MONTGOMERY — Members of the Senate Fiscal Responsibility and Economic Development Committee passed two bills concerning data centers in the "Alabama Affordability Protection Plan" on Wednesday.
However, the third and most controversial bill in the package, changing the Public Service Commission (PSC) from elected to appointed, wasn't on the committee's agenda and didn't receive a vote. All three House versions of the bills sailed through a House committee on Tuesday and are on the House calendar for a vote on Thursday morning.
One bill by State Sen. Andrew Jones (R-Centre) would limit the maximum exemption period for abatements available for data processing centers to 20 years beginning Jan. 1, 2027, would require data processing centers to pay state sales and use taxes on purchases made by certain large data processing centers beginning Jan. 1, 2027, and provide for the distribution of proceeds from the taxes, and would extend the sunset date for data processing center abatements.
"This bill has to do with data centers. You all know, we're hearing it from constituents left and right about energy affordability and cost," Jones said in committee on Wednesday. "One thing we realized is that our data center incentives were not consistent with other economic development incentives in Alabama. What that means is it was kind of too sweet of a deal. Data centers use a lot of electricity. They suck up a lot of energy. That I think was one of the factors, there are many others, in driving utility costs up. This kind of just brings the incentives in line with other economic development incentives, lowering it from 30 years to 20 years. That's the big thing."
The second bill by State Sen. Lance Bell (R-Pell City) included in the Alabama Affordability Protection Plan passed by the Senate committee on Wednesday prohibits cost shifting from data centers to Alabama businesses and families.
"I think this goes back to we're seeing a lot of issues, a lot of questions dealing with data centers. I don't think data centers should be built on the backs of our ratepayers, our citizens," Bell said. "What this does is set up the framework to make sure that the Public Service Commission basically protects the ratepayers, protects our citizens, and any infrastructure, any of those costs should be borne by these billion-dollar data centers that are here building in our state, or if they're allowed to build. I just think we need to protect our citizens from that."
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