AI data center boom meets rural reality in Edgecombe County

By Will Atwater

Across North Carolina, the debate over AI data centers is intensifying as local residents, county officials and state lawmakers clash over whether to block or accept new projects — and who should bear the risks and benefits.

That tension was on full display at a recent Edgecombe County commissioners meeting.

“This is not about a data center,” said Donald C. Boswell, a commissioner in the northeastern county. “I see some very slippery slopes here when we’re letting 50 people with 1,362 signatures — some that were not even in this county, I’m sure; I didn’t count them, I didn’t look at them — come in here and start putting us into this mode to think that we should ban this or ban that.”

Boswell’s remarks came after months of organizing by residents, including a petition signed by nearly 180 local residents and presented to commissioners at a Dec. 1 meeting that opposed the sale of 122 acres of county-owned land in Kingsboro — enough land to hold more than 90 football fields — to Energy Storage Solutions. The land would house a 900-megawatt AI data center that would be large enough to power more than 700,000 homes. 

“I am a little tired of hearing that [a data center] is going to use all of our water, and it’s going to take all of our electricity, and all the things that they’ve said since day one to turn this board around to the point where you say ‘we’ll do a moratorium or either we’ll ban it now,’” he said.

At the state level, that tension between data centers’ ability to bring in tax dollars and residents’ concerns about the environmental and health effects now runs through two proposed bills moving in the General Assembly.

One, Senate Bill 730, the so‑called Ratepayer Protection Act, would impose new rules on large data centers and link coal‑plant retirements to the development of new nuclear generation. That would extend the operation of coal plants — and their accompanying emissions into the atmosphere — and mean that data centers would draw power from coal-fired plants for a longer period of time. 

The other, House Bill 1213, in its current form, would end the 80 percent property‑tax exclusion for utility‑scale solar projects placed in service after July 1, 2027. That measure could slow the development of solar — a clean energy source that could help feed power-hungry data centers.

Part of the draw is simple economics: Rural North Carolina counties offer comparatively cheap land near Duke Energy transmission corridors and water supplies. One recent market analysis found that Digital Realty paid about $960,000 per acre for land near Charlotte, while Microsoft purchased rural North Carolina sites for as little as $19,000 per acre in more rural counties. In either location, those prices are well below the $2‑million‑plus per‑acre land costs reported in Virginia’s “Data Center Alley.”

Two bills at the center of the debate

The Ratepayer Protection Act — introduced by Davidson County Republican Sen. Steve Jarvis — aims to establish guardrails for ratepayers. It would require large data centers — facilities with a peak monthly demand of at least 100 megawatts — to cover the cost of grid expansions, transmission upgrades and new power generation needed to serve their load through long‑term contracts and minimum billing requirements.

The bill requires these facilities to use water‑saving cooling technologies, such as closed‑loop or other systems that minimize water consumption. The bill also bans more wasteful evaporative or open‑loop cooling, with the goal of protecting local water supplies and groundwater.

One of the most controversial aspects of the bill is a provision that prevents the Utilities Commission from authorizing coal plant retirements until new nuclear development in the state gets moving. Until those nuclear plants meet defined regulatory milestones, those coal‑fired plants would operate longer.

North Carolina has struggled to stay on track for its own carbon-reduction goals. A 2022 analysis by the Environmental Defense Fund projected that, without stronger policies, the state would fall short of its 40 percent emissions‑reduction target for 2025. Climate advocates warn that SB 730’s coal‑until‑nuclear approach could push the state even further off course for its next benchmarks: a 50 percent reduction by 2030 and net‑zero emissions by 2050.

Reacting to the language in the Ratepayer Protection Act about prolonging the use of coal‑powered plants, Kevin Wilson, co‑chair of Edgecombe County Neighbors for Data Center Accountability, said that’s a cause for concern.

Wording in the bill states that Duke Energy “does not have to close a coal-powered plant until they have a nuclear plant built and online to replace it,” Wilson said. “Think about what that would cost — it takes at least 20 years to build a nuclear plant. Then think about all the pollution that would go into the air from those coal generating plants running that much longer.” 

The other bill, House Bill 1213, was originally drafted to repeal several sales and use tax exemptions for large data centers, tax breaks that Gov. Josh Stein’s office says cost North Carolina tens of millions of dollars a year. In its original form, the bill aligned with the governor’s push to claw back subsidies he argues are no longer justified. In the version that recently passed the House, however, lawmakers removed the data center language. 

They also added language that would end a property tax break for solar energy electric systems installed on or after July 1, 2027, while allowing existing projects and those that start operating before that date to keep the break, which lowers developers’ tax bills and helps support lease payments to landowners.

The state already provides some $50 million in sales-tax breaks for qualifying data centers. According to Stein’s staff, that figure could grow to about $450 million a year, plus $2.3 billion in one‑time construction‑phase exemptions, if all planned facilities are built. Given the trillions of dollars now flowing into AI and data center infrastructure, “the industry simply does not need economic incentives to occur,” Stein’s staff wrote in an April memo to his Energy Policy Task Force.

By contrast, legislative analysts estimate that North Carolina’s property tax break for solar projects costs local governments more than $40 million a year, which some rural landowners say can be crucial in years when crop yields are down and expenses are high.

Ken Gurganus, a longtime farmer with a solar lease on his land in eastern North Carolina, told lawmakers during the June 30 House Finance Committee meeting that while crop prices have risen only modestly, his costs for fertilizer, fuel, chemicals and equipment have skyrocketed. In that environment, he says the check he gets from the solar company is essential operating income.

“Tomorrow, July 1, my wife and I will receive an installment check from the solar provider, and I promise you, sir, that that money will not go into a trust fund or a vacation,” Gurganus said. “It will go directly into our account, where we pay daily bills that we incur on the farm.”

Low wealth counties under pressure

She said counties statewide are losing about $40 million annually, particularly low wealth counties which “traditionally have the highest property tax rates.” 

“Edgecombe County is number one. They’re foregoing about $2.5 million annually. That’s a big deal,” Hicks said. Her comments were echoed by Edgecombe County Commissioner Donald Boswell at that county’s July 6 meeting.

“Fifty-one percent of our county is on Medicaid,” Hicks said. “We’ve got an aging population that has dropped since the last census. We’ve got to put something at Kingsboro. We don’t need a data center, but are we going to rule it out?”

Prior to Gurganus’ comments, Joy Hicks, director of advocacy and policy for the North Carolina Association of County Commissioners, expressed support for the House Bill 1213, calling it a measure cash-strapped counties need.

Community activist Kevin Wilson is sympathetic to the economic challenges facing rural communities like Edgecombe. 

“The world is on their shoulders in these little towns, and they’re damned if they do, they’re damned if they don’t,” he said. “So I understand [officials] being desperate to find something […] We’re basically tying their hands right now from a data center point of view. But they have to realize that there are other [industries] out there.”

As far as what’s next for Edgecombe County, activists have urged commissioners to adopt a permanent ban on data centers, but commissioners instead voted to call for a public hearing on a proposed 24‑month data center moratorium, which is expected to be discussed at their August meeting.

“Our county is getting active, and as we get active, our citizens get active, so that’s what’s really happening to us,” said Leonard Wiggins, chairman of the Edgecombe County Commission.

“We’ve been sitting here for years doing as we please without question from our public,” he added. “Our public is beginning to question what we do — it’s another day.”

At the state level, neither General Assembly bill is final. 

The Ratepayer Protection Act already passed the Senate once, but after the House added changes it now has to go back to senators for approval and could end up modified again. Meanwhile House Bill 1213 faces further debate in the Senate after passage in the House.

The post AI data center boom meets rural reality in Edgecombe County appeared first on North Carolina Health News.