Data center power supply and server racks. (Getty Images)
South Dakota has implemented new restrictions on data centers, following the rejection of incentive proposals by lawmakers. Governor Kristi Noem approved legislation that imposes limits on large data centers, focusing on their impact on local resources and infrastructure. New laws ensure companies handle their electrical infrastructure costs and prevent state interference with local data center regulations.
The law targets data centers with over 10 megawatts of electrical demand, mandating responsible water use. Another bill empowers the state Public Utilities Commission to charge data centers for regulatory reviews related to their projects.
These measures arise from a legislative session marked by debates over data center regulation. Attempts by economic developers to secure tax incentives, like a 50-year sales tax exemption, were unsuccessful. A failed bill sought to exempt large backup generators from state oversight.
Proponents argued that data centers could create jobs and boost local tax revenue, while critics highlighted concerns over water usage and potential impacts on public electricity rates. South Dakota’s largest data center uses up to 30 megawatts, with no larger facilities like those seen in other states due to AI and cryptocurrency growth.
This story was originally produced by South Dakota Searchlight, which is part of States Newsroom, a nonprofit news network which includes Daily Montanan, and is supported by grants and a coalition of donors as a 501c(3) public charity.
—
Read More Montana News
