Throughout the nation, communities are divided on the rapid development of AI data centers that threaten to suck rivers dry and raise utility bills with enormous energy demands.
In Boulder City, a short drive southeast from Henderson, voters will get to decide whether data centers are an acceptable use for a specific portion of city-owned land known as the Eldorado Valley Transfer Area.
But while city spokeswoman Lisa LaPlante and Mayor Joe Hardy said in separate interviews that developer interest is behind the city’s decision to pose the ballot question to voters in November, they declined to identify those developers.
“I don’t have a list of the people who have come, will come or might come to us, but we know that there is an appetite for data centers,” Hardy said. “I suspect that pretty much everybody who wants to build a data center will say, ‘How about you? Do you want our data center?’ And we’ll say, ‘Show me the money.’”
Separately, next week the Boulder City Council will preliminarily consider allowing the construction of its first data center, proposed within city boundaries by Townsite Solar 2 LLC, which has ties to Skylar Capital Management, a Houston-based hedge fund management company focused on natural gas and energy. The company’s contact person on the application didn’t reply to requests for comment.
That proposal is something that doesn’t require voters’ approval, as it’s not located in the specific Eldorado Valley Transfer Area. According to the city charter, voters must OK any new type of land use for the transfer area before a lease or sale proposal can go before the council or Planning Commission.
Previously voters have approved other uses for the transfer area, such as geothermal energy production, though that use has not come to fruition.
“We have a very active community here. When they purchased the land, they put into the charter what it could be used for,” said LaPlante, the city spokeswoman. “It keeps our constituents engaged in the process.”
Insulating residents from costs
Of the 107,400 acres within the Eldorado Valley Transfer Area, about 86,000 must be left undisturbed for desert tortoise habitat. Much of the developable land is already used by solar farms and a natural gas plant.
That doesn’t leave much room for a data center, though a project’s footprint could be a fraction of a solar farm’s — and Hardy said the council would charge much more money per acre if a data center lease went forward.
The city purchased the transfer area in 1995 for about $1.28 million. In total, the city estimated in 2024 that current leases will generate just less than $1.34 billion in revenue over the next seven decades, not including $100,000 in annual property taxes.
Hardy said that represents 34 percent of the city’s general fund.
“Police, fire, city employees, parks and rec — all of those things are going to cost more and more because of normal inflationary cycles that happen,” the mayor said. “We know that if we stay stagnant, we will be stagnant. We won’t be able to afford the normal pay raises that everybody expects to have in normal life.”
Unlike nearby Southern Nevada cities served by NV Energy, Boulder City has its own utility, and Hardy said officials have no interest in selling off power to data centers.
A city staff report for the item on next week’s City Council agenda says Townsite Solar 2 has agreed to pursue power elsewhere, which Hardy says could be generated in pretty much any nearby state and transferred directly to the site.
George Rhee, a UNLV physics and astronomy professor and co-founder of the Boulder City Climate Action Group, said he is a firm “no” on the vote to approve data centers in the Eldorado Valley. When it has been discussed at public meetings, every resident has expressed some degree of opposition.
Without any clarity on which data centers or AI developers are behind the push, Rhee said voters aren’t being given the appropriate information to make an informed decision.
“I think they’re throwing darts,” he said. “They want to build these things, and they’re just carpet-bombing any community to see where it will fly.”
The water question
A data center could be an answer to water waste in Boulder City, however.
Currently, only some of the wastewater from the city plant is used for dust control at a quarry and in solar farms, while the rest is left to evaporate. This isn’t the norm in the Las Vegas Valley or Laughlin, where nearly every drop of water used indoors is captured, treated and sent back to Lake Mead to help stretch the state’s meager share of the Colorado River.
Hardy said the city could make a profit off of selling that treated wastewater to a data center, too.
The Southern Nevada Water Authority is now conducting a feasibility study as to how the water could be sent back to Lake Mead or used for irrigating grass within city limits. An agency spokesman said this month that he didn’t know when it would be completed, though Congress recently granted the facility a $1 million grant to update infrastructure.
Across Southern Nevada, city governments adopted a moratorium on developments that would use so-called “evaporative cooling” that went into effect in February 2024. Some data centers, including Google’s water-guzzling facility in east Henderson, were built prior to the ban.
“Data centers are not as big, ugly, loud or water-hungry as they used to be,” Hardy said. “Data centers that are using evaporative cooling are going to be dinosaurs here shortly.”
The city’s staff report says Townsite Solar 2’s project would either agree to use wastewater only or pursue a form of dry cooling — an innovation that water authority General Manager John Enstminger said the region is leading the way on.
Enstminger pointed to Novva’s new data center in North Las Vegas that doesn’t consume water to cool its facility at all.
“We’re seeing the ability to expand data centers and not increase our consumptive use of water,” Entsminger said in a Thursday interview. “A lot of what we’re seeing is, with AI, that technology is going to take the next leap.”
The Boulder City Council will discuss an initial version of Townsite Solar 2’s proposal Tuesday, though that’s just the first step in a monthslong process that involves the city’s Planning Commission.
Contact Alan Halaly at ahalaly@reviewjournal.com. Follow @AlanHalaly on X.
