Florida sets smart rules for data centers without stalling innovation

Here’s a number that should concern every Floridian: 5 million gallons. That’s how much water a single large data center can consume in a day—equivalent to a town of 50,000 people. Now consider that Florida already has 120 data centers, making it the fourth-largest data center hub in the country, with dozens more hyperscale projects planned for Tampa, Orlando, and Miami-Dade. And consider that Florida’s Department of Environmental Protection projects we’ll need 14% more water by 2040 just to serve our growing population.

Senate Bill 484, sponsored by Sen. Bryan Ávila and advancing unanimously through Committee after Committee, represents something rare in Tallahassee: a genuinely pro-business bill that also protects the people footing the bills. It deserves support and to be even stronger.

The cost question gets answered

The core principle of SB 484 is elegantly simple: large data centers should pay their own way. The bill requires the Florida Public Service Commission to develop tariff and service requirements ensuring that customers drawing 50 megawatts or more at a single location bear their full cost of service — including connection, transmission, generation, and infrastructure—and that those costs are not shifted to the general body of ratepayers.

This matters because across America, families are quietly paying more for electricity while Big Tech races to build the infrastructure powering artificial intelligence. Consumers served by the PJM grid stretching from Illinois to North Carolina will pay $16.6 billion between 2025 and 2027 just to secure power supplies for data centers that haven’t even been built yet. In Ohio, that translates to an additional $16 per month on the average household bill. One Carnegie Mellon study projects data centers could drive a 25% increase in electricity prices in northern Virginia by 2030.

Florida has the opportunity to avoid this entirely. SB 484’s toolkit is comprehensive: contributions in aid of construction, demand charges, incremental generation charges, financial guarantees, take-or-pay provisions, and minimum service contract requirements with early termination fees. These aren’t punitive measures. They’re standard utility industry ratemaking tools that ensure developers have skin in the game before ratepayers assume risk.

The water provision is the sleeper story

Electricity gets the headlines, but SB 484’s water protections may be the bill’s most consequential feature for Florida’s long-term future. The bill establishes a distinct permitting framework for large-scale data centers that draw 100,000 gallons or more per day, requiring them to demonstrate that their water use is reasonable, won’t interfere with existing users, and is consistent with the public interest. It mandates the use of reclaimed water when feasible and requires public hearings before permits are approved.

These provisions arrive at a critical moment. The era of cheap, easy water is over in Florida. Tampa Bay Water is in a dispute with Polk County over the Alafia River. Polk County is spending $600 million to drill into brackish aquifers because conventional supplies are exhausting. Water recharge areas across the state are being paved over for development, reducing the very infiltration that replenishes what we’re pumping out.

Into this landscape, a single hyperscale data center consuming 5 million gallons daily would be the equivalent of adding an entire mid-sized city’s water demand overnight. Nationally, roughly 80 to 90% of water used by data centers comes from blue water sources, the same lakes, rivers, and aquifers providing community drinking water. In Loudoun County, Virginia, home to the world’s largest data center hub, facilities consumed roughly 1 billion gallons of municipal water in 2023 alone. Google’s data centers globally consumed 6.4 billion gallons in a single year, with 31% drawn from watersheds already experiencing moderate to high water scarcity.

Florida cannot afford to repeat Virginia’s mistakes.

The bill’s requirement for reclaimed water and public hearings is a solid foundation, but I’d argue it should go further — mandating water conservation plans that include immersion cooling or closed-loop systems, which can reduce water consumption by orders of magnitude compared to traditional evaporative cooling.

Anti-gaming provisions show legislative sophistication

One of SB 484’s smartest provisions addresses a problem other states have overlooked: gaming the system. The bill explicitly prohibits customers from splitting electrical loads at a single location into multiple smaller connections to avoid the 50-megawatt threshold. It also captures colocation arrangements where multiple entities share a single facility. Without these provisions, large operators could entirely circumvent the protections.

The fact that Florida’s legislators anticipated this maneuver suggests a level of regulatory sophistication that should serve as a model nationally.

Grid priority during emergencies: Families first

Section 6 of the bill prohibits any tariff or utility policy from preventing the curtailment of electric service to large data centers during emergencies to ensure grid stability and public safety. For a state that routinely experiences hurricanes that knock out power for millions of residents, this provision is essential.

When Hurricane Ian devastated Southwest Florida, outages alone cost the state’s economy an estimated $5 billion. The North American Electric Reliability Corporation has warned that data center demand could trigger rolling blackouts during extreme weather events. When shortages hit, who gets cut first?

Fair policy requires large commercial users to bear the burden before residential customers. Homes stay lit while server farms cycle down. This isn’t punishing innovation. It’s prioritizing families during crises.

The foreign entity ban: National security meets state regulation

SB 484 prohibits utilities from knowingly providing electric service to large load customers that are foreign entities — defined as entities owned or controlled by governments of foreign countries of concern. Data centers process and store enormous volumes of sensitive information. Ensuring that facilities drawing 50 megawatts or more from Florida’s grid are not controlled by adversarial governments is a reasonable national security precaution embedded in state-level policy.

Where the bill could be stronger

SB 484 is strong legislation, but three areas deserve attention as it moves to the Senate floor.

First, the bill should encourage or incentivize on-site renewable generation paired with battery storage. Solar deploys in months; orders for new gas turbines face seven-year delays. When Meta built a data center in Aiken, South Carolina, it partnered with a solar developer to install 100 megawatts of on-site generation. Redwood Materials launched a microgrid combining 12 megawatts of solar with 63 megawatt-hours of storage specifically to power data centers. Florida, the Sunshine State, should leverage its most abundant natural resource by encouraging data centers to build their own clean generation, reducing grid strain while creating local jobs.

Second, the companion bill, SB 1118, creates a public records exemption allowing confidential treatment of data center development plans for up to a year. Transparency and public accountability should not be traded away for competitive convenience. Communities deserve to know what’s being planned in their neighborhoods before construction begins, not after.

Third, water conservation standards should include specific technology mandates. Immersion cooling eliminates evaporative water use entirely. Air-cooled systems, while less energy efficient, dramatically reduce freshwater withdrawals.

The bill’s current language requiring reclaimed water “where feasible” is a good start, but feasibility determinations should be made transparently and with public input, not left solely to permitting agencies and applicants negotiating in private.

The bottom line

Data centers are the backbone of cloud computing, artificial intelligence, and the digital economy. Florida should welcome them. But welcoming innovation doesn’t mean handing the wealthiest industry in human history a blank check drawn on Florida’s ratepayers and water supplies.

SB 484 establishes a principle that should be foundational to every state’s approach: businesses that internalize profits must also internalize costs. When a single facility can consume as much electricity as 80,000 homes and as much water as a mid-sized city, the question isn’t whether to regulate. It’s whether the regulation is smart enough to protect families without discouraging the investment Florida needs.

Ávila’s bill strikes that balance. Other states — and federal policymakers — should be watching.

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Dr. Mark McNees is the Director of Social and Sustainable Enterprises at Florida State University’s Jim Moran College of Entrepreneurship, Managing Consultant at The McNees Group, and host of The InNOLEvation® Mindset podcast. His energy policy analysis has appeared in USA Today, The Hill, Miami Herald, and other national publications.