Florida Lawmakers Belatedly Begin to Grapple with Data Centers’ Burdens on Power and Water

Compared to some other states, Florida is late to the data-center game.

But with explosive growth in the use of artificial intelligence and other technology, Florida utilities, regulators and lawmakers are preparing for what could be an influx of data centers that would use massive amounts of electricity and tap water resources.

The state House Economic Infrastructure Subcommittee on Tuesday held a hearing that included testimony from a Florida Power & Light vice president and two data-center industry officials that focused heavily on energy use.

The hearing came after the Florida Public Service Commission last month approved an FPL rate settlement that includes addressing costs of adding electric infrastructure that would be needed for data centers. Duke Energy Florida has filed a proposal at the regulatory commission to address similar issues.

A key question has been how to make electric-system upgrades without saddling existing utility customers with costs.

The FPL settlement includes two sets of what are known as “tariffs” — which essentially detail types of rates — that are designed for such large energy users as data centers. One of those tariffs focuses on Southeast Florida’s Treasure Coast region, where FPL has significant infrastructure such as transmission lines.

Tiffany Cohen, FPL’s vice president of rate and regulatory strategy, said the utility is trying to be “proactive” because it knows such large customers are coming.

“We’ve tried to flip this and say we know we have to build new generation to serve these (large) customers, and they should be the ones to pay for it,” Cohen said.

Adding data centers is one of the biggest issues in the electric industry, with utilities taking steps that include restarting nuclear power plants to try to meet demands.

On Monday, NextEra Energy, the parent company of FPL, announced a partnership with Google Cloud to “develop multiple, new gigawatt-scale data center campuses with accompanying generation and capacity.” An FPL spokesman said the projects are not planned in Florida.

Florida has not seen the type of data-center development that has happened in states such as Virginia. But in recent months, proposals have emerged for data-center projects in areas such as Palm Coast, Palm Beach, St. Lucie and Polk counties and have sparked controversy. Palm Coast is permitting a data center in Town Center, but the city continues to refuse to disclose any regulatory information about it.

During Tuesday’s hearing, Rep. Anna Eskamani, D-Orlando, described public opposition to data-center projects as the “elephant in the room” and cited issues such as environmental concerns. In addition to questions about electricity use, data centers use large amounts of water for cooling purposes.

Supporters of data-center projects point to issues such as job creation and investments in communities. C.J. Maier, a senior vice president of Cielo Digital Infrastructure, which develops data centers, also told lawmakers that information cited by opponents about water usage is often outdated, as new technology has become more efficient.

It remains unclear whether lawmakers will address data-center issues during the legislative session that will start Jan. 13. But in June, lawmakers approved a tax package that included extending and expanding a sales-tax exemption for data centers.

–Jim Saunders, News Service of Florida