Data centers have become a punching bag not only at the state capitol, but in local communities as well. Opposition ranges from the fear of increased electricity rates and pollution on residential customers to concerns over water usage. Critics even cite a personal dislike for certain companies or individuals involved. But with Tennessee home to over 60 data centers, many operating for years, are these worries founded in data?
With the recent winter storms and power outages, many (myself included) were confronted with how important reliable energy is to our daily lives. With rising residential electricity usage across the country placing a heightened focus on energy costs, it’s easy to sympathize with fears over data centers’ energy consumption and costs on ratepayers. But what does the data say? Looking at Virginia, which is home to nearly ten times as many data centers as Tennessee, the cost of electricity per kilowatt hour in the last decade shows an interesting trend. Nationally, the average price per kilowatt hour has decreased, from 13.7 cents in 2015 to 12.9 cents in 2024. In Tennessee, it decreased from 12.3 to 11 cents. But Virginia, the state with the most data centers by a large margin, also saw their average cost decrease, from 12.3 to 10.8 cents per kilowatt hour. Virginia’s average cost per kilowatt hour was the same as Tennessee’s a decade ago, and has decreased by roughly the same amount, but massive data center growth hasn’t created a huge spike in electricity costs in Virginia. Instead, average prices have dropped below Tennessee’s.
When it comes to water usage, large data centers can use millions of gallons. That is a massive number, but context is important when it comes to a precious natural resource like water. For example, Google’s data center in Montgomery County used nearly 289 million gallons of water in 2023, or about 790,000 gallons a day. That sounds like an exorbitant amount of water usage, yet for context, two golf courses use more water each year on average than a data center. A single acre of corn can use nearly 700,000 gallons of water, while an acre of rice requires over 814 thousand gallons. Calls for the government to regulate a specific industry because of a perceived “massive” water usage are unnecessary. These critics are simply advocating for more big government intrusion into private businesses, while disregarding the fact that other industries use as much or more water without similar calls for regulation.
At least there is some benefit to the data center and the golf courses. One allows you to stay connected with the world at all times, while the other allows you to escape it for a few hours. But what about water that serves no beneficial purpose? Looking at Nashville’s Metro Water Services data, in 2024, they stated 33.71 percent of all water input is lost due to leakage. Out of an average system input of 109.5 million gallons/day, 36.9 million gallons were lost. For the year, that is 13.5 billion gallons of water lost due to leaks. Across the state, dozens of utility districts report massive water loss, with one up to 98.8 percent, contributing to a statewide average of over 31 percent. With billions of gallons of water being lost to leaks, why has concern focused on instrumental industry, like data centers, which are responsibly using just a fraction of that?
Data centers may not be the typical industrial building, like a Nissan, General Motors, or Volkswagen plant, yet they are less of a boogey man than they are made out to be. While the benefits may not be as clear as a car rolling off an assembly line, corn being harvested, or making a hole-in-one, the benefits are there, and they are massive. The technologies we use every day, even the technology we use to read this blog, are dependent on data and storage. Data centers drove nearly all GDP growth last year and are tied to millions of jobs. Electricity consumption, water usage, and pollution are genuine concerns for some industries, yet data shows these concerns are not based in fact when it comes to data centers. Maybe AI, which depends heavily on the power and storage of data centers, can help us find more solutions to these problems for all industries, or at least how to better find and repair leaks in local utility lines.