry remains a priority to help restore the county’s economic base and reduce the tax burden on existing taxpayers.

If the proposed data center and two additional prospective industrial projects are completed as anticipated, county officials estimate property tax bills could be reduced by as much as 50 percent. Actual tax impacts will depend on the final value of the projects and future tax rates.

Non-Disclosure Agreements (NDAs):

Many residents have asked why the County Commission signs Non-Disclosure Agreements (NDAs) with prospective companies. These agreements are required by the companies involved, not by the County Commission, and are intended to protect confidential business information during the evaluation process. Without these agreements, some companies would choose not to explore projects in Carbon County.

A recent example illustrates why these agreements are important. While one company was evaluating Carbon County under a long-standing NDA, a competing company also began exploring opportunities in the area. Had the County disclosed the first company’s interest, it could have compromised that company’s competitive position and undermined the trust placed in the County. By honoring the NDA, the County allowed both companies to evaluate Carbon County independently while protecting each company’s confidential business information.

County officials recognize the community’s interest in these projects and remain committed to sharing information as soon as they are legally and ethically able to do so. Until then, commissioners will continue answering questions and providing factual information that can be shared publicly as these projects move through the evaluation process.