Senate data center bills advance to floor vote, with sustained concerns about privacy issues

A pair of bills aimed at safeguarding Floridians from some of the most negative impacts of large-scale data centers while making the state more attractive to those businesses are on their way to the Senate floor.

Members of the Senate Rules Committee voted for the measures (SB 484, SB 1118) by Miami Springs Republican Sen. Bryan Ávila, who described them as both smart protections from and for an increasingly necessary technology.

SB 484, the more popular proposal, received unanimous support. SB 1118, a far more controversial measure, advanced on a 16-8 vote.

The first bill, SB 484, would establish new regulations for large-scale data centers and other major electricity users, focusing on transparency, utility costs and water use.

It would require the state Public Service Commission to create special electricity rate structures ensuring that large data centers and similar customers pay the full cost of the infrastructure and service needed to support them, preventing those costs from being shifted onto regular utility customers.

It also would create stricter permitting requirements for water use by large-scale data centers, including mandatory conservation plans, required hearings before approval and use of reclaimed water when feasible.

“We want to see us move in the right direction as it relates to technology, but first and foremost, we have to make sure we protect our residents from any sort of rate increases we’ve seen in other parts of the country,” he said.

He said many other states have seen a “spike in electricity demand” from data centers and other “super-users,” citing a recent Bloomberg analysis that found some consumers’ bills skyrocketed by as much as 267% over the past five years.

In terms of regional oversight, SB 484 would affirm local governments’ authority to regulate data center development through zoning and land-use planning. It would also prohibit state and local government agencies from signing nondisclosure agreements that prevent public disclosure of information about proposed data center developments and impose fines for violations.

Ávila amended the bill at Tuesday’s lengthy meeting to clarify that large-load customers, including data centers, cannot be classified as electric substations for land-use purposes, which could affect how they may be regulated locally.

The amendment also strengthened provisions requiring utilities to obtain financial guarantees and other protections to ensure large data centers fully cover their electricity-related costs and do not create financial risk for other ratepayers.

SB 1118, meanwhile, would provide something of a counterbalance to SB 484’s effects by allowing local governments to keep information about a company’s plans and interests in locating a data center for up to 12 months, if requested.

The bill also includes a five-year provision — set to sunset in October 2031, unless extended — that would make a data center company’s “proprietary confidential business information” confidential until it becomes public or the company stops treating it as proprietary.

As he had in prior committee stops, Ávila likened the exemptions contemplated in the bill to those allowed today for economic development projects, which appear on agendas under a “confidential project” descriptor.

“This is an attempt to sort of thread the needle in the previous bill that we discussed,” he said, adding that several states have much longer time limits than the 12 months SB 1118 contemplates.

Still, several of Ávila’s peers on the panel expressed concerns with the measure, none more forcefully than Hollywood independent Sen. Jason Pizzo, a former state prosecutor whose family business is in real estate.

Pizzo, who voted against SB 1118 in its two prior committee stops, said he’d be doing so again because, in his view, the bill would improperly leverage government might to benefit a private company.

He referenced instructions his late developer father gave when acquiring land: Tie it up, shake hands, make a deposit, give yourself a due diligence period, seek an extension if necessary and ultimately either follow through with the deal or lose the deposit.

“(That) system still works today. It’s not the government’s business to be appreciating, absorbing and being responsible for the risk associated with enterprise,” he said. “It’s socialism. To do that, you’re taking as much risk out of the investment as possible.”

Ávila had previously argued that when a company expresses interest in building on a big piece of land, particularly in high-value areas like South Florida, opportunistic investors could buy up the land and jack up the price. Allowing such occurrences to happen in Florida, he said, could make the state less alluring than others.

“If we want to pride ourselves on certainly being a leader in every single field, including technology,” he said, “we need to make sure that we make Florida as attractive as possible.”

Pizzo said what SB 1118 would prevent from happening with data centers is what happens with myriad other industries.

“You’ve seen it done in Miami when people speculate and buy properties because rumor gets around about train stations, train stops, baseball stadiums, golf courses, etcetera,” he said. “So, just let these guys do what small businesses have to do.”