Congressman and candidate for Governor Dusty Johnson wants to give more tax breaks to bring data centers to South Dakota. State Senator Taffy Howard (R-34/Rapid City) wants legislation to protect South Dakota from the higher electricity bills data centers cause:
“We have the issue of cost. We have consumers around the country seeing their utility bills double and triple. So when utility companies need to build more infrastructure to address the needs of the data center, we need to ensure that cost is put onto the data center and not shared with residential consumers,” said Howard [Blake Troli, “State Senator Howard Anticipates Legislation on Data Centers Next Session,” KOTA-TV, 2025.10.21].
Senator Howard isn’t imagining big-biz bogeymen—South Dakota News Watch notes that data centers do indeed make power more expensive:
Energy prices for people living in some areas where data centers are constructed increased after the facilities become operational.
An analysis by Bloomberg.com showed that electricity prices increased 267% over five years for energy customers who live near newly constructed data centers.
The report said that wholesale prices have doubled since 2020, mainly in areas near data center hot spots. Of the areas that had price increases, 70% are located within 50 miles of data centers.
The impact on energy prices can vary, however, according to a separate study. If data centers require new power plants or other substantial improvements to the grid, price changes could be more dramatic [Michael Klinski, “Fact Brief: Can Data Centers Lead to Higher Energy Prices?” South Dakota News Watch, 2025.11.13].
Research led by Cornell University doesn’t address utility rates but somehow concludes that South Dakota is among the four best states for data centers because we have less of a water scarcity problem than other states (really?) and because of but we’d have to build a lot more wind and solar farms and Internet infrastructure:
While AI advancement is a key priority, our study highlights its environmental impact. To mitigate these risks, we identify that concentrating AI server deployment in Midwestern states—Texas, Montana, Nebraska and South Dakota—is optimal, given their abundant renewables, low water scarcity and favourable projected unit water and carbon intensities. These states possess substantial untapped wind and solar resources, enabling robust green power portfolios and reducing competition with other sectors. Their lower water stress also helps ease public concerns and reduces the need for costly water-saving measures. However, several implementation challenges must be acknowledged. Texas, crucial to the optimal strategy, may need to support an additional 74–178 TWh of AI server demand, possibly exceeding its current total renewable generation of 139 TWh (ref. 38). This scale-up would require substantial investment in new renewable capacity and transmission infrastructure, which is already constrained by existing congestion39. Meanwhile, Montana, Nebraska and South Dakota currently host minimal data-centre capacity, indicating that most of their existing internet infrastructure may support only residential or standard industrial applications. This raises potential connectivity and security concerns for high-performance AI services. Enabling AI-grade infrastructure in these regions will require broadband and security upgrades, with associated emissions and capital costs increasing the expense of the optimal strategy. These challenges underscore the complexity of sustainable siting decisions and highlight the need for strategic coordination to ensure that AI investments support both technological leadership and long-term sustainability goals [Tianqi Xiao, Francesco Fuso Nerini, H. Damon Matthews, Massimo Tavoni & Fengqi You, “Environmental Impact and Net-Zero Pathways for Sustainable Artificial Intelligence Servers in the USA,” Nature Sustainability, 2025.11.10].
Dusty and the economic developers will likely site the topline of that research to promote their quest for data centers. Taffy should keep pointing to those higher electric bills and water needs to ask how we’ll protect South Dakotans from the harms of Big Data.
A grid failure Thursday left at least 100,000 without power in Wyoming and the Black Hills region. Ice storms and other calamities driven by anthropogenic climate hijinx routinely knock out electric power often resulting in lost lives and the inevitable cyber attacks on the US will take down the grid for days, even months causing food shortages and mayhem but the addition of virtual power plants or VPPs can change that handling some twenty percent of peak power demand by 2030.
Little wonder NWE and BHE want to merge.
I also think new datacenters should pay for any new infrastructure costs, including long term costs, so as to not raise rates. Otherwise it’s just more of the public subsidizing private companies. This may include on site power sources or sources that feed into the grid.