Nancy Mace Gives Critical Review of South Carolina Senate Bill 867: The Data Center Development Act… 

Today, I took a close look at South Carolina Senate Bill 867, known as the “Data Center Development Act,” which reveals a piece of legislation more insidious than its title suggests. The Legislature is doing what it always does. While initially appearing to be a framework for sensible regulation, a dissection of this bill illustrates it is a masterclass in corporate welfare while leaving the hardworking citizens of South Carolina to foot the bill and suffer the consequences.

867 is not a shield for the ratepayer as the language in the bill tries to suggest. It centralizes power in Columbia, silences local communities, cloaks its operations in secrecy, and offers staggering tax incentives to an industry hardly needing our charity.

 

Seven Flaws

1. A Bureaucracy Built for Data Centers and Developers

 

The bill establishes a “Data Center Development Office” within the Department of Environmental Services. Make no mistake: this is not a regulatory watchdog. The text explicitly tasks this office with “facilitating” the location of data centers and maintaining an “inventory of suitable sites.” It is a taxpayer-funded concierge service for tech giants, designed to grease the wheels of developers rather than scrutinize its impact.

2. Corporate Welfare – 867 authorizes up to $50 million per fiscal year in tax credits for data centers locating on “brownfield” sites. This includes a 25% credit on remediation costs and an additional 2% investment tax credit. The state will subsidize the expansion of some of the wealthiest corporations on earth.

 

3. The Illusion of Ratepayer Protection

 

The bill’s failure on ratepayer protection features nebulous, non-defined words and lots of ambiguity. It pays lip service to protecting existing utility customers, but a close reading of Section 49-35-60 reveals three statutory defects:

 

Undefined Key Terms: The bill states the commission “shall approve rate agreements ensuring data center operators bear reasonable infrastructure costs” and the “directly attributable cost” of providing electricity. However, “reasonable” and “directly attributable” are entirely undefined in the statute. This ambiguity provides a massive loophole for utility companies and data centers to negotiate sweetheart deals passing indirect or systemic costs onto the public.

 

No Prohibition on Bad Deals: The bill dictates what the commission shall approve, but it conspicuously fails to state the commission shall not approve agreements failing to meet these standards. Without an explicit, statutory prohibition forbidding the approval of non-compliant agreements, the “protections” are merely suggestions.

 

Prioritizing “Flexibility” Over Protection: The text repeatedly emphasizes providing data center operators with “flexibility in rate structures and cost recovery mechanisms.” This is legislative code for allowing tech giants to defer paying their fair share, socializing the upfront infrastructure costs while promising to pay it back later.

 

Hope is not a strategy, and vague guidelines are not ratepayer protections. Without explicit statutory language forbidding ratepayers from subsidizing these tech giants, ordinary South Carolinians will inevitably see their monthly bills rise.

 

4. Environmental Recklessness

 

The bill’s approach to environmental protection is egregious. It establishes “presumptively reasonable” buffer zones allowing data centers to be built a very short one-half mile from national wildlife refuges and heritage preserves, and a mere one-quarter mile from critical habitats for endangered species. Even these meager distances can be reduced depending on “mitigation measures.” It is an open invitation to industrialize our most sensitive ecological, environmental and wildlife treasures.

 

5. Secrecy by Statute

 

Transparency is the bedrock of good governance. Yet, S. 867 explicitly exempts vast swathes of information submitted by data center operators from the Freedom of Information Act (FOIA).

 

6. Grandfathering the Status Quo

 

The bill’s regulations are entirely prospective. Existing data centers are explicitly exempted from the new efficiency standards unless they increase their electrical load or floor area by more than 50%. Furthermore, the bill mandates for the first two years, the Department of Environmental Services must prioritize “technical assistance and guidance over enforcement.” It is a regulatory regime with no teeth, designed to give the industry a two-year holiday from compliance.

 

7. The Silencing of Local Communities

 

Finally, S. 867 represents a breathtaking assault on local control. While it claims to preserve local zoning authority, it simultaneously prohibits local governments from instituting operational efficiency standards or infrastructure adequacy determinations more stringent than the state’s. It mandates state permitting decisions “shall not be delayed due to local government zoning or land use processes.” It is a clear directive from Columbia: local communities must sit down, be quiet, and accept whatever development the state deems appropriate.

 

Suggestions Going Forward

 

The fundamental problem with Senate Bill 867 is it is structurally flawed from the foundation up, written as a promotional vehicle for the data center industry rather than a regulatory safeguard for the people of South Carolina. One could attempt basic improvements: strip out the egregious new tax credits, and insert explicit, ironclad prohibitions against ratepayers bearing the costs of infrastructure upgrades. But even those corrections may not be sufficient to rescue a bill built on sand. The entire legislation revolves around the creation of a “Data Center Development Office,” a taxpayer-funded concierge service whose sole purpose is to facilitate the expansion of data centers.

 

To fix this bill, one must eliminate the development office entirely, strip away the corporate welfare, and rewrite the framework to prioritize the protection of our citizens, our land, and our wallets. Anything less is simply managing the terms of our own surrender to a data center wasteland.

 

10 Recommended Amendments to S. 867

 

1. Add a strict definition to Section 49-35-10 ensuring “directly attributable costs” include not just immediate interconnection, but a proportional share of all necessary generation, transmission, and distribution upgrades required to maintain grid reliability.

 

2. Amend Section 49-35-60(C) to state: “The commission shall not approve any rate agreement or cost recovery mechanism resulting in the subsidization of data center infrastructure costs by residential, commercial, or traditional industrial ratepayers.”

 

3. Strike the language in Section 49-35-60(C)(5) permitting “graduated rate structures with lower initial rates.” Data centers must pay their full freight from day one.

 

4. Codify minimum 15-year service contracts with severe early termination penalties and upfront cash deposits for infrastructure upgrades, consistent with protections recently adopted by electric cooperatives.

 

5. Strike Section 49-35-50(E) entirely. The data center industry is one of the most profitable in the world; it does not require state subsidies to clean up and utilize industrial sites. If a site is economically viable, the market will dictate its development without taxpayer intervention.

 

6. Amend Section 49-35-100 to explicitly subject all data regarding water consumption, energy usage, wastewater discharge, and environmental impact mitigation to FOIA, and require the Department of Revenue to publish an annual public report detailing the exact dollar amount of all tax exemptions and incentives claimed by each data center operating in the state.

 

7. Strike Section 49-35-80(A)(2) and (A)(3), and add explicit language stating: “Nothing in this chapter shall be construed to preempt, limit, or restrict the authority of a local government to enact zoning ordinances, land use regulations, or operational standards more stringent than those established by the State.”

 

8. Increase minimum buffer zones to at least two miles from national wildlife refuges, heritage preserves, and critical habitats for endangered species, and strike the language permitting those distances to be reduced based on undefined “mitigation measures.”

 

9. Remove Section 6 entirely. The Department of Environmental Services must have the authority and the mandate to enforce the law immediately upon enactment.

 

10. Amend Section 4 to require all existing data centers to comply with the new water efficiency and noise and light pollution standards within a three-year phase-in period, regardless of whether they expand their footprint.

 

By adopting these amendments, the state legislature can improve S. 867 from a bill serving the data center industry into a law serving the people of South Carolina. True leadership requires standing up to corporate interests and ensuring economic growth never comes at the expense of the ratepayer, the taxpayer, or the environment.