Empowering Rural America Through Investment in Innovation

AI in Education and WorkforceHouse Small Business Subcommittee on Rural Development, Energy, and Supply Chains · January 21, 2026 · 119th Congress
The House Small Business Subcommittee on Rural Development, Energy, and Supply Chains held this hearing to examine how the rapid expansion of AI-driven data centers into rural communities affects small businesses, workforce development, energy costs, and water resources. Begins at ▶ 0:22:37
Transcript
Highlights

Title

Rural data centers: economic promise, energy and water concerns

Purpose

The House Small Business Subcommittee on Rural Development, Energy, and Supply Chains held this hearing to examine how the rapid expansion of AI-driven data centers into rural communities affects small businesses, workforce development, energy costs, and water resources. Witnesses from the data center industry and the Brookings Institution testified on economic benefits, workforce partnerships, grid impacts, and the need for community engagement and transparency. Begins at▶ 0:22:37

Who spoke

• Chairman Roger Williams (R-TX)▶ 0:21:42: Led the prayer and pledge▶ 0:22:07 and later delivered a full committee opening statement highlighting CTE bills HR1641 and HR1642▶ 0:30:51, returning at the end to press Crosby on workforce partnerships and community engagement with Compass Data Centers▶ 1:12:26.

• Subcommittee Chair (Rep. Elie/Chair, presiding)▶ 0:22:37: Opened the hearing on "Empowering Rural America Through Investment and Innovation," citing data centers in Ellis County, Texas▶ 0:23:05, the "seven jobs supported for every direct job" multiplier▶ 0:23:32, and the Boots to Business veteran entrepreneurship program made permanent in the FY25 NDAA▶ 0:24:33; later questioned Crosby on Texas's regulatory advantages▶ 0:51:24 and Offel on veteran workforce fit▶ 0:54:47.

• Ranking Member Morrison▶ 0:25:42: Outlined risks of the data center boom — rising residential electric bills▶ 0:26:42, strain on drinkable water supplies▶ 0:26:42, rising computer/smartphone prices from parts diversion▶ 0:27:05, and pollution/carbon emissions▶ 0:27:05; criticized HR1 for slashing IRA tax credits and diversion of broadband funds to Starlink▶ 0:28:25; later questioned Dr. Turner Lee on affordability and EPA rollbacks on air pollution health benefits▶ 0:58:03.

• Mr. Chris Crosby, CEO, Compass Data Centers▶ 0:35:51: Described Compass's Red Oak, Texas campus creating ~1,500 construction jobs and 400 permanent jobs▶ 0:37:16, a Schneider Electric manufacturing partnership adding 350 jobs▶ 0:37:44, and sales-tax permit growth rising from 12% to 43% annually since construction began▶ 0:37:44; said data centers pay more so residential rates go down▶ 0:38:25, described water-free cooling since 2012▶ 0:40:10, and argued grid curtailment authority could have prevented deaths during Winter Storm Uri▶ 1:04:01.

• Mr. Kirk Offel, CEO, Overwatch Mission Critical▶ 0:40:58: Acknowledged the industry hasn't communicated well with communities▶ 0:40:58; said small businesses drive over 75% of AI infrastructure build-out▶ 0:41:56 and cited $100B in digital infrastructure investment yielding 500,000 jobs and $140B GDP boost▶ 0:43:24; noted the U.S. has 5,400 data centers with $5 trillion in construction expected over five years▶ 0:44:23; described a new apprenticeship program aiming to certify 1,200 workers per year▶ 1:15:52.

• Dr. Nicol Turner Lee, Brookings Institution▶ 0:46:10: Called for a national framework covering resources, security, permitting, and community benefits▶ 0:47:05; cited a December White House order tying broadband funding eligibility to non-opposition of AI deployments▶ 0:48:17; noted hyperscale data centers typically use up to about 100 megawatts▶ 0:59:24; recommended community benefit agreements, citing a $20 million agreement in Lancaster, Pennsylvania▶ 1:11:41.

• Rep. Brad Finstad (R-MN)▶ 1:01:32: Raised southern Minnesota constituents' concerns about energy/water strain and utility bill increases▶ 1:02:01; asked Crosby how Compass prevents energy cost increases for communities▶ 1:03:15 and Offel about improving public understanding of the industry▶ 1:05:40.

• Rep. Maggie Goodlander (D-NH)▶ 1:07:11: Noted New Hampshire has some of the highest energy costs in the country▶ 1:08:06; asked Dr. Turner Lee how to prevent costs shifting onto ratepayers▶ 1:08:48 and about water security given past corporate water pollution in New Hampshire towns▶ 1:10:13.

• Rep. Johnny Olszewski (D-MD)▶ 1:17:31: Described opposition to the proposed 67-mile Maryland Piedmont Reliability Project transmission line, projected to cost Maryland ratepayers $424 while primarily benefiting Northern Virginia data centers▶ 1:18:53; asked witnesses whether it's fair for Maryland communities to bear costs without benefits▶ 1:20:03.

• Rep. Derek Schmidt (R-KS)▶ 1:22:44: Asked witnesses to address the right balance between federal and local control, drawing on the railroad-development analogy raised in written testimony▶ 1:23:33.

• Rep. Hillary Scholten (D-MI)▶ 1:28:23: Discussed the bipartisan Water Resources Development Act (WRDA) and its importance to rural communities▶ 1:28:53; described her Honoring Vocational Education Act and asked about the role of CTE in filling data center jobs▶ 1:29:38; raised a canceled overcapacity planning meeting for a Kent County data center▶ 1:30:49.

• Rep. Tom Tiffany/Van Orden (R-WI, "Mr. Weed" per transcript)▶ 1:32:31: Asked Crosby how rural Wisconsin ratepayers could see savings from data center anchor-tenant status▶ 1:33:36 and about aquifer depletion concerns tied to a local project▶ 1:35:37; asked Offel what early community engagement should look like▶ 1:36:35.

Key moments

• Crosby said Compass's Red Oak, Texas investment lifted annual growth in new sales-tax business permits from 12% to 43% since 2021▶ 0:37:44.

• Crosby argued regulatory limits keep data centers from serving as grid resources, asserting that if data centers had been allowed to operate during Winter Storm Uri, "12 people would not have died"▶ 1:04:01.

• Offel said the AI infrastructure buildout is over 75% driven by small businesses and that every $100 billion invested yields 500,000 jobs, $40 billion in labor income, and $140 billion in GDP▶ 0:41:56▶ 0:43:24.

• Dr. Turner Lee said the White House issued an order in December making states ineligible for broadband deployment funds if they impose moratoriums or lawsuits against AI/data center projects▶ 0:48:17.

• Rep. Olszewski detailed the Maryland Piedmont Reliability Project — a 67-mile transmission line facing eminent domain concerns and a $424 ratepayer cost — questioning whether it fairly transfers power from Pennsylvania to Virginia data centers at Maryland residents' expense▶ 1:18:25▶ 1:19:20.

• Offel stated that roughly 90% of electricity is lost transmitting at lower voltages (69–130 kV) versus high-voltage lines, framing transmission upgrades as a bipartisan efficiency opportunity▶ 1:21:28▶ 1:21:40.

• Crosby rejected the premise that data centers broadly consume large amounts of water, saying Compass has used water-free cooling since 2012 and that "a few misfit toys" still use evaporative cooling▶ 1:35:56▶ 1:36:23.

• Dr. Turner Lee challenged the railroad analogy used by industry witnesses, arguing data centers may be incentivized to bring "more profit to companies versus people" and calling for more industrial policy▶ 1:27:31.

• Offel described launching a dedicated data center apprenticeship program targeting certification of 1,200 people per year, partnering with a veteran-owned small business in Dallas▶ 1:15:52.

• Dr. Turner Lee cited a Lancaster, Pennsylvania $20 million community benefits agreement covering air quality, water, education, and jobs as a model for future data center negotiations▶ 1:11:41.

Metadata

CommitteeHouse Small Business Subcommittee on Rural Development, Energy, and Supply Chains
Chamber / CongressHouse · 119th Congress
DateJanuary 21, 2026
TypeHearing
Witnesses
Mr. Chris Crosby — Chief Executive Officer, Compass Datacenters
Dr. Nicol Turner Lee — Senior Fellow, Governance Studies and Director, Center for Technology Innovation, Brookings Institution
Mr. Kirk Offel — Founder and Chief Executive Officer, Overwatch Mission Critical
Videoyoutube
Transcript228 caption blocks · 14,521 words · 1:41:08 runtime
EventCongress.gov 118870