Data centers use a lot of electricity. That sentence is true, and it is not an argument. Steel mills use a lot of electricity. Refineries use a lot of electricity. Aluminum plants use a lot of electricity. In a free country, a large customer who pays the full cost of the power he consumes, the wires built for him, and the damage he actually causes is not a public enemy. He is a customer.
The political class does not want that sentence to stand, because it leaves them with nothing to sell. So the public is handed red herrings: they are “draining the aquifers,” they are “destroying the grid,” they are “stealing your air conditioner in August.” Those lines are useful. They are not the transaction.
The transaction is corporatism. Politicians take the scare, then sit down with the same chief executives to hand out sales-tax exemptions, property-tax abatements, and interconnection rules that let a hyperscale tenant land on the system while households pick up part of the tab. That is not a free market. That is government picking a winner and sending the invoice to people who never asked for the AI datacenter.
The moral rule is simple: they pay their own way. The scandal is the politicians who violate it.
There is a second beneficiary of the panic, and it is not a mystery. The country that most needs American compute delayed, litigated, and regulated into a crawl is China. Beijing does not have to sabotage a single substation if American politicians will do the delaying for them. Democrats have made “guardrails,” moratoria, and climate theater the respectable face of that delay. RINO Republicans — some of them knowing exactly what they are doing, some of them merely chasing the poll and the donor — supply the bipartisan cover. Whether the motive is ideology, committee jurisdiction, or fear of a town-hall crowd, the result is the same: the United States argues with itself while the rival that wants to win the AI contest keeps pouring concrete.
Power Is Real. Socializing It Is the Fraud.
U.S. data centers already consume on the order of 5% of national electricity. Credible federal estimates put that share near 10% to 15% by 2030 if the buildout continues. In some states the concentration is already far higher. In the PJM region — home to Northern Virginia’s “Data Center Alley” — the grid’s independent market monitor has attributed billions of dollars in capacity-market costs to existing and forecast data-center load. Household bills in Dominion territory have climbed hard in recent years for more than one reason: fuel, transmission riders, clean-energy mandates, and large-load growth among them.
None of that proves computing is illegitimate. It proves a regulated utility system can dump large-load costs onto a residential class that did not cause them. Virginia’s own commission has begun forcing Dominion to assign some “direct connect” transmission costs to the large facilities that made those lines necessary, and it created a dedicated large-load rate class with minimum-demand charges so a company cannot reserve a mountain of capacity, walk away, and leave families holding the plant. That is not a war on data centers. That is the rule every honest industrial customer already lives under: if you want the megawatts, you buy the megawatts.
What you should not live under is this: a state that exempts the tenant from sales tax on servers and electricity, then lets the utility recover the substation and the capacity charge through riders on the house at the end of the cul-de-sac. At least 38 states still run dedicated data-center tax breaks. Virginia’s equipment exemption has been estimated in the neighborhood of a billion dollars a year. Texas has been reported in the same range. Ohio’s sales-tax exemption ballooned past $1.5 billion in a single fiscal year — more than ten times the original sales pitch — before the governor paused new applications. In places such as New Albany, Ohio, local property-tax abatements of 65% to 100% have been stacked on top. One late Ohio deal promised 90 jobs against more than a billion dollars of promised spending and tens of millions in state tax forgiveness, plus a local 100% property-tax holiday.
That is not “the market.” That is a politician buying a ribbon-cutting with other people’s money. It is corporatism.
Two Cooling Systems. Price the One You Built.
Water belongs in the same ledger as power: an input with a cost, not a morality play.
Facilities cool in two different ways, and the bill is not the same.
In an evaporative cooling tower, water is the heat dump. A large share of what is withdrawn evaporates and leaves the local watershed. That is consumption. Google’s Council Bluffs site, under that design, consumed on the order of 1.3 billion gallons in 2025. A conventional tower plant can run to a couple of million gallons per megawatt per year. If that load is placed on a stressed basin, the operator should face the price of the water and the local constraint — or build a different plant.
In a closed-loop, direct-to-chip, or air-cooled hall, coolant recirculates in a sealed circuit. On-site evaporation approaches zero. Microsoft, Meta, Nvidia reference designs, and a growing share of new AI halls are moving that way. Some operators already run most of their fleet with little or no evaporative cooling.
The solution follows the equipment. Dry coolers and sealed loops where watersheds cannot spare the vapor. Reclaimed water where a tower is still used. No new evaporative load in a drought basin without paying the scarcity price. None of that requires a national industrial priesthood. It requires a bill that lands on the company that ordered the cooling, not a hearing that treats every server hall as the same straw in the same well.
Power plants, farms, and golf courses also use water. The unique feature of this fight is timing. The water file arrived just in time to justify the next stack of hearings — and hearings are where compute goes to wait.
The Excuse Creates the Room Where the Deal Is Written
This is the pattern already documented on this site. Politicians sell regulation as protection from “evil corporations.” The more rules they write, the more arbitrarily they pick winners and losers. Large firms staff the compliance department and buy the meeting. Small operators drown. The public is told the product is safety. The product is a moat, i.e. protection to the huge, first entrees into a market while making reentry into the marketspace as hard as possible.
Watch the calendar.
In September 2025, EPA Administrator Lee Zeldin hosted an AI and data-center roundtable at the White House with Oracle’s Safra Catz, Equinix’s Charles Meyers, Aligned Data Centers’ Andrew Schaap, CyrusOne’s Eric Schwartz, Cloud HQ’s Hossein Fateh, QTS’s Tag Greason, and members of Congress — convened to talk permitting. In September 2026, a G-20 innovation meeting in Chapel Hill put Jensen Huang, Sam Altman, Mark Zuckerberg, and Elon Musk in the same building as Commerce and White House AI officials to argue for lighter rules and faster infrastructure. This month the president met privately with OpenAI’s Sam Altman at a party convention, phoned Nvidia’s Huang onstage, and called opposition to data centers a “sick conspiracy,” while the House speaker said Congress has a role and that more meetings with tech leaders are coming. The same Congress is moving bills on who pays for power and water upgrades. The same White House has pursued a federal AI framework designed to pre-empt state rules.
You are asked to believe that the people who hand out the abatement, sit in the permitting roundtable, and then write the “national standard” are doing this for your electric bill.
Do you really trust politicians and data-center CEOs — in the same room, writing the rules — to do what is in your interest?
A company that wants 500 megawatts should pay for 500 megawatts, including the wires and the capacity it forces onto the system. That is accountability. A 400-page siting code drafted after the photo-op, a sales-tax holiday that costs the treasury a billion dollars, and a federal preemption that freezes every state that might make the tenant pay cash — that is the corporate state.
Notice who cheers when the American project stalls. China does not need to win a debate in Loudoun County or a committee in Columbus. It needs American capacity delayed while its own comes online. Every moratorium dressed up as “community input,” every year-long environmental pageant that never mentions the tax holiday, every RINO who discovers “local control” only when a server hall is proposed and forgets it when the subsidy is on the table, does work Beijing cannot buy this cheaply. Democrats supply the ideology. Too many Republicans supply the permission slip. Some of them would be horrified to be described as useful to the Chinese Communist Party. Useful does not require a meeting in Beijing. It requires a delayed interconnect.
What a Free People Would Demand
A free market does not require a holy war on computing. It requires that costs fall on the party that caused them.
If a facility evaporates water in a stressed basin, the operator should face the price of that water. If a campus needs a new substation, the campus should pay for the substation, not the retiree two counties away. If the business is profitable, it does not need a sales-tax exemption on servers to exist. If it is not profitable without the exemption, it is asking the public to finance its capex.
Harm is already a matter for courts and contracts. What is not a right is a politically engineered discount. Advocates who demand “guardrails” while leaving the abatements intact are not protecting families. They are building the next maze the largest tenants will help design. Advocates who demand “innovation” while socializing the interconnection are not defending markets. They are defending a tenant.
Data centers are large industrial customers. Let them be that. Let them pay their own way. Take the tax break off the table. Put the upgrade on the invoice of the company that ordered it. Then water and power shrink to what they always were: engineering problems, priced in the open, without a politician in the middle taking a cut of the fear — and without a foreign rival collecting the delay as a strategy.
The proper response from a free people is not to beg the same CEOs and the same committee chairs to write one national rule and “trust the process.”
If they needed the scare to pass the subsidy, the scare was never the point. If the scare also happens to slow the American side of an AI contest China intends to win, that is not an accident worth ignoring.
