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TECHNOLOGY

Republicans push back on proposal for statewide data center moratorium 

Democratic lawmakers plan to propose temporary ban on data centers in upcoming session

Reps. Angelica Rubio, D-Las Cruces, left, and Micaela Lara Cadena, D-Mesilla, present to the legislative Science, Technology and Telecommunications Committee on Tuesday in Socorro. The two lawmakers plan to propose legislation in the upcoming session that would put a moratorium on data center development in New Mexico.
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A proposal by state Democratic lawmakers to place a moratorium on data centers got its first hearing Tuesday. Republicans were skeptical of the idea.

Two Democrats from Doña Ana County told members of the legislative Science, Technology and Telecommunications Committee that they will introduce a bill placing a statewide moratorium on data centers in the upcoming session, which begins in January. 

Reps. Micaela Lara Cadena, D-Mesilla, and Angelica Rubio, D-Las Cruces, said at the hearing that such a moratorium would allow New Mexico to pause data center development while officials set parameters around it. 

They cite Project Jupiter, one of the largest data center projects in the nation, as the reason for the proposal. Oracle Corp., a multinational technology company, and OpenAI, developer of ChatGPT, are backing Project Jupiter in Doña Ana County. 

The project has inflamed debate about whether a state lacking in water and electricity should invite Big Tech to build server farms that need millions of gallons of water and thousands of megawatts of electricity to operate.

But Republicans pushed back against the notion that data centers will cause more harm than good for New Mexico, citing jobs, investment and market realities. Oracle in late July said is on pace to create 7,000 construction jobs and 1,500 “ongoing project-supported jobs once construction is complete.”

As of July, the project has delivered $80 million in tax revenue for state and local governments, Oracle said. 

Republican Rep. Joshua Hernandez of Rio Rancho asked the panel where, if data center development halts, Americans would get their cat pictures. He said so in jest, to prove a point that everyone relies on data centers — from storing photos of their children to making telehealth appointments.

“Data centers are going to be a thing, with AI here and machine learning here,” Hernandez said. “They are going to be built. I just don’t want New Mexico to be behind the curve and miss the bonus on all of the investment that could be great for our state.”

While Republicans argued the technology is here to stay, Lara Cadena said that’s no reason to “roll out red carpets for data centers.”

Lara Cadena noted that communities across the country are turning to such moratoriums to halt data center development. In New Mexico, the counties of Santa Fe, Sierra and Socorro have placed moratoriums on data center development spanning a year to 18 months. Bernalillo County adopted a resolution to create guardrails around data center development.

Those moratoriums were created as artificial intelligence companies race to establish dominance in the fledgling but growing AI market. To do so, they need computing power. But government regulations have not kept up with the race.

Lara Cadena told lawmakers that they are not expecting to create a permanent data center ban, but rather a moratorium that would give lawmakers time to answer some of the thorny questions they present.

For instance, will Project Jupiter, with its proposed 2.5-gigawatt microgrid composed of cells fueled by natural gas, have to comply with the state’s Energy Transition Act?

Rubio argued that the Doña Ana County Commission was not transparent when it approved Project Jupiter last fall. In September, commissioners Project Jupiter $165 billion in industrial revenue bonds — which allow developers to avoid paying certain taxes over the life of a project — to help with financing development costs.

“It is time, in our opinion, to pump the brakes on data centers in New Mexico,” Rubio said. “Project Jupiter, and the way it has been forced on our communities, is exactly the example of why the state needs a moratorium.”

Sen. Nicole Tobiassen, an Albuquerque Republican, said lawmakers “need to do more work” on fact-gathering before legislation is introduced. She called on the inclusion of Project Jupiter’s officials — as well as the Senate Republican caucus — into discussions about the proposal. 

Sen. Jay Block, R-Rio Rancho, called for a formal economic impact statement on how many jobs, investment and tax revenue would be lost during a data center moratorium. He said the cannabis industry and golf courses are heavy water users, too.  

“We do care about the environment,” Block said, before pointing to Meta’s Los Lunas data center. “The air quality has not been degraded because of Facebook.”

Justin Horwath covers tech and energy for the Journal. You can reach him at jhorwath@abqjournal.com.