Data Center Debate Center Stage in Nevada Governor’s Race

Democratic gubernatorial candidates are increasingly focusing on the rapid expansion of data centers across Nevada, tapping into the perceived lack of regulation and generous tax incentives for the industry. The issue has become particularly heated in Boulder City, where a proposed 88.5-acre data center has sparked intense community opposition and drawn statewide attention.

The proposed Boulder City data center, developed by Townsite Solar 2 LLC, an affiliate of Houston-based Skylar Energy Management, was awarded more than $24.3 million in property and sales tax abatements by the Nevada Governor’s Office of Energy in 2024. Over fiscal years 2023 and 2024, data centers in Nevada received approximately $13.3 million in property tax breaks and $225.6 million in sales and use tax breaks, according to the Nevada Department of Taxation.

Alexis Hill, a Washoe County Commissioner running for governor, hosted a town hall in Boulder City last week where she outlined a plan to address the regional impacts of data centers through executive orders. Hill’s proposal includes freezing new tax abatements and reviewing the impact of existing data center operations on water use and energy prices.

She also called for establishing a state permitting process to guide local jurisdictions developing land use policies “on the fly,” as there are no state or county-wide regulations in Nevada.

Boulder City residents have raised concerns about the data center’s potential water usage of up to 650,000 gallons per day and its significant energy demands. NV Energy told state legislators that Nevada will need 50% more energy than projected just two years ago, with demand potentially doubling by 2030, largely due to the expansion. The surge threatens to derail Nevada’s clean energy goals, according to the utility.

Democratic candidate Aaron Ford has proposed requiring data centers to “commit to paying for the energy they consume and building out the additional electrical grid infrastructure needed to deliver it” so costs are not passed to ratepayers. A spokesperson for Republican Gov. Joe Lombardo echoed similar sentiments, stating that data center expansion “should not increase power rates for families or businesses, and impacts on the water supply must be carefully managed.”

Hill faces a significant fundraising disadvantage in the Democratic primary against Ford, who reported having $1.5 million as of January 15, compared to Hill’s $306,000. Ford has also received endorsements from all five Democrats in Nevada’s congressional delegation.