John Augustine sees data centers as the fourth industrial revolution.
"In the beginning, coal and iron gave way to our second wave, which was industrial parks and advanced manufacturing. In our third wave, we experienced a warehouse and distribution center boom like no other,” said Augustine, the president/CEO of Penn's Northeast. “Because of things like E-commerce, cloud computing, apps like Google Maps and Twitter and the phenomenal growth of A.I., we are presented today with our fourth generational opportunity.”
Augustine testified during a public hearing on data center development in Pennsylvania. Close to 200 people listened to PA Senate Republicans Policy Committee hearing in the Valley View High School auditorium, more tuned in online.
State Sen. Rosemary Brown called the hearing, which was chaired by state Sen. David Argall. Nathan Grace from U.S. Sen. Dave McCormick’s office and state Sen. Lisa Baker also participated in person. More state senators from around Pennsylvania participated online.
There was no public comment. But Brown’s office did take constituent questions ahead of time.
"How do we take advantage of the economic benefits while ensuring our power grid, our water supply, the environment, health and safety, security and the citizens are always protected at the highest level," she said. "These were many of the questions that you submitted for this hearing, and we are acknowledging them.”
Four separate groups of panelists touched on various topics surrounding the hyperspeed of data center development nationwide and particularly in Pennsylvania.
The experts say technology is constantly changing when it comes to running a data center and that new methods are being developed to decrease water usage to cool computers. Pennsylvania is uniquely positioned to power the centers with the state’s availability of natural gas in the Marcellus and Utica Shale formations.
Others advocated for more transparency when it comes to utility usage and the role of local governments.
The only certainty from the hearing is that many things are uncertain.
How many data centers will there be in NEPA?
Argall said at the beginning of the hearing that he knows of at least nine proposed plans in his District 29, which covers Carbon and Schuylkill Counties and parts of Luzerne.
Augustine said he knows of at least 15 companies interested in Northeast Pennsylvania. Penn's Northeast covers nine counties. His economic development agency has signed seven nondisclosure agreements.
"We don't expect all of them to come to fruition, but a good portion of them will, and these range from everything from a single-use building to hyper-scale campuses with multiple buildings,” he said.
As of July 29, the Susquehanna River Basin Commission (SRBC) was tracking 13 or 14 potential data center developments in the basin, said Andrew Dehoff, executive director.
“Here on August 11, it's probably 15 or 16,” he said during the hearing.
There are a few known proposals for data centers in Lackawanna County, including Blakely, the neighboring borough to Archbald, where the high school is located, and a controversial multi-building center in Covington and Clifton townships.
No ground has been broken yet.
Amazon Web Services (AWS) is investing $20 billion into Pennsylvania for its data center operations, including opening a center in Salem Twp., Luzerne County, near the Susquehanna Nuclear Power Plant.
Merle Madrid is the Senior Manager of Public Policy for AWS. He joined Augustine on the first panel. He said AWS invests in lowering its carbon footprint and recycling.
Brown asked Madrid about the timeline to build a data center and if companies follow up with communities to assess impacts.
Madrid said AWS data centers take about a year from groundbreaking to when the plant is up and functional. And that Amazon wants to work and continue to work with local communities.
"To understand what the sound requirements are … what's expected relative to ambient sound? Are we near a highway or we near a neighborhood?" he said. "Don't be near a neighborhood, is probably the best place to start.”
Demand on water resources
Brown said she received many questions about water usage.
Dehoff said he was glad the previous panelists talked about water saving technologies that they are employing or looking at.
"But I can tell you, I have colleagues in Atlanta and Texas and the Loudoun County, Virginia area, where these are being built, that are in full-on panic mode about how they're going to meet the water supply demands," he said.
It’s critical to add water to the conversation early in the process of site selection and design, he added.
So far, the commission has only permitted one data center water use. The Delaware River Basin Commission (DRBC) has not received any applications for data center projects, said Kristen Bowman Kavanaugh, DRBC Executive Director.
She said existing data centers in the basin purchase water from public water supply systems.
Tony Nokovich is Vice President of Engineering for Pennsylvania American Water. He said data centers will increase summer peaks and can exert stress on its water distribution infrastructure.
But, he said, the utility is well-positioned to manage the stress on the system.
"Because we invest approximately $700 million in infrastructure upgrades on an annual basis across the commonwealth, our infrastructure and systems are prepared to manage their consumption, but other water utilities may not be able to provide the same level of reliability,” Nokovich said.
He asked that the Pennsylvania General Assembly look at policy measures to streamline the growth of data centers.
“It would be beneficial to consider water demand forecasting, infrastructure cost sharing, capacity agreements, alternative water sourcing mandates and operational resilience and demand management requirements,” he said.
Brown asked if there has been coordination between “players in the water world” to talk about water usage for data centers.
Dehoff said several agencies have had discussions.
"I think the first step is trying to get a handle on what is likely. What are the water savings technologies that will be employed, that seem to be available, and what does that mean for development?” he said.
Dehoff also mentioned the flooded mines in much of the anthracite coal field. When the coal companies left, they shut off their water pumps, and now millions of gallons of water are beneath the surface and in need of treatment.
“It's not good quality water, but it's readily available, and certainly provides an opportunity for a sustainable source,” he said.
Natural gas for power
PPL, American Petroleum Institute (API) Pennsylvania and the Marcellus Shale Coalition representatives testified.
“As the president of PPL Electric Utilities, I probably answer most questions about data centers over the last year or so,” said Christine M. Martin.
The utility serves 29 counties in Pennsylvania, she said. The current system peak is 7.5 gigawatts — that can power about 5.6 million homes.
"That took us about 100 years to get to. So we're talking about roughly a doubling of our system peak in the next five to six years. This is obviously transformational, not just to the Commonwealth in our 29 counties, but also for our system to be able to serve that load," she said.
PPL is upgrading its infrastructure.
"The load from those data centers will flow through our system, improvements to our system to meet that load will benefit all of our customers in terms of reliability and resiliency this system,” she said.
Jonathan Lutz is the Pennsylvania Associate Director for API. The organization represents all segments of America's natural gas and oil industry.
“According to a recent report by the Department of Energy, electricity demand for data centers in the US could triple from about 4% in 2023 to 12% by 2028,” Lutz said.
Pennsylvania is the second largest producer of natural gas in the country, he said.
The state “remains uniquely positioned to be the epicenter of growth and opportunity, yet still none of these opportunities can be realized for Pennsylvania without the support of continued improvements and build out of natural gas pipelines, infrastructure, and storage facilities that ensure and prioritize a diverse grid,” he said.
He testified that permitting reform is needed at both the federal and state levels to create more infrastructure.
Local government's role
Kristopher Gazsi is the assistant director and counsel for the Pennsylvania Local Government Commission.
"First, in this environment of challenges and opportunities, I think that our local governments and our local communities are really at a position where they are yearning for communication,” Gazsi said.
Townships cover about 95% of Pennsylvania, said Holly Fishel, the Policy and Research Director for the nonprofit, nonpartisan Pennsylvania State Association of Township Supervisors (PSATS).
"Local governments must continue to be allowed to set common-sense rules that vary by community and deal with things like setbacks, noise, light pollution and reasonable height requirements,” she said.
Both local elected and appointed officials have been aggressively working to learn more about the impacts of data centers and what has happened in other states, Fishel said.
"The positives do need to be balanced with mitigation of the impacts on the residents who live down the street and share a well with the facility or the fire department, who will respond to an emergency,” she said.
Gazsi said all should look at their zoning ordinances and comprehensive plans before developers come in and purchase land.
He asked the elected officials and their representatives to keep in mind that Pennsylvania has small communities of only a thousand people to large cities like Philadelphia.
Those small communities did not always have fully staffed planning or engineering departments.
"We do want to look at those issues in anticipation and be able to answer the questions like, What will our fire department be able to handle if there is a fire? What is the access to public safety if we don't have municipal police? What is the availability of EMTs during the construction process, or, you know, even any other kind of accident issues?" Gazes said. "So I think the public really has these questions, and it's an appropriate part of the conversation to look into them as we go forward.”
More to come
The hearing wrapped up after three hours of testimony.
"We've learned a great deal of information. I think we have shown that there are true benefits, there's job opportunities, there are some things, but there's a lot of questions still, and there's a lot of concerns and communication that we need to build from local government to state government to residents. So I think this is a great starting point for us," said Brown.
Argall added "this is the beginning, this is not the end."
To watch the hearing, visit https://policy.pasenategop.com/policy-081125/
