Should New Hampshire restrict large data centers?

There are several bills in the New Hampshire House and Senate looking to add restrictions on data centers in New Hampshire. These server warehouses are essential for the expanded use of artificial intelligence (AI), but they come with high energy demand as well as potential environmental impact. At the same time, some policymakers are hesitant to single out specific industries in state law.

Proposals to change data center laws

There are currently four bills in the New Hampshire Legislature related to data centers. First, the Senate passed SB 439, which enables local planning boards to regulate data centers but does not impose any specific requirements. That bill now moves to the House.

Another bill, HB 1739, would establish tax incentives and grid modernization requirements to attract data centers. The Science, Technology and Energy Committee recently recommended the House kill the bill, since there were so many questions about how private businesses, utilities, and state and local governments would interact. 

Lastly, two other House bills have upcoming public hearings. HB 1265, which would establish a one-year moratorium on data center construction, has a public hearing February 11. HB 1724 would require utilities to report on costs and capacity related to data centers. The public hearing for that bill is February 10.

New Hampshire may or may not be ready for large data centers

All of these bills follow a law signed by Gov. Ayotte last year that might make New Hampshire more attractive to data centers, HB 672. That bill established a category of "off-grid electricity providers," who may provide electricity to people in-state so long as they do not connect to the regulated electric grid. The new law would allow a data center to install their own energy source (perhaps someday a small nuclear reactor) without the pain of lengthy permitting or high electricity prices.

It's indisputable that data centers require huge amounts of energy. In Virginia, for example, the Joint Legislative Audit and Review Commission found that data centers would almost triple energy demand in the state by 2040. That state is a popular location for data centers, according to the U.S. Census Bureau.

Other concerns around data centers include noise pollution from cooling fans. Large data centers can also pull huge amounts of water for cooling. If that water goes right back into a river, it creates thermal pollution. 

At a recent public hearing Rep. Wendy Thomas (D-Merrimack) testified, “I have been to several energy conferences over the year, and data centers are just a really hot topic. It’s not regional, it is nationwide. People are concerned about these industries, and we need to proceed with caution.”

A debate over local control

When it was first introduced, SB 439 included many specific zoning requirements for data centers. For example, the bill set noise limits for data centers within 300 feet of a residential district and required a landscape buffer. However, the Senate removed any specific restrictions from the bill. The amended bill states that local planning boards may adopt regulations on data centers, which would be allowed in commercial and industrial zones.

During the floor debate over SB 439, Sen. Debra Altschiller (D-Stratham) lamented, “This amendment removes all of the necessary components to protect our communities.”

Sen. Timothy Lang (R-Sanbornton) argued in favor of the bill, saying, “This is local control, not the state saying how wide the sidewalk is or how big the trees are.”

Some hesitance to add data center regulations

The NH Business and Industry Association (NH BIA) lobbied against the original version of SB 439 because it singled out a specific industry. DJ Burke, testifying on behalf of the NH BIA, noted, “Zoning and siting facilities of this nature is a local control option, and they do the same for other industrial uses, including manufacturing facilities, warehousing facilities, industrial sites of all types, without state intervention.” During the floor debate over SB 439, Sen. Tim Lang also noted that ski hills have huge energy demands for snowmaking but are not singled-out for statewide zoning restrictions.

At the same time, New Hampshire may be anticipating problems that are unlikely to materialize. While Sen. David Watters (D-Dover) supported a stricter version of SB 439, he also spoke on the Senate floor about the unlikelihood of a data center developer choosing New Hampshire.

“I don’t think we need to rush,” Watters said. “I think we’re going to be a bridegroom left waiting at the altar, in some ways, you know, we’re all ready but nobody comes.”

Share your opinion on data center regulations

If you have an opinion on how to regulate data centers in New Hampshire, reach out to your state representative. You will also have an opportunity to testify at public hearings for SB 439, HB 1265, and HB 1724. You can find tutorials on how to do that in the Citizens Count Advocacy Toolkit.