Joe Lombardo and Aaron Ford are taking differing approaches in response to the growing demand and rising unpopularity of data center development in Nevada.
The two candidates for governor spoke with the Las Vegas Review-Journal recently about how they would approach regulating the power- and water-intensive industry as it seeks to expand in the Silver State. They both say they support its responsible development.
The issue of data centers has been with the state for more than a decade, when tax credits for data centers won bipartisan approval in the Nevada Legislature. But the advent of artificial intelligence and hyperscale data centers in the past few years has changed both the economics and politics of the industry.
A Pew Research Center survey of more than 10,000 Americans published this week revealed that support for data centers is declining, according to researchers.
Roughly half of the respondents said data centers were mostly bad for residential energy costs, researchers said. About 54 percent of respondents said the industry is mostly bad for the environment and 49 percent said they were mostly bad for the quality of life of surrounding residents. Just 4 percent of Americans think data centers have a mostly good impact in each of these areas.
Concerns over data centers have caused some Nevada municipalities to consider moratoriums for new development. A May Nevada Legislative Counsel Bureau report said that planning was underway to build 70 more data centers across the state.
Lombardo’s position
Lombardo staked out an early position on Sept. 18 when he signed an executive order directing the Governor’s Office of Economic Development to draft a “community support commitment” by Nov. 6 with input from energy and water regulators, state agencies, municipal governments and school districts.
That plan would eliminate exemptions that have been given to data center developers of local school taxes, a move that was supported by the Clark County Education Association and the pro-industry Data Center Coalition.
Other than the school funding provision, Lombardo’s executive order does not outline specific guardrails, leaving it to the GOED to address other concerns, including water usage, electric grid, rates, reliability, zoning and transparency.
Once the community support commitment is affirmed, developers would have to abide by its conditions in order to remain eligible for tax abatements.
“There’s been some clamoring for some adjustments,” Lombardo told the Las Vegas Review-Journal on Wednesday.
He said that when he took office in early 2023, there already were power-related limitations, and data centers were required to install closed-loop cooling systems to prevent water waste.
“Until recently, because of the proliferation of data centers, we had to make sure that we were concerned across the board, especially on the power side,” Lombardo said in an interview. “That way the individual user isn’t suffering as a result.”
Lombardo sees the executive order as an initial step.
“In order to do more than that, coming from on high — from the state down to the local municipalities — we got to go through the Legislative process, and we’re working through that later, too,” he said.
Lombardo said he foresees that Nevada’s ultimate set of policies will become a model that can be replicated across the U.S.
“I think ours is best practice,” he said about his executive order. “I think a lot of states are going to be copying our methodology in that space.”
Ford’s position
Ford said his opponent’s plan doesn’t go far enough.
“Weak. A little too late,” he told the Review-Journal on Monday. “Some would argue unenforceable.”
As Nevada Senate minority leader in 2015, Ford co-sponsored the bill that created tax abatements for data centers in the first place. Now he’s calling for a pause of the tax breaks until the GOED audits the facilities to ensure they are complying with their commitments to job creation, tax revenue and economic benefits.
“Let’s be clear, I haven’t changed positions at all,” he said in an interview. “The data centers of 2015 are different than the data centers of 2026.”
He cited advancements in artificial intelligence — a top data center use — and increased use of natural resources that didn’t exist when his bill was signed into law by former Gov. Brian Sandoval, a Republican.
Ford’s policy proposals would extend a ban on evaporative cooling already in place in Southern Nevada, demand the creation of union jobs and require that data center energy usage doesn’t lead to price hikes for other consumers, according to his platform.
He is also calling for transparency and the closure of regulatory loopholes. His campaign website says he would seek community input.
“These data centers themselves have not been held accountable, by the way, or at least been audited to ensure that we’ve been able to receive our end of the bargain for them receiving those benefits,” Ford said. “I am being responsible and responsive based on new information, and people in our state don’t expect their elected officials to stand by position merely because they said it before.”
Contact Ricardo Torres-Cortez at rtorres@reviewjournal.com.
