(The Center Square) – A bill prohibiting data center operators from signing nondisclosure agreements with local governments passed the Energy Committee in the Pennsylvania House of Representatives on Wednesday.
As Democratic Rep. Joe Ciresi from Montgomery County has experienced in his district, at least some local governments are unable to inform their residents and communities of what or even who is coming to their backyards due to nondisclosure agreements with data center developers.
“Every one of us who lives in a community has a right to know who’s building next to us,” said Ciresi. “It doesn’t mean we stop what’s happening, but you have a right to know what is happening.”
Nondisclosure agreements are commonly used by large scale energy and manufacturing companies to prevent their information from leaking to competition while they research which areas will provide them with the best tax incentives and quickest permits. However these agreements often mean township supervisors cannot legally inform their constituents of even the most basic details related to what may drastically change the composition of their communities.
Proponents of data center development, however, see this piece of legislation as harmful to the economic growth of Pennsylvania and even hypocritical.
“These data centers are doing in our communities things that we were never able to achieve at all,” Republican Rep. Eric Nelson of Westmoreland County said, citing how data centers have been crucial in repurposing thousands of acres of abandoned land, generating vast amounts of property tax, and building and extending Pennsylvania’s water lines.
“This chamber has continuous meetings behind closed doors,” Nelson said. “Who are we in Harrisburg to say that they are not allowed to have nondisclosure agreements when we operate that way every day?”
Despite Nelson’s concerns, the bill passed 25-1, with only Nelson dissenting. Although Republicans on both federal and state levels have been generally supportive of data center development, the bill’s bipartisan support suggests both parties agree that these data companies must be able to be kept in check by those most affected by their placement.
Written into the tax code, the bill would retract any tax break or exclusions for noncomplying data centers.
Republican Rep. Craig Williams of Delaware County viewed this consequence as not much better than a tap on the wrist for hyperscale data center backers such as Google or Microsoft. For companies capable of building plants comparable in power to seven or eight nuclear power plants, William said more must be done for vulnerable communities.
“Hyperscale data centers will pay no attention to this, which is why we have some in that industry not even commenting on the bill,” Williams said. “I believe they’ll say, ‘Take your tax break. We’re good. We’re just not going to comply with any of your requirements."”
Instead, Williams proposed that legislators should focus on creating regulations that would make data centers bring their own power generation and pay for the increased infrastructure necessary to support their power demands, instead of leaving the bill for the community.
