Derek Schmidt

U.S. Rep. Derek Schmidt believes data center development decisions should be made at the local level.

Schmidt advises communities that data center developers should not require tax abatements.

Data centers should source their power from new or supplemental sources to avoid raising local utility costs.

Modern data centers can be designed as closed systems that do not consume large amounts of water.

As Topeka leaders and communities across Kansas consider data center developments, a member of Congress has advice for local leaders.

U.S. Rep. Derek Schmidt, R-Kansas, said in a June 2 telephone townhall that he is hearing from people all over the 2nd Congressional District about data centers. A caller from Emporia asked Schmidt about his perspective on balancing economic benefit vs. local costs.

"Not surprisingly, I hear from a lot of people who are unhappy with the idea of data center development," Schmidt said. "They're worried about what it might mean in their community. They're worried about its effect on farmland. They're worried about water usage. They're worried about energy usage and potentially the effect on their utility bills."

But not everyone is opposed to data centers.

"I also do hear from some folks in some communities in our district who like them, who want them," Schmidt said.

He pointed to Pittsburg as an example.

"My big picture perspective on it is I think it ought to be largely a locally influenced decision," he said. "If a community wants this as part of its economic development strategy, that's for them to decide. I think that's good.

"If a community doesn't want it as part of their local strategy for whatever reason, that's fine. I think they ought to be able to decide that, just like you would with any other sort of large industrial scale development in their community."

Schmidt is on the House Small Business Committee, and a subcommittee had a hearing on Jan. 21 about data center investments in rural communities. While telling them, "I'm a state and local control person philosophically and I believe it in my bones," Schmidt used his time to ask witnesses about their views on federalizing some standards vs. leaving decisions to locals.

Speaking on his telephone townhall, Schmidt said a data center developer shared some pieces of advice that the congressman is now sharing with Kansas communities considering such developments.

"One is you should never have to abate taxes on it. These are large companies that are investing in storage for huge amounts of data as we move into the artificial intelligence age. They don't need a tax abatement, so your community ought to be able to get the tax benefit directly."

"His second piece of advice was they should be able to identify where the power is coming from — the electricity power the center — and it should be from a new or supplemental source. It shouldn't just be where they're in competition with all the existing ratepayers and it might drive up costs."

"Number three, he said they ought to be designed in a way — the newer technologies are closed systems — that don't consume large amounts of water. They consume water, but not large amounts of water."

"I'm no expert in the space," Schmidt said. "I'm not saying those are three magic points, but boy, that sure made a lot of sense to me, and so I've shared that information with folks who have asked about it. As I learn more, I'd be glad to share that as well."