Committee reviews draft data-center rules: review windows, thresholds, reporting and billing debated

A legislative committee reviewed proposed changes to draft legislation aimed at regulating data-center development, debating longer local review windows, thresholds for utility cost allocation and new reporting and billing requirements but taking no vote.

Cassidy Murphy, a staff member who walked the panel through edits to the draft, said the bill preserves existing definitions and lengthens local review times in section 48 52 5 20: "That's going to be 120 days for the local government to review, 150 days for a tier 2 application, and 180 days for a tier 3 application." She also confirmed the draft removes a clause that had allowed an application to be deemed approved if a local government missed a deadline, a change Murphy said stakeholders requested to avoid automatically granting waivers to counties that may struggle with the new requirements.

Murphy told members the draft removes nondisclosure language and adds a new reporting provision: permitted data centers would be required to annually report the prior 12 months of water use to the Department of Environmental Services, and the bill includes "a civil penalty of $10,000 for each day after January 31 that that report is not filed," she said.

The committee spent substantial time debating what load threshold should trigger certain utility-related requirements. A co-op representative, John, urged a 20-megawatt cutoff, saying industry and federal recommendations are converging on that level: "20 megawatts is where you start to see system risk incurred that is outsized compared with other folks," he said, arguing the threshold aligns with Department of Energy and Federal Energy Regulatory Commission concerns about transmission and system reliability.

Several lawmakers pushed back, saying a 20-MW threshold could exempt smaller data centers that still shift costs to other ratepayers and urged the committee to consider a lower breakpoint or clearer alignment between tiers and billing obligations. Lawmakers also debated whether data centers should be treated differently than other large industrial loads and whether lowering thresholds could unintentionally capture ordinary server rooms or manufacturing sites.

On contract terms, Murphy said the draft calls for at least a 15-year contract term and would set a minimum billing requirement that bills 75% of contract demand regardless of actual usage. Several legislators asked whether 75% is too low and proposed considering a higher floor to protect ratepayers; utility and economic development representatives warned that steeper minimums could affect the state's competitiveness for data‑center investment.

Murphy outlined procedural mechanics in the draft: contracts would be filed with the Public Service Commission, which would have 60 days to determine whether a contract meets the act's requirements; the draft also directs utility boards and co-op trustees to review contracts to protect ratepayers. The text would subject projects already substantially in development to the law if they increase electric load capacity by more than 10 megawatts after the act's effective date.

Members asked stakeholders — including the Association of Counties and county planning officials — to offer zoning language and clarifications on who holds siting authority if nondisclosure agreements are restricted. The chair urged the group to continue working through the week and share a cleaner draft, then adjourned the meeting after a motion to adjourn was moved and seconded.

Next steps: stakeholders will submit zoning and technical amendments and the committee plans to reconvene; the panel did not adopt the bill or take final action during this session.