▶ 0:21:42Good morning. Welcome to Committee on Small Business Subcommittee on Rural Development, Energy, and Supply Chains. I'd like to recognize Chairman Roger Williams for the prayer and the pledge. Please stand to the republic for which it stands. One nation under God, indivisible, with liberty and justice for all.
▶ 0:22:07Please. Heavenly Father, God of all people, thank you for allowing us to be here today to share ideas of this great We also care about you. That's why every day walk your name we pray morning I now call the subcommittee on rural development energy and supply change to order without objection the chair is authorized
▶ 0:22:37to declare a recess of the committee at any time I now recognize myself for my opening statement so welcome to today's hearing empowering rural America through investment and innovation I want to say thanks to our witnesses for showing up today, traveling here at their own expense to spend some time with us and your expertise. So, as the demand for AI America's digital infrastructure is rapidly expanding into rural communities.
▶ 0:23:05This infrastructure consists of data centers being built far beyond traditional tech hubs with many investments being made in rural areas, including in my district in Ellis County. Our rural communities and small businesses are at the center of America's AIdriven growth. Texas is leading the charge in data center development because of our progrowth, pro- energy, and low regulatory environment that has minimized the hindrance of red tape.
▶ 0:23:32We've placed a strong focus on developing the workforce for high-paying new color jobs and data companies have recognized those The economic ripple effect from data centers can reinvigorate rural comm community communities like mine by creating high-paying trade careers and supporting long-term economic activity in rural small businesses. For every direct job created at a data center, up to seven jobs are supported in the surrounding community.
▶ 0:24:02Small businesses are supplying, maintaining, and supporting these facilities. From construction to infrastructure upgrades, data centers open doors for main street entrepreneurs and trade workers to be a part of the next generation of technical Meeting the workforce of needs of data centers across the country will take a whole of community approach to attract and train the skilled workers needed to Many of our military veterans who return to ci civilian life already possess the skills
▶ 0:24:33required for this industry. As a vet myself, I was proud to co-lead the bill that made the Boots to Business Training Program permanent alongside Chairman Williams and Representatives McGarvey and Schneider. Through this effort, our returning service members can be trained to fully utilize their military skills in entrepreneurship and opportunities, including those offered by the data center industry. This bill was passed in the FY25 NDAA and will continue to be a vital tool in meeting our workforce needs.
▶ 0:25:04Building out this workforce is a crucial step in securing America's energy dominance and supporting our national security. At the same time, industry leaders, local partners, and educational institutions are already stepping up with investments in advanced energy solutions that not only strengthen local infrastructure, but keep us competitive with the AI race with China.
▶ 0:25:25I look forward to hearing from today's witnesses about how data centers can support local communities, strengthen the small business ecosystem, and help build a new middle class in rural areas across the country. With that, I now recognize the ranking member, Representative Morrison, for her her opening remarks.
▶ 0:25:42Thank you, Mr. Chairman, and thank you to the witnesses for being here. Emerging technologies like AI and blockchains are redefining how people around the world live and work. These technologies are run on computers, but most computers don't have the processing power or compute needed to run them quickly enough for mainstream use. For advanced AI models to be developed or operated at a suitable speed, they must be hosted by a massive group of computers that collectively pull their compute found only in data centers.
▶ 0:26:11The growth of AI both in use and in development has spurred an explosion in data center construction which has caused a huge rise in demand for the electricity they need to function as well as for water used by some data centers liquid cooling systems. New data centers can bring benefits like tax revenue and investment to rural areas that sorely need them. But as we point out in most hearings, it's important to think about the whole picture. the benefits, the costs, who receives those benefits, and who bears those costs.
▶ 0:26:42The recent data center boom presents numerous challenges. First, data centers are causing residential customers electric bills to rise by increasing electricity demand and straining the electric grid. Second, data centers draw in supplies of clean, drinkable, fresh water, stressing local water systems, sometimes in areas with already limited water availability and infrastructure.
▶ 0:27:05Third, Computer part makers responding to AI developers vast capital are shifting production from consumer parts to AI products, making computers and smartphones more expensive. And last but not least, new data centers are directly and indirectly increasing pollution and carbon emissions, posing significant health risks. With all that said, these outcomes aren't foregone conclusions.
▶ 0:27:30It's possible to build more data centers in a way that doesn't hamper innovation but also benefits the communities that surround them. We should be thoughtful and purposeful about the way we are building data centers. During the previous administration, Democratic congressional majorities enacted landmark laws to lower costs for consumers and small businesses. The inflation reduction act created tax incentives to make energy cheaper and cleaner.
▶ 0:27:57The bipartisan infrastructure law invested hundreds of billions of dollars in our clean water and broadband internet. And the CHIPS act funds and incentivizes domestic computer manufacturing, stabilizing and lowering computer prices. HR1 slashed those IRA tax credits, and the Trump administration is doing everything in its power to halt the permitting of clean energy products, the cheapest and fastest forms of energy to build.
▶ 0:28:25He's also diverted billions in broadband funding to Elon Musk's company Starlink for unreliable satellite connections in rural areas. And he proposed cutting rural water and wastewater grants by 154 million this year and repealing the chips act. Altogether, President Trump is enabling data centers to make America's affordability crisis far worse. Still, we can salvage this situation.
▶ 0:28:52We can follow through on the far-sighted investments made by the previous administration and put in place common sense guardrails that shield American consumers and small businesses from the excesses of the data center boom. I hope to have a cleareyed and productive discussion about how communities, especially rural ones, can maximize the benefits and minimize the costs of the data center projects popping up across the nation. Affordability for Americans depends on it. With that, Mr.
▶ 0:29:19Chairman, I request unanimous consent to insert into the record the written statement of the Lowden County, Virginia Board of Supervisors, Vice Chair Mike Turner, and I thank the witnesses for being here and I yield back.
▶ 0:29:30Without objection.
▶ 0:29:32Without objection. Now, we'll now introduce our witnesses. she here. I'm going to pay for this later at the baseball field. Thank you. I now recognize the chairman of the full committee, Chairman Williams, for an opening statement.
▶ 0:29:55That's a good recovery, chairman. Thank
▶ 0:29:56Thank you, sir.
▶ 0:29:58Uh thank you, Chairman Elie, for holding this very timely hearing and thank you to all the witnesses for being here today and uh joining us with this discussion on impact of the data center industry on rural communities and small businesses. The data center industry is growing rapidly and Texas is right in the center of the action. We are witnessing the economic and industrial revival with these businesses driving high demand for trade skilled workers and technical and trade jobs will be the backbone of the renewed American middle class.
▶ 0:30:27As Chairman Eli has explained, veterans come ready with many high demand skills that the data center industry needs. by making the SBA's Boots to Business uh program permanent. Last Congress, Chairman Elie, myself, and other colleagues on both sides of the aisle are arming our veterans with the entrepreneurial skills and knowledge necessary to step into critical roles and leadership, not only in the data center industry, but across any industry.
▶ 0:30:51One of my highest priorities is to encourage more young people to pursue career and technical education, also known as CTE. And in pursuit of that goal, I've introduced two bipartisan bills uh in Congress. HR1641, the Student Debt Alternative and CTE Awareness Act, and HR1642, the Connecting Small Businesses with Career and Technical Education Graduates Act of 2025. These bills promote CTE programs and help graduates of these programs to find jobs with small businesses.
▶ 0:31:21Now, career and technical education is critical to meeting the growing demand for trade skills, professionals, and building the future uh of America workforce. Ambitious and entrepreneurial electricians, HVAC technicians, and plumbers are finding an industry overflowing with the opportunity in rural America. Data centers cannot operate without small businesses to build and maintain them. And of course, every opportunity comes with certain challenges.
▶ 0:31:46We look forward to discussing them with our witnesses today as we continue exploring the impact of data centers across our communities. I want to thank again our witnesses again for joining us today and for your investment in the rural communities of Texas. With that, I yield
▶ 0:32:02Thank you, Mr. Chairman. Please know when sprints come March. And I'd like to add before we delve into our witnesses that uh as we talk about our veterans, thanks for the kind words, Mr. chairman that are dis our our veterans can be uh have the discipline to be trained to do anything and they have the drive to do everything. So they're going to be an essential part of this. Our first witness today is Mr. Chris Crosby, the chief executive officer of Compass Data Centers in Dallas, Texas. Mr.
▶ 0:32:31Crosby founded the company in 2011 after years of working at the intersection of technology and real estate development focusing on delivering scalable, customizable, and sustaining sustainable data center Since founding Compass, Mr. Crosby has led the company's growth from completing its first 1.2 megawatt data center in 2012 to developing campus scale facilities serving hyperscale customers worldwide.
▶ 0:32:58Under his leadership, Compass has earned recognition as one of the fastest growing companies in the country and has become a leader in sustainability and long-term infrastructure development within the data data center industry. Mr. Crosby holds a bachelor of science and computer science from UTA. Thanks for UT Austin for those uh not in the sixth district. Thank you for joining us. Our next witness is Mr. Kirk Offel. Mr.
▶ 0:33:23Ul is a founder and chief executive officer of Overwatch Mission Critical, a strategic data center consulting firm based in Austin, Texas. Mr. has had two decades of industry experience having worked in executive roles with Fortune 1000 companies and major data center providers worldwide. His career includes work with Medtronic Eaton Corporation, Huelet Packard's technology services consulting practice and others. In addition to his executive pursuits, Mr.
▶ 0:33:51Ul is the founder of the Data Center Austin Conference and the host of the Data Center Revolution podcast. He's a US Navy veteran having served aboard a nuclear fast attack submarine and was recognized as a member of the class of 2010 military top 40 under 40. And if I might add, if you are a on a fast attack submarine, you have gone to a nuclear uh power school and you're smarter than everybody else in the room. And clearly because of that hair, you are a submariner, not a pilot.
▶ 0:34:23I'm looking forward to hearing your testimony. I now recognize ranking member Morrison to briefly introduce our last witness.
▶ 0:34:29Thank you, Mr. Chairman. Dr. Nicole Turner Lee is a senior fellow in governance studies at the Brookings Institution and the director of its center for technology innovation. She's an accomplished tech policy expert focusing on equitable access to and impacts of technology with three decades of experience in research and advocacy. Her recent work includes a 2024 book titled Digitally Invisible: How the Internet is Creating the New Underclass and a chapter in the Oxford Handbook on AI governance.
▶ 0:34:59Before her time at Brookings, Dr. Turner Lee was the chief research and policy officer at the multicultural media telecom and internet council and the director of the media and technology institute at the joint center for political and economic studies. She's also served on federal advisory commissions such as the commodity futures training commission technology advisory committee, the department of homeland security IIA AI safety board and the federal communication commissions uh communications equity and diversity council. Dr.
▶ 0:35:27Turner Lee holds a BA from Colgate University and an MA and PhD from Northwestern University. She might compete on the smart front here. Welcome Dr. Turner Lee.
▶ 0:35:38Thank you all for being here. Uh before recognizing the witnesses, I want to remind you that you got five minutes. If you go over five minutes, I'll start tapping and then I start screaming after that. I now recognize Mr. Crosby for his fiveminute opening remarks.
▶ 0:35:51Uh thank you, Chairman. Uh thank you, Ranking Member Morrison and and Chairman Willis. Um and distinguished members of the subcommittee. Thank you for inviting me today to testify on how investments in digital infrastructure is revitalizing rural America. My name is Chris Crosby and I'm the founder and CEO of Compass Data Centers. After 25 years of working at the intersection of technology and real estate development, I founded Compass in 2011. We design, build, and operate the customizable, scalable, and sustainable foundations of the global hypers scale market.
▶ 0:36:21It's vital to distinguish our work from crypto farms or transient AI factories. We are um we build hypers scale campuses enduring civic infrastructure that supports the banking cloud commu cloud computing AI and social connectivity services Americans use every day. We're in the middle of the most significant economic transformation since Uh data centers are the equivalent 21st century equivalent of the railroads coming. Um they are now moving beyond traditional tech corridors into rural communities.
▶ 0:36:52They're bringing substantial capital, jobs and infrastructure investment. There's an outdated myth that data centers only provide temporary construction jobs. In reality, our campuses are 100red-year assets. They're part of the communities that they sit in, and they're in a state of constant evolution. In Red Oak, Texas, chairman's district, located um our investment has triggered a significant butterfly effect.
▶ 0:37:16We provide stable work for over roughly 1500 construction workers during the decade long buildout and anticipate over 400 permanent high-paying jobs. operations, maintenance careers, technology careers on the campus. We anchored a new industrial hub by partnering with Schneider Electric to build 105,000 square foot manufacturing facility next on our campus in the middle of our campus, creating an additional 350 jobs on the campus.
▶ 0:37:44Before our 2021 investment in Red Oak, new sales tax business permits in the municipality grew at a meager 12% annually, which for North Texas is not doing very good. Since we began construction, that growth rate has surged to 43% compounding. Data center campuses function as sustained economic engines, creating a butterfly effect of new restaurants, retail, housing, and other developments within the communities.
▶ 0:38:08And if you've driven through Red Oak, Texas, you see the bridges and the construction and the new schools and everything else that's coming along with it. On energy, large data centers serve as anchor tenants for the grid. Our national grid averages just about 50% utilization throughout the year.
▶ 0:38:25So by utilizing this underused capacity, we help take those fixed costs across more electricity sale and actually do put pressure down on the rates for families and not small business and and small businesses to pay less. Let me be very clear on this point. Data centers pay more so that families and business small businesses can pay less. There are scenarios where we are regulated to not be able to do that, but that is not for want. At Compass, we go even further with our co-serve model.
▶ 0:38:55To quote John Knight, the assistant director of economic development in Red Oak, Texas, Compass builds redundancy into our grid, supports our infrastructure. I love what data centers are doing to improve our community's quality of life. End quote.
▶ 0:39:09We fund transmission lines, substations, and interconnects through upfront contributions and aid of constructions, al also known as kayak payments, strengthening the local grid for However, outdated regulations still limit our ability to contribute even more. We need emission standards that distinguish the cleaner hydrotreated vegetable oil or HVO that we use, we pay more for than diesel from traditional diesel so that we can stabilize the grid during emergencies without penalty.
▶ 0:39:41We don't want black soot going in the air for our communities. We need the EPA to formally classify mandatory grid curtailments as emergencies, allowing us to support the grid be grid resources during extreme weather events like this coming week and risking without risking compliance violations. And we need regulatory flexibility to allow more proactive private funding for long-term grid infrastructure. That's private funding for grid infrastructure. Compass is built to last, which is why we invest deeply in our people and our communities.
▶ 0:40:10We partner with Texas State Technical College to create a scholarship pathway into high-tech, high-paying roles that don't require four degrees, uh, four-year degrees. The program is now scaling nationally. We're in our second cohort. We also work with veteran focused organizations like Overwatch and Salute to place skilled military talent and data center careers close to home. Environmentally, we preserve local resources by mandating water-free cooling since 2012 to protect our agricultural water supplies. In conclusion, Compass does not seek a free ride.
▶ 0:40:39We come with a multigenerational commitment to prosperity in each of our communities, ensuring that the AI revolution empowers every corner of our nation. I thank the committee for the opportunity to testify and for your leadership on this important topic, and I look forward to answering your
▶ 0:40:54Thank you, Chris. Now, I recognize Mr. Ol for his fiveminute opening remarks.
▶ 0:40:58Good morning, Mr. Chairman. Thank you, ranking member, members of the committee. Thank you for the opportunity to testify today. As an industry, we did not communicate early enough or often enough about our data center plans, and that created avoidable concerns. We didn't clearly explain what we were building, why it mattered, or how communities would benefit. And we've relied on the trust we hadn't yet earned. We're fixing it by increasing transparency, tightening our outreach, and making sure every community and stakeholder understands the mission, the safeguards, and the benefits.
▶ 0:41:25We know trust is earned, and you'll see that reflected in how we engage moving forward. My name is Kirk Oll. I'm the CEO of Overwatch and I'm proud to be a service disabled veteran owned small business before I ever set foot in a data center. I spent 5 years in the US Navy serving aboard the US nuclear fast attack submarine, the USS Memphis. That experience taught me something simple. You don't accomplish big missions with big slogans. You accomplish them with small, highly capable teams who know how to execute. And that's exactly what's happening in the AI boom today. Let me be blunt.
▶ 0:41:56Small businesses are the backbone of this entire industry. I'm saying the AI boom does not happen without us. Period. Today, more than 75% of the whole AI infrastructure ecosystem is driven by small businesses. We are the ones building AI factories. We are the ones pulling fiber, erecting steel, trenching conduit, fabricating components, hauling equipment, running logistics, and delivering professional services that keep projects moving. As our g as our grid gets pushed harder than ever before, it won't be big company flying in from out of state fixing that.
▶ 0:42:25It'll be a local electrician, local line crews, local engineering firms, and local contractors. Small businesses that actually understand the communities that they serve. We're going to see new small businesses pop up in manufacturing, equipment rental, transportation, environmental services, permitting, legal, security, cleaning, maintenance, you name it. And all the indirect jobs, housing, food, retail, childcare, all grow because of this work. And we've seen this before. Every major leap in American infrastructure has had the same outcome.
▶ 0:42:55small businesses become the biggest winners. They grew with the railroad era. They scaled during the electrification of America. They expanded through the construction of the interstate system. And they absolutely exploded during the automobile revolution. Each of those moments didn't just change the country. They created millions of small businesses that reshaped the American workforce. And today, we are living through what I believe is the fifth industrial revolution. a revolution powered by data, intelligence, and people who build and sustain the infrastructure behind it.
▶ 0:43:24AI factories are no different. They are simply the 21st century version of those earlier transformations, and they will become the next gen, the next great engine of American small business growth. Let me put some numbers behind that. For every hundred billion we invest in building digital infrastructure, we get 800 million in local tax revenue, 500,000 new jobs, 40 billion in labor income. And that's $140 billion boost to the US GDP. Now, I want to address the concerns we all hear.
▶ 0:43:52Energy, water, environmental impact, and job creation. All valid concerns. They deserve our attention, and they're beginning to get monitored very closely. But the answer is not to hit the brakes. The answer is the same answer we used when we built the railroads, electricity, cars, and the roads. We govern it, we guide it, and we build it more responsibly. People forget this, but the first cars were horribly inefficient, wildly polluting, incredibly dangerous, and brutal on city infrastructure. So, what did we do? We built smarter.
▶ 0:44:23We built safer. We set standards. And we improved efficiency. Progress doesn't happen because we avoid the challenge. It happens because we take it head-on. That is the American way. Today we have 5,400 data centers in the US. That's the most in the world. Hypers scale capacity doubled in the last five years and we're staring down the barrel of 5 trillion in construction over the next 5 years. The industry is on track to triple by the end of the decade.
▶ 0:44:48And for the first time ever, we have the ability to retrofit the past to take older facilities and make them just as efficient as the new data centers we build today. AI factories are the most transformational infrastructure America has ever attempted to build. Henry Ford enabled the movement of people and goods. AI factories enable the movement of data, intelligence, and services. And once again, they're going to create millions of small business opportunities just like cars did, just like the railroads did, just like electricity did. But here's the part that matters the most, and this is where my Navy background speaks up.
▶ 0:45:18If we don't build this infrastructure here, if we don't scale it, and if we don't support it with American labor and American small businesses, those jobs and that technology are going overseas. and they'll go to countries who have worse environmental standards, less transparency and strategic interests directly opposing our own. This is not just an economic issue. This is a national security issue. So to the committee, I'll leave you with a piece of history. Energy has never been a reason for us to stop. It's a reason for America to lead. Growth isn't a threat. It's an opportunity.
▶ 0:45:48And small businesses, they're not just part of this story. We are the story. Empower us and we will build the next generation of American infrastructure. fail to empower small businesses and we will fall behind nations that would love nothing more than to take our place. Thank you and I look forward to your questions.
▶ 0:46:05Thank you Kirk. Now I recognize Dr. Turner Lee for her five minute
▶ 0:46:10Chairman Elie, ranking member Morrison and distinguished members of the subcommittee. Thank you for the invitation to testify today. AI is changing the way we work, how we learn, get well, and interact online, as well as well as emboldening other transformative cases like speeding up the development of scientific discoveries and better evaluating climate impacts. But not all consumers have full access to AI, especially those with limited internet access or lack the digital skills to utilize it in their lives.
▶ 0:46:34Rural communities, especially small businesses and farms, have been historically left behind when it comes to technological innovation and can benefit from what AI offers. With vast topography, rural areas tend to have the land needed to support physical data centers. Technology can create avenues for economic development in areas like rural that are experienced declines in population and farming assets as well as insufficient access to highspeed broadband.
▶ 0:46:56Data centers have gotten increased invis uh visibility as economic drivers, but this will only be the case if they're building ways that are additive to the local community and bring limited harm to residents and local businesses. my testimony. I want to discuss the increasing explosion of data centers, but talk about how they require a national framework for resources, security, permitting, and community benefits. State and local leaders, business owners, employees, and residents should participate in planning and implementmentation together with technology companies, big or small.
▶ 0:47:24Communities must be actively involved at the onset of data center development and have transparency to assess the impacts of electricity, water, noise and light pollution, jobs, land use, tax revenues, all of which I detail in my written statement. With the various types of facilities including enterprise, hypers scale, collocation and edge technology companies are investing in larger facilities for greater computing power.
▶ 0:47:47More compute requires more space, equipment, electricity, and water, resulting in a set of unknown environmental hazards that we have yet to realize. Some tech companies are greatly benefiting from the explicit support of the president right now, whose favorable stance towards more data centers to compete with China has expedited permitting and bypassed environmental remediations as part of the tenants of the AI action plan. However, the current administration has also threatened to resend federal funding to states if they stand in the way of AI deployments.
▶ 0:48:17And just in December, the White House issued an order making states ineligible for B non-eployment funds if they threaten such threats to states through moratoriums and lawsuits are counterintuitive to the ultimate goal for having data centers in the first place, leaving communities without agency and conversations involving not just data centers but broadband in their community. More importantly, we must listen to communities.
▶ 0:48:39Data centers have been the central focus of some gubanatorial and state legislature campaigns during recent elections in New Jersey and Virginia and other places where consumers saw rising electricity rates coincide with unprecedented demand for new data centers. A middle ground must be met to balance the needs of advanced technologies with the demands of residents who just seek clarity, buyin and oversight in these data centers that are being built in their backyard. Further, communities should not feel the drain of data centers on their natural and generated resources.
▶ 0:49:07And with the environmental impacts still largely unknown, we need to make sure that the rollbacks that we made in the Biden Harris administration in terms of clean renewable energy sources do not have disproportional impacts in the future. I want to also say about job creation. Though we know that the rate of jobs are temporary and in some cases will not scale to the size of the data center itself, it's important for the rural workforce to be involved. Right now, rural workers are lacking in areas of trade as well as construction.
▶ 0:49:36These challenges offer opportunities for government agencies, businesses, and local governments to collaborate on solving those workforce shortages and rooting training in ways that those people stay in the community and become the pipeline for rural communities going forward. Data centers cannot be selective as well when it comes to who works within the facility itself. Small businesses should have the opportunity to bid on contracts for food services, security, and maintenance.
▶ 0:50:03And if these jobs are primarily remote, we need to ensure that broadband is available so that people who live in rural communities do not have to go to, as I found in my book, local hotels and 50 miles away to just access their jobs. There must be some foresight, my friends, about the long-term impact on surrounding communities, the environment, and overall resilience. This is especially important as fears over potential AI bubble escalate and feed the possibility of stranded assets in communities that essentially have given the green light to data centers along with millions of dollars in tax incentives.
▶ 0:50:33Communities should be asking about the plans for stranded or deserted buildings, how they can be repurposed and better integrated into the community or else we're going to find oursel like China with a lot of idle buildings. I envelop my remarks around this idea that data centers should be responsibly and ethically designed and built. And I leave this committee with my closing thoughts. Ensure early collaboration among all of the telecom, all the utilities, energy, water, and telecom, and even real estate. Develop community benefit agreements that resolve and make major public concerns around data centers transparent.
▶ 0:51:04Focus on job creation. Consider smaller data centers when appropriate, but they don't need to be big. Create safeguards for communities. And allow communities the opportunity to say no when they want to say no and they do not feel that they involved. Thank you again to the members of the subcommittee and I look forward to your questions.
▶ 0:51:24Thank you, doctor. Uh we'll now move to the member questions under the five-minute rule. I'll recognize myself for five minutes. Um, Chris, Texas has emerged as a leading data state for data center development because it's got affordable land, it's got plenty of energy, and it's got a an and relatively um easy regulatory What else makes Texas attractive to data
▶ 0:51:53The growable workforce that comes with it. uh you know as we continue to bring new people into uh the data center data center space we call it the new collar workforce um the ability to to attract uh employment in in Texas is is fantastic and uh when we launched our the vocational school in conjunction with Texas State Technical College um went through the first cohort you know immediately the first class is all hired second class is already prehired uh that's going on right now we we just we have a workforce
▶ 0:52:24where we've got youth we've got new people coming in uh and and in these communities like Red Oak uh the commitment and the partnership with the local community really helps with that front. I you know that can do attitude in Texas has been fantastic.
▶ 0:52:38Well, if it's predictable, does that reduce uncertainty for you long term for these data centers and their success?
▶ 0:52:46It's a great question. We we h we look at things that we don't exit. There's a big difference if you build to exit versus build to last. uh you make a lot better decisions just like if you're going to remodel your home, you're going to and you build it to flip it or you remodel to flip it versus you remodel to stay in that home. And and that's where a lot of great sustainability decisions get made. We view ourselves as 100-year campuses. Uh these facilities will have multiple refreshes over that time frame, both from an IT technology as well as from a mechanical and electrical plant. And they're going to be long-term parts of those communities.
▶ 0:53:15They're are living, breathing, active machines in those communities. So it is that when you have certainty and you you know that you can have that you can make the multi-billion dollar type of investments that we make and look at it in the 40 plus year horizons that we look at it from an investment perspective.
▶ 0:53:31And you mentioned John Knight. So you built this data center with the encouragement and the cooperation and the oversight of the local government.
▶ 0:53:40That's correct.
▶ 0:53:41So they're fully on board with everything you're doing. This didn't need to come from Congress. This didn't need to come from Austin. they did it themselves and they know you're going to be an integral part of the community already, right?
▶ 0:53:51That's a huge part of our selection criteria. We want to go to the places where people are. I can't speak for all developers. There's class A development and there's not. Um but when you're doing the right thing and and you you want to put long-term invest you don't want to have people picketing a site that that you're planning to try to get somebody to stay in for 30 years. Who wants to go work in a community like that? We go to the places where they they welcome the investment.
▶ 0:54:13They welcome the transformation of their communities and and like I said I think it's akin to having you know the railroad was probably pretty loud back in the 1800s and you know the communities that passed on that it didn't work out so well for them those that passed on the federal highway system those that passed on the international airports in the 70s you know it did not work out long term for those communities and data centers are that now we are uh AI is like electricity we don't know all the applications that's going to be used for it is a foundational comp tool
▶ 0:54:44and it's going to continue to uh create
▶ 0:54:47Speaking of opportunities, Kirk, tell me about how veterans meet the threshold for what you're looking for in in these data centers.
▶ 0:54:55I appreciate the question, Mr. Chairman. You know, we we talk about data centers because it's measured in mission critical. Mission critical means that you could quantify the downtime in dollars or death behind one second of lost infrastructure. I would argue that everyone that's put on the uniform and took the oath has once entered into a mission critical environment that isn't measured in downtime, but it's measured in their own mortality. The state of Texas and what Chris was saying and why it's such a robust state. The sky for the cloud is Northern Virginia, but the home for AI will be Texas.
▶ 0:55:26It has 116 higher educational platforms, 15 military bases, and four of the most populous cities in the United States. Not to mention has more natural resources than any other state in the union, including Alaska and Montana. So, we have the best access to the biggest workforce. There's a massive amount of veterans coming out of the military that have been exposed to the most advanced weapons, machine, and technology ever built. And the military is best known for being one of the largest leadership incubators ever built.
▶ 0:55:53So, we are not only this industry does not it's not lacking genius or intelligence. It does lack leadership. It lacks courage and veterans are trained and conditioned and pressure tested in all three. So, I think that veterans have the highest likelihood. I have three kids that are in college right now and I tell them that that college degree is about as useful as a taxi medallion in a few years because you could spend four years in the military and find yourself with a higher demand of opportunity that has the highest overall total earning potential versus something that you could find today going to college.
▶ 0:56:25Nailed it.
▶ 0:56:27Nailed it.
▶ 0:56:27Thank you.
▶ 0:56:27Okay. I now recognize Dr. Morrison for five minute of questions.
▶ 0:56:32Thank you, Mr. Chairman. Dr. Turner Lee, are data centers being constructed to meet current demand or anticipated demand? Uh, and if the tech bubble does pop, will these data centers still be Thank you for that question, ch uh ranking member. Um, I do think that data centers are necessary. I mean, the current compute demand of AI is is out the box, right? In terms of everything that we're doing in every day, as well as what we're trying to do with future scientific discovery.
▶ 0:57:01I also think that it's still unclear whether or not we're going to be able to grow these functions in the future into the current data cent assets that we're building uh in in the present. And so I think we need to have the type of assessments that are done to sort of have some predictability in marketplace of how we're going to foresee that growth. But I also think that you know there are other types of data centers that can be built to accommodate what we're talking about with AI.
▶ 0:57:26Thank you for that. And what would happen to these data centers and the associated jobs if the tech bubble does
▶ 0:57:34Uh, one of my fears, and we've written about this at the Brookings Institution, myself and Daryl West, my colleague, is that we do need to have programs that leave workforce opportunities within rural communities after the life of the data center. So, it's particularly important that we have programs that sustain themselves where those carpenters and electricians and welders are receiving training as well as reertification using AI and they're able to bring that asset back into their communities post the life of this one uh infrastructure asset.
▶ 0:58:03Thank you. Uh the Environmental Protection Agency has announced that it will no longer consider the health benefits of reducing air pollution and regulations. Still shocking to say those words. Cutting human health protections in favor of the fossil fuel industry. I'm a physician by trade and I'm deeply concerned about the health impacts of air pollution.
▶ 0:58:26Given these roll backs, how could air pollution from fossil fuels and backup diesel generators spurred by data centers affect public health in rural areas?
▶ 0:58:36I definitely think the use of the word public health is is uh meaningful in this conversation. And I think given the community response to the environmental concerns with that being the case, as you've mentioned, the roll back on the 11 billion Biden Harris investments for clean and renewable energies is a role is a setback and we want to make sure that we're not setting back the progress because I think most tech companies, including my colleagues here, want as much as electricity as possible and want to tap into every electron.
▶ 0:59:02With that being the case, when workers are sick in rural communities because of these environment impacts, small businesses suffer. when young people are sick due to our asthma and other related environmental illnesses, they don't go to school. And so we want to make sure that we're not have having a bigger impact, I think, on the community given the fact that we know very little about the environmental impacts.
▶ 0:59:24Thank you for that. Uh, how much electricity and water does the smallest hyperscale data center consume?
▶ 0:59:32Well, I will say this because I am not a scientist by trade. I'm a sociologist, but we do know hyperscalers do not exceed, and my colleagues can correct me if I'm wrong, about 100 megawws. Um, in terms of electricity, we also have to consider the offsite electricity that is used. Um, some tech companies are being responsible. We've seen that with Microsoft in terms of trying to figure out ways to build substations or take advantage of other electricity outlets. But again, it's not just the building where the electricity is being consumed.
▶ 1:00:01It could be other buildings across the community that have to power and generate the same amount of p uh uh generate and consume the same amount of
▶ 1:00:09And what about water? How much water is
▶ 1:00:11Yeah, water is tricky as well based on the size of the data center. We still see a continuous flow of water. Again, given the fact that there's been advancements in science when it comes to uh closed loop systems or using recycled water, I'm I'm very excited about these opportunities. Again, water consumption is critical. Data centers have to be cooled and if they are not cooled it sort of takes the whole investment and throws it out in the in in the wayside.
▶ 1:00:37I'm glad you referenced that. So depending on what cooling systems a data center uses because they use different ones, it may consume even more water or more electricity. Can you just briefly walk us through the tradeoffs trade-offs of each type of cooling system?
▶ 1:00:51Well, we already know that we have an outdated and archaic national uh water irrigation and irrigation system. So I think that is a cause of concern. I also think what's interesting too is that we probably need to use ranking member more AI to help us to monitor the type of water that is going into these units as well as ways in which we can save residential households money you know by the consumption communities that are adjacent to data centers are really not getting I think the best of AI when it comes to these winging
▶ 1:01:21water and energy consumption measures.
▶ 1:01:25Thank you very much and I yield back Mr. Chair. Thank you, doctor. I now recognize Mr. Finstad from Minnesota for 5 minutes.
▶ 1:01:32Thank you, Chairman Elz. Uh, thanks for holding this important hearing today and thank you to our witnesses for being here. As the representative for from the first district of Minnesota, a district that is founded on farming, healthc care, manufacturing, and small businesses, which have helped sustain our rural areas. Innovation is more than just a slogan to us. It's a way of life. With the rising demand for artificial intelligence, data centers are moving to rural areas like the ones I represent in southern Minnesota because of the availability availability of land, our climate.
▶ 1:02:01We're nice and cold, especially right now in Minnesota, and our access to power. For my district, data centers can be economic anchors in their regions, improving local supply chains, and providing job opportunities for skilled trades people. At the same time, I want to acknowledge that the concerns that I'm hearing from my constituents regarding energy and water consumption, affordability, grid reliability, particularly from farmers and small business owners and families.
▶ 1:02:25People want assurances that new energyintensive developments won't increase their utility bills or put a strain on local power and water systems. This hearing today is about ensuring that rural districts like mine are ready to take advantage of innovation while solving real problems like labor shortages and energy security. I look forward to to uh the the discussion uh today and learning more about ways we can empower rural America to lead on this next wave of innovation. So with that, just a couple questions. Uh Mr.
▶ 1:02:53Crosby, many of my uh constituents in southern Minnesota are concerned, have questions, maybe just don't know for sure. Uh in regards to I guess the questions I hear is really, you know, the big energy intensive facilities like data centers, they're new to us. uh they may increase electricity prices or put stress on our local grids. Uh we just heard a little bit about the water discussion.
▶ 1:03:15You've made the case that data centers can serve as an anchor tenant that reduces cost by spreading out fixed infra infrastructure costs and making upfront grid upgrade payments through uh contribution uh in aid of construction. So what's your company doing to ensure that data centers uh and development in rural areas does not increase energy costs uh for community members and small businesses? Thank you for your question.
▶ 1:03:39Uh we are we do not go to these environments and and look for the environments to pay us on these. So we build infrastructure. Uh we we've bought land and transferred it to the utility company for easements. We've bought we pay for transmission. We've paid for switching stations, substations and the like. We we that's our infrastructure that we that we are utilizing.
▶ 1:04:01uh almost every single time that involves additional infrastructure such as in Red Oak that other parts of the community can use that we pay for uh in order to bring it there. So, additional switches uh on a switching station as a for example. The other um aspect to this is that we are trying to work as well uh with with the regulatory bodies on trying to get data centers become grid resources. So, we're going through this cold snap right now.
▶ 1:04:26During Storm Yuri, if data centers had been allowed by law and not threatened with criminal penalties to operate, we 12 people would not have died during Storm Yuri in the state of Texas. Uh we can be stabilizing um islanded bodies. I will tell you not 100% of my colleagues would say the same thing, but all of the class A folks will absolutely look at that as we can be the stabilizing factor for the grid.
▶ 1:04:52When we do that, we utilize infrastructure that's not being used right now because it's, you know, 50% utilization when it's not during those peak time frames. So, you have a very small amount of hours per year where if we could be utilized by grid operators, we could actually reduce down costs for consumers and stabilize the grid with it being our
▶ 1:05:13Thank you for that. Uh, Mr. Of in your opening comments, uh, I think you hit the nail on the head when you talked about we probably haven't done a good enough job explaining what the opportunities are, what the real economics look like, what the the risk and reward is in this new emerging uh, industry. Uh, I like to say uh, around the halls uh, in this town, you know, you start talking about data centers, AI, cryptocurrency, cyber security, and you get a glazed look over a lot of people's eyes.
▶ 1:05:40And these are policy makers that are hopefully in a position to educate themselves and make decisions on the very issue that we're talking about. So if we have a if we have a problem here in the halls of Congress understanding some of the the details of what we're trying to do in this next generation of opportunities, it's easy to assume that our neighbors are having that same that that same issue of understanding.
▶ 1:06:01So maybe do you have some thoughts about how we as policy makers but how the industry is is taking strides to make sure that we can talk to our neighbors about what does this mean in our backyard in regards to energy and water and the value that it adds to communities.
▶ 1:06:16Yeah, thank you sir and I appreciate the question. I think this is a great opportunity for us to reshape the mindset and the way that we view this. So I'd ask you as this committee to flip the binoculars around and open up the aperture and let us revisit this. I think this is something that people tend to be very scared of because some of these things that they've been introduced like the some the type tech of technologies you talked about are very fattish where what we're talking about today is a data center which will have it's a transformational infrastructure that have a greater impact on humanity since we've seen empowered flight.
▶ 1:06:46This is something that's coming and it's coming to stay. So, I think that if we can pause, I think that we could help people become more educated. And as we be as we do that, they're going to become less fearful of what these data centers are. And we shouldn't see them as a building. Data centers aren't a building. Look at them as a career field and an opportunity to build back the middle class with highpaying jobs that don't require college degrees. Thank you for your question.
▶ 1:07:09Yeah. Thank you, Mr. Chair. I yield
▶ 1:07:11Thank you. I recognize Miss Goodlander from New Hampshire for five minutes.
▶ 1:07:15Thank you, Mr. Chairman. Thank you, Ranking Member Morrison, for convening this important hearing. To our witnesses, thank you so much for being here today. We're on a really good streak with this committee because yesterday we passed two common sense, bipartisan bills that go to the core issues around small businesses and artificial intelligence. And I couldn't agree more with my colleague from Minnesota. The Congress should be spending way as much time as possible on this important issue. This is a transformational issue.
▶ 1:07:44We've never seen a revolution quite like this. AI revolution. You know, when we talk about data centers and other innovationdriven investments in rural areas and I come I represent the most beautiful district in the nation, a very rural district. Uh where I hear every day about the pain people are feeling from high costs across the board.
▶ 1:08:06Uh my priority is to make sure that these projects that these innovations aren't going to shift new burdens and new unbearable costs onto hardworking people who are already feeling a whole lot of pain right now. When we talk about energy costs and data centers, you know, I start from the premise that New Hampshire has some of the highest energy costs in our country.
▶ 1:08:30You know, this week we are on track to have some of the coldest days of winter to date, and the people I represent cannot bear higher electricity bills, higher energy costs. Um, I appreciate the the testimony of of of our witnesses so far. Dr.
▶ 1:08:48Turnerly, I wanted to ask you um how you would advise Congress to think about um the real ways in which data centers what we actions we can take to make sure that no costs are uh shifted in an inappropriate way onto people who just cannot bear the pain of higher costs right now.
▶ 1:09:06Thank you very much for that representative and I agree affordability is a huge concern for many consumers that are sort of resisting data centers to date. Um, it's important for Congress to continue to have the dialogues that we're having around updating and modern modernizing the energy grid. Uh, clearly this is a conversation of 20 25 years ago and we're putting on top of a outdated energy grid more resources that I think will continue to strain those communities.
▶ 1:09:30I also think it's important for uh public utility commissions to be at the table in these conversations because they set the rates for uh rate payers and it's also important for tech companies who are coming in and draining some of those assets to talk with PUC's uh local governments um and consumers actually to figure out ways in which they can set clear standards and rates for what electricity should look like.
▶ 1:09:55I mentioned earlier what Microsoft has done for example recently in their announcement about a community AI first is to uh have set in certain rates that they pay whether or not there's a variable increase or decrease in energy consumption and we need to see more of that so that they're footing the bill as opposed to everyday Americans.
▶ 1:10:13Well, I want to ask also about water security and water costs because when we look at utility bills in New Hampshire, what we've seen in so many of the towns I represent, um, particularly in the southern part of my state, big foreign corporations have come into New Hampshire, uh, polluted our water, eliminated our wells. Uh, the costs of clean water have never been higher in our state. In your testimony, Dr.
▶ 1:10:39Generally, you you speak about water impacts as one that are as impacts that aren't often fully understood until uh after a project has become underway. I I hope you might be able to speak a little bit more about that to your really important point that we need to be clear about the costs upfront.
▶ 1:10:57uh what can and should Congress be doing to make sure that we've got clarity and that we're putting all our tools to use to make sure that these important developments uh don't actually undermine core function of government which is to make sure we've got clean water for our
▶ 1:11:14Um I appreciate that question and as I've said in my oral statement as well as written, it's important that Congress support states and allow them to be part of the negotiating table. you know, when we put barriers for Congress uh for state leaders to sort of actively think about how these data centers are positioned in their community, we actually burden them as well and we move remove them from the table. So, I think Congress should really move away from moratoriums and restrictions on states to be actually involved.
▶ 1:11:41I think community benefit agreements might be another way for us to negotiate out uh these speculative uh opportunities that are being promoted to communities. Um, Lancaster, Pennsylvania, for example, just did a $20 million community benefits agreement that also includes quality of life factors, air quality, water qu consumption, uh, other educational assets, jobs.
▶ 1:12:05We need to see Congress promote and support states actually engaging those community benefit agreements because I think it will get to the broader question that you're asking, Representative, which is how do you just put everything in the bucket and make sure communities come out safe when this is all said and done. Well, thank you so much. Uh, I yield back, Mr. Chairman.
▶ 1:12:23Thank you. I now recognize Chairman Williams for five minutes.
▶ 1:12:26Uh, thank you, Chairman. Thanks again to the group being here today. Uh, Mr. Crosby, the data center boom has led to some growing pains, especially in meeting the workforce demand. However, the industry is already taking steps to address this challenge. Now, what steps have Compass Data Centers taken to build partnerships, including public private partnerships and career and technical education programs to address workforce
▶ 1:12:49Thank you for your question. Um, the Texas State Technical College and ourselves, uh, we we we were looking for a partner to to start a school. Uh, we scholarship the school and then we brought in all of our partners, all of our suppliers, our customers, and our competitors uh, that now all sponsor this program. It's called MEI. It's in in based in Red Oak.
▶ 1:13:10Uh we are now also donating a facility a little later this year uh on the campus to uh allow the students to have a place to practice it in which our not only our client but also our equipment suppliers are donating equipment for them to be able to work on it. We plan to replicate this model in multiple markets where we have these levels of investment. These are, you know, when you when all-in type investments are north of $20 billion, you need a long-term workforce. Uh this is something that we work very closely with.
▶ 1:13:38We've had great uh great work with Ellis County and Red Oak officials have been super supportive of it as well. Uh I think the private public partnership is is a very easy way to do this.
▶ 1:13:48Okay. Uh how do you interact with local communities before beginning to build data centers to ensure there's an equal partner and valued stakeholder? We've talked about communications. You can't have any you you can never be too short on communications. So
▶ 1:14:01that's right. um the the challenges that that have been brought up by the doctor are are not uh I would say they're not very common today but they are still come I mean they still come up and when you when you do not engage with these communities properly so for example when we walk into a community a lot of people have a myth that these are going to use a lot of water it's not true we don't use water at our facilities uh for those purposes so we'll end up in these in these meetings we engage with this community we sit in the meetings uh with the hearings the public hearings answer their questions Our
▶ 1:14:32most recent one we had in Statesville, North Carolina. We had people that had no stickers that took their no stickers off at the end of it as they learn more facts. The key is education and the key is doing the right thing for that community. That that means you've got to be built to last. You cannot be built to exit in this
▶ 1:14:48Yeah. Sometimes you get one crack at it and you got to get it right.
▶ 1:14:50Yes, sir.
▶ 1:14:51Uh Mr. Oel, the growth of the data center industry has brought massive demand for trade skills. We've been talking about that all day here. However, the demand for electricians, uh, HVAC technicians and plumbers has outpaced supply, and I know in Texas, we're short of welders. We always are short of welders. Now, uh, your business, Overwatch mission critical, is actively working to address this problem. Uh, what methods have you found most effective in developing necessary workforce uh to grow this economy in your industry?
▶ 1:15:21Thank you for the question, Mr. Chairman. It's simple. Uh, we have tried to approach this from multiple dimensions. One was with a bunch of band-aids. We tried to figure out how we can transfer people that were in adjacent verticals of industry into this industry and we realized that it the adoption rate of emerging technology specifically driven because of the surge of AI has allowed us to discover that that strategy is no longer tenable. I'm at a point right now where we need to create another apprentice program. This is the fifth utility. This is the fifth utility.
▶ 1:15:52We need to have an apprenticeship and journeyman program associated just to this. We needed our own dedicated apprentice program. And we've partnered with a group, a small business, veteranowned small business in Dallas, Texas. And we've partnered with them to create an incubator that could put 1,200 people through that program a year that'll be certified in data centers. They could join the workforce immediately and be a data center
▶ 1:16:14There's 10,000 kids a year dropping out of or 100,000 kids a year dropping out of school in Texas in the ninth grade. They're losing hope. And we got to be able to show them that it's not about being architects. business people or whatever, plumbers, welders, carpenters, technicians. It's important you do this because we can save a lot of kids who are now dropping out of school and and we're losing them.
▶ 1:16:35the the largest demand for labor is in this vertical. This industry grows faster than every other industry on this planet because the growth of every other industry on this planet and there's no sense sending our kids to college for data centers. But whatever they would be exposed to or learn their freshman year would be obsolete by the time they graduated. There's 6 weeks, 12 weeks, and 18week programs that are designed for high school kids, as well as the 17,000 people leaving the military and active duty every month.
▶ 1:17:01There's a large massive workforce of trained people coming out of the military that we are looking to adopt. And those people will help us lay out a road map to where we could support people transitioning right out of high school. They just don't know the industry yet. And right now, everybody is telling them that they need to be scared about it. We need to fix it. Well, in the time remain, take take it to them because there's these 100,000 kids need to have an opportunity and they'll hire their friend, too.
▶ 1:17:26Mr. Chairman, I yield back.
▶ 1:17:28Thank you. I now recognize Mr. Oeski from Maryland for 5 minutes.
▶ 1:17:31Thank you very much, Chairman Eli, to Ranking Member Morrison, and to all of our witnesses today. I appreciate your time and your presence. Uh my district in Maryland is home to many beautiful rural communities in both Baltimore and Carol counties uh which affords our state flourishing farmland and engaged small businesses. Agricultural preservation is a top priority for our district since 1980. Carol County alone has preserved nearly 81,000 acres with over $200 million invested.
▶ 1:17:59Prior to coming to Congress as Baltimore County Executive, I helped push our number to over 71,000 acres of farmland preserved in Maryland. Our farms account for billions of dollars of economic activity. They are a critical part of our history and our economy. Although we do not currently have a data center in Maryland, uh there are plans to have one uh under development in Frederick County and others are being considered across our state.
▶ 1:18:25For more than a year now, Baltimore, Frederick, and Carroll counties have been contending, frankly, fighting a proposed 67 high uh mile 67 mile high volt voltage transmission line known as the Maryland Piedmont Reliability Project or MP needed to fuel power in data centers in Northern Virginia. Power that we worry frankly uh is simply being transferred from Peach Bottom, Pennsylvania to Northern Virginia.
▶ 1:18:53Sadly, our questions to clarify this has gone completely unanswered both by PJM and by the project's developer. Worse, eminent domain has been proposed. So, unfortunately, that reliability doesn't seem to cover the Maryland rural communities who are facing the project's burden. Even worse, to Miss Goodland Miss Goodlander's point, the cost of this project, $424 would fall on Maryland rateayers.
▶ 1:19:20rate payers who are already crushed under a cost of living crisis and increasingly high utility costs in our state. I understand that trans transmission lines play a role in modernizing the electrical electrical grid. Uh however, my constituents and I have been very vocal in expressing these concerns. Um our communities have worked for decades with millions of local and state dollars invested to conserve this land for future generations to preserve the economic activity on these lands.
▶ 1:19:47Now they're being told it must be sacrificed and their livelihoods disrupted for a transmission line that won't even offer them benefits and yet these constituents are being asked to pay for it. I guess I just open with a question for all. Is is that fair? Does that make sense?
▶ 1:20:03Well, I'll start uh Representative uh and I want to also say to you Maryland does have beautiful farmland. I spent a lot of time in Garrett County, Maryland as part of my book with farmers as well as small businesses, entrepreneurs and residents. uh the translation bind project I do write about in my written statement and I think it is one of those examples where we do see a lack of coordination between all the actors and I do agree with my colleagues a lack of transparency when it comes to information about what is being done and what is being built um the revenue should come on the side of the companies not the taxpayers
▶ 1:20:34um because the revenue that comes from the companies can take those communities even though they don't have a data center but they can possibly build you know a better school a better firehouse uh better broadband for that matter matter. And so I do say to you, I do not think it's fair that the community is sort of left in the dark and are going through several challenges to understand why, when, how this project is actually going to pan out for
▶ 1:20:56Appreciate that and you including it in your written testimony,
▶ 1:21:00Yes, thank you. Um I look, I I agree with a lot of your points. Um I I don't think it's fair for us to come to communities and just say you it's on, you know, it's on you as a community. Those days were decades ago. uh there are new a lot of new players that are doing that sort of technique and check their capitalization and check their track record. That's what I would say if you're a community looking at these groups. The other thing I would state is this should be a very bipartisan ind uh issue.
▶ 1:21:28Transmission upgrade is absolutely necessary when we trans when we transmit electricity at 69 KV 130 KV 90% of it is lost in the air versus high
▶ 1:21:4090%. That means we don't have to produce more generation. That means we have generation that just gets wasted and this is one of the biggest things that we should that that all parties should should rally around. We need to upgrade this. That's the easiest cheapest way for us to do things and data centers want to contribute to that. Come to any of our locations and you will see that brand new transmission at high
▶ 1:22:01and I appreciate the consensus from two you just with my 30 seconds left and Mr. Oel hopefully I'll give you a chance to respond as well but I just want to put on the record Mr. chairman, a 2024 uh Lazard levelized cost of energy uh report as well as a next era energy's 2025 investor presentation. Um without I ask just unanimous consent to enter those into the record. Thank you very much.
▶ 1:22:22Just wanted to point out that um renewable energy projects um according to these are both cheaper and faster to um get built to help fuel this this need. So, I appreciate our opportunity to look at that and uh I apologize we didn't get to you on the answer there, but I really appreciate your testimony. Thank you. I yield back.
▶ 1:22:39I now recognize Mr. Schmidt from Kansas for 5 minutes.
▶ 1:22:44Thank you, Mr. Chairman. And like my colleagues, I want to thank our witnesses for being here today. It's a it's a it's a topic not new to you, but still very new to many of the communities that we represent. And it, like a lot of new subjects, as has been suggested here today, it tends to present itself in different ways in different communities. Um, and um, I've listened carefully during the time I've been here to some of the suggestions and responses you've had uh, regarding questions about community engagement, which I appreciate very much.
▶ 1:23:12Let me ask just a much more sort of global question on that. So, I I came out of state government. I'm a state and local control person philosophically and and I believe it in my bones and I'm certainly not advocating something different here. Having said that, one of you at least compared in your written testimony the development of the data center center industry to the development of the railroads.
▶ 1:23:33And obviously 150 years ago that was uh a nationalized policy conversation that resulted in national control some of which you know we still deal with the downstream effects of that today. But it also created a tremendous industry. And I I guess I would just ask you to speak either with particularity or or philosophically about as you look forward how how this industry is going to grow.
▶ 1:23:56What's the right balance between u federalizing some of these decisions standards requirements and leaving it to those case byase local advocacy uh decisions? And we can just go down the road. Mr. Crosby,
▶ 1:24:10thank you. Look, I I I believe that the local is always the first first approach. Um, you know, there were comments about water and water usage. Those are negotiated locally. Those are not negotiated on a on a big basis. So, those communities are making those decisions live. Uh, and and we see that uh the state of Texas has an advantage um in some ways because FK is not engaged with with some of the things and and the ability to adapt technologies a little bit faster to try new things.
▶ 1:24:37I think speed is one of the elements where there's a there is an aspect where you're continually making adjustments, continuous improvement types of items as you get feedback uh from from these sorts of infrastructure investments. We are putting in massive amounts of capital into the ground uh and and into the wires that are that are going ahead building plants. Renewables was mentioned data centers have have been data centers and data center users have been responsible for over 70% of the PPAs that are around renewables. We are driving change.
▶ 1:25:07We want to do the right thing. The top companies definitely do and let us work with those communities uh to to continue to innovate and come up with these new new and creative ways to do things. Mr. Rob.
▶ 1:25:20Yes sir. Thank you for the question. Just to put a pattern together for a bit of history, when we started with the first uh major infrastructure upgrade in America, the railways, the number one concern was energy and the number two was environmental impact. And when we did um the electrification of the grid, the number one concern was energy and the number two was the environmental impact. The third was the interstate highway system and the fourth was the automobile.
▶ 1:25:44And in every case the the primary theme has always been energy and what is the impact on environment and now we're evolving to what are the jobs that are being created as a byproduct of these vertical industries that are emerging. The things that take a industry like ours which is niche and today this represents the fact that we're now on the mainstream is industries that like the automobile industry when we were rolling those cars out on the road they lacked safety regulation oversight governance regulation and many would argue ethics.
▶ 1:26:12some of the same things that you are challenging us on and justifiably so today. The answer is we have to have a partnership with you. We must be working with all elements of levels of government and we need to be able to make sure that someday you understand that we're no longer consumers of your utility. We're creators of it making us partners of it. We will be able to reinforce and I think in your district what he was talking about was to have the ability to island ourselves.
▶ 1:26:38If we have since the birth of this vertical 55 gigs of energy on the grid, we're under construction today for 40 to 80 gawatts of natural renewable energy. Meaning that we will not only put our own energy on the grid and tie it into the grid in a closed transition, allowing us to co-generate. That gives us not only the ability to move the needle to the left, but we reinforce that grid so that the people that are out in the urban areas aren't at risk of losing power because data center providers are the ones that are building it.
▶ 1:27:07And today with the exception of a few misfit toys, we are at zero water design on data centers. We don't use water for the same reason you don't use water in your radiator which is a closed loop system. It doesn't absorb and reject heat fast enough. These data centers are so dense that we can't use water. So we're here to partner with you on creating more water and we are partners to the utility. We will become a utility ourselves.
▶ 1:27:30Doctor, I have 10 seconds.
▶ 1:27:31Yeah, I just 10 seconds. I I actually challenge the railroad analogy. So I'll start there. um because I think we need to think about the railroad as it allowed rural communities to become transit points for the way in which we were actually uh moving trade and data centers that actually may be incentivized to bring more profit to companies versus people. So I want to actually challenge that because I think AI needs more industrial policy in many respects to ensure that we get national benefits.
▶ 1:27:56I would just say outside of just the energy policy for the Congress, I think it's important for Congress to also create a certain environment in the marketplace tariffs, uh the availability of crit critical minerals, our availability to have the aluminum that's going into the building. It's all uncertain right now and I think those costs could actually be passed on to communities if we actually don't get the certainty of the marketplace right in terms of our congressional policies.
▶ 1:28:18Thank you. I yield back, Mr. Chairman.
▶ 1:28:20Thank you. I now recognize Miss Sculton from Michigan for five minutes.
▶ 1:28:23Thank you, Mr. Chairman. Um, Dr. Turner, every two years we pass a bipartisan water resources development act which authorizes the Army Corps of Engineers to address water supply needs uh and carry out vital infrastructure projects. I'm happy to report that the committee has been hard at work to develop the seventh consecutive bipartisan WERA to navigate local water resource challenges, boost regional economies, create jobs, and protect our natural environment.
▶ 1:28:53What is the importance to our rural communities that WERA is passed in a bipartisan fashion?
▶ 1:29:00Uh, extremely important. I have nothing else to say, but I think we do need to keep passing this because that's actually going to allow us to negotiate through some of these challenges that we've been talking about today.
▶ 1:29:09Absolutely. Um the few operations jobs that data centers create uh require IT expertise meaning individuals in career and technical education um careers in uh technical uh education will be increasingly in demand. Last week I introduced my bill uh the honoring vocational education act which would permanently establish a survey on educational attainment within the skilled technical work workforce.
▶ 1:29:38It's it's critical uh to advancing and maintaining uh a skilled workforce. We have to ensure that skilled trades people and technical workers are fully accounted for uh in federal workforce data, especially when these jobs are becoming so critical to building and supporting innovation. Again, uh Dr. Turner Lee, what is the role of career and technical education in ensuring that these local jobs um can be filled um and created as data centers are are uh developed?
▶ 1:30:08I completely agree with you. Uh, a couple years ago when we had the bead money, I did the same thing with broadband because these are livable wage jobs. They're jobs that we need to build the infrastructure. Just as the Hoover Dam, we had to build that dam. We have to find workers to do the same thing. I think we need to continue to invest in technical training. But I also want to make sure that there will be jobs that have some IT slant to it because technical jobs, even your greatest plumber has to rely upon AI in some way or form to do their job. And so it's important for us to balance that.
▶ 1:30:38How do we actually do the acute, you know, uh, faculty skills alongside making sure rural communities and rural citizens know how to actually maneuver through AI
▶ 1:30:49Absolutely. They go hand inand and have to be developed together. Uh, one last question for you, Dr. Turnerly. In your testimony, you discussed the importance of ensuring early collaboration between utilities, local governments, and their rural communities. Just last last month in my district, uh a planning meeting for a data center in Kent County was cancelled due to over capacity with hundreds of residents showing up to make their voices heard in these discussions.
▶ 1:31:16How can we as members of Congress help facilitate and support these conversations to ensure that residents aren't left in the dark as planning for these data centers continues? Well, I want to agree with my colleagues um particularly the small my colleagues who are in a space where they're working every day with some of these local communities and I commend them on the efforts that they have put forth.
▶ 1:31:37I do think Congress should put out some type of data center literacy uh act something that allows people to know that this next stage of innovation if we're comparing it to the railroads is an all-in project. Everybody needs to be at the table. I think we're seeing these rooms full to the brim because people are really worried. They're worried about the things that they know based on what the media is telling them. They're worried about the things that they don't know. I think it's an easy fix if we actually find ways to raise their literacy around what data centers are, what they do.
▶ 1:32:05And I actually would say that we connect this to AI literacy bills so people know that when there's a data center in your neighborhood, there's a benefit to you as well and and you know what you can access and do.
▶ 1:32:15Absolutely. I'm already working uh on something like that with one of my colleagues from Michigan. Uh we'd love to to run it by you, get your input on it uh as well. So, thank you so much for your testimony. I look forward to working with you. Thank you.
▶ 1:32:27Thank you. I now recognize Mr. Weed from Wisconsin for 5 minutes.
▶ 1:32:31Thank you, Mr. Chairman. Thank you to all of the witnesses for being here today. We appreciate the work each of you are doing to shape the future of America's digital infrastructure and the communities that support it. Across the country, we're seeing a rapid growth in data centers driven by the accelerating demand for AI.
▶ 1:32:48Increasingly, these facilities are choosing rural communities, creating new opportunities in skilled trades, construction, and facility operations, offering a pathway to stable middle class careers in regions that have too often been left behind. At the same time, this expansion brings real challenges from meeting the energy needs of these facilities to the increase in workforce demands. Small businesses are central to this story.
▶ 1:33:14They are the contractors, suppliers, and service providers who make these projects possible and who stand to benefit long after construction ends. As AI demand centers continue to grow, it is my hope that we can find solutions that balance the needs of tech entrepreneurs while also protecting the rights and the voices of, of course, our local communities. Mr. Crosby, we'll start with you.
▶ 1:33:36in in your testimony you said that data centers act as anchor tenants um that put downward pressure actually on electricity rates and that is one of the biggest concerns. We have a project in northeastern Wisconsin that was um you know the local the community um was very very involved. Uh that was one of the big concerns is electricity rates. Could you expand and walk us through um you know how rural taxpayers actually could see savings?
▶ 1:34:02Yes. in in in states where it is not regulated that they have to share everything with consumers. So there are states uh and and regions in the country that it is forced to be shared. So even if you wanted to foot your own bill, you are not allowed to foot your own bill. It is forced onto consumers. In those other states that that is not the case. Um you can uh one is the connection interconnect charges. That's paying to bring the power to you. That's what we pay for uh those those charges to to do that.
▶ 1:34:33The second is how do the rates come down? So keep that first cost off of bringing the transmission to you. Now how do the rates come down? Because we if we can utilize existing infrastructure, the grid runs at about 50% right now. And if we can use that infrastructure for the vast majority of the year in a state like Wisconsin, you might have 20 hours a year of peak power out of 8760 hours.
▶ 1:34:54That means we could be utilizing that capacity and then island ourselves during those times where the grid operator says it's a it's a tough it's a tough environment. Go ahead and come off the grid. We don't want consumers to we don't want there to be any anything to to hurt the grid. That's a grid stability. If you're using infrastructure that's already built and paid for, it will drive down costs for consumers. We have seen that. Southern company uh Chris Wmax company, they put out a report uh there about that. PGE put out a report.
▶ 1:35:23Marine Pope, we work very closely with utilities, EPRI, EEI. We are trying to get the regulatory environments to allow us to pay for what we want, pay for the power that we want to use and help us drive down these
▶ 1:35:37You also mentioned another thing that that I've heard a lot with this most recent one in our community is depletion of the aquifer. Um you you mentioned um that Compass mandates water-free cooling technology to protect agriculture water supplies. Can you explain what that looks like in
▶ 1:35:56Yeah, I grew up in the state of Texas. Water's always been a precious resource. Um we were one of the very early adopters of saying no water. a lot of evaporative cooling was used um in the space that got eliminated several years ago, but for a few as Kirk liked to say uh misfit toys and then some that are doing that are using evaporative cooling but creating water positive environments where they are investing in and replenishing aquifers more than what they use.
▶ 1:36:23I do not think it is a valid claim anymore to say with a blanket statement that data centers use water. I reject the premise of that.
▶ 1:36:31Go to Mr. Ael. Um I think you well you acknowledge that the industry hasn't communicated very well with local communities and I feel you know we don't want them blindsided and and um so from your point of view what is no question we need early engagement and engagement is very important in these types of things. Um what does early engagement look like to you? How do we ensure that rural residents they feel informed rather than blindsided?
▶ 1:37:01That's a fair question and there their concerns are extremely valid. We're not trivializing those. The only way to solve it is with immersion. There's three different different types of audiences that we need to address. There's no silver bullet answer that will make everybody happy. We need to convert the way that we view these things as something that is um just a consumer of utilities and we need to help them understand what AI means to them as a human being. How does it help them?
▶ 1:37:27As a small business, AI gives me the ability to compete against the Goliath of this world because it level sets the playing field. Plus, for those people that want to be in the game, it opens up better career opportunities because it lowers the barrier to entry to market for new jobs.
▶ 1:37:42Thank you, Mr. Chairman. I yield back.
▶ 1:37:45Thank you all. I now recognize Dr. Morrison for a closing statement.
▶ 1:37:50Thank you, Mr. Chairman, and congratulations on a very amiable hearing. Uh, I think this has been a really interesting and important conversation. I'm grateful to the witnesses for your presence. Um, you know, we've talked about the good, the bad, and the ugly in some cases parts of the data center boom. It's a very nuanced topic. Um, and there are so many ways that data centers play with existing issues such as tariffs, which are crushing our main streets and industries.
▶ 1:38:18We have recent evidence that supports what economists have been saying from the beginning of this chaotic tariff war that Americans pay them in taxes. 96% of tariffs have been uh paid for by Americans uh over this past year. Um the immigration crackdown choking our workforce and entrepreneurs and as someone from the Twin Cities literally terrorizing our communities. Um I intend to submit further questions for the record.
▶ 1:38:47I hope to keep the conversation going down the line. There's so much to discuss. Um, thanks so much again to the witnesses for your insights. And with that, I yield back. Thank you, Dr. Morrison. I recognize myself for a closing statement. I'm so proud to have data centers in my rural community just south of Dallas.
▶ 1:39:06There was a lot of concern at the very beginning about what what does this mean this new technology this new uh horizon of ours in technology and AI and everything that goes with it. I understand the fear of some of my colleagues on particularly the eastern seabboard which is stretched thin with energy uh power and water and lines and so many other things.
▶ 1:39:29I'm here to tell you that if you are interested in seeing what they really do, how they really contribute to our communities, doctor, come visit us in Red Oak and Midlotheian for a couple days. Stick around. These gentlemen would be happy to host you and so would I.
▶ 1:39:44As I look at the the city of Red Oak, which is growing by leaps and bounds because of industry coming there, a talented workforce, all of the people in that community are benefiting from these data centers coming to them from construction, from flipping burgers, from Walmart, from Brookers to homebuilders to everybody else in between. and a strong stable tax base to provide excellent schools, excellent public schools for our kids.
▶ 1:40:13They're not drawing on the water. They're adding to the power. They're adding security in a in a in a lot of rural communities that in many cases in Texas and elsewhere are those rural commun communities are looking for a reason to survive and many of them are struggling. This new technology gives them an opportunity to do so. They're doing so responsibly with the cooperation of state and local governments and they're an incredible benefit to the state of Texas and to Red Oak Median and Ellis County.
▶ 1:40:42So, I want to thank everybody for participating in this robust discussion today. It's been a fantastic hearing. I hope it generates more discussion going forward. Thank you all for being here. And um without objection, members have five legislative days to to submit additional materials and written questions for the witnesses to the chair which will be forwarded to the witnesses. I ask the witnesses to please respond promptly. There's no further business. Without objection, the committee is adjourned.