Georgia officials divided over costs versus benefits of data centers

A new data center from Open AI could cut county property tax bills significantly, an Effingham County official said, but some residents said they didn't feel as if the tax breaks would outweigh any detrimental effects of the facility.

Dubbed Project Camilla, the 1,400-acre, 3.2-gigawatt data center will be completed in phases beginning in 2028 and 2032, OpenAI said on its website.

The Effingham County Industrial Development Authority and OpenAI have agreed to a payment-in-lieu-of-taxes deal, according to a presentation by Effingham County Manager Tim Callanan in a Saturday-called meeting of the Effingham County Commission. The agreement will generate $2.5 million to Effingham County and $3.5 million to Effingham County Schools in 2027. The payments increase each year, and by 2032, OpenAI will pay $27 million to the county and $39 million to the schools.

A "bridge" payment that will result in a six million dollar reduction in property taxes is up for a vote by the County Commission on Tuesday, Callanan said.

"So you could be looking at a $350,000 taxable valued house, about $1,300 worth of relief in this year's tax bill," Callanan said.

The Georgia Public Service Commission passed rules earlier this year that bar the technology company from passing electricity costs on to consumers, according to Callanan. As for concerns about water use, OpenAI plans to use a closed-loop system that recirculates treated surface water instead of using underground water sources, he said in the presentation.

Residents questioned the project in the meeting, which lasted more than four hours.

"Everybody loves a tax break, but what we hate is coming back later and being told, you know what, we've got to charge you a bunch of extra money because there was something that should have been paid," said Kenneth Lak, a local lawyer. "What are you going to do to make sure that you don't come back asking us to pay a bigger bill down the road?"

U.S. Sen. Raphael Warnock, D-Ga., said he felt local residents were left out of the decision. He called for a moratorium on data centers statewide during a Friday visit to Effingham County.

“Data center developers across the country are not operating in partnership with communities, and that’s why everyday citizens on both sides of the aisle are rightly and equally concerned about this,” Warnock said in a statement. “The lack of transparency here in Effingham County and in counties across our state and across the country is unacceptable, and that’s why today I’m calling for a moratorium on data centers.”

Warnock is not running for reelection in November, but other Georgia candidates have included data centers in their platforms.

Republican U.S. Rep. Mike Collins told C-SPAN that data centers are a local decision.

"Do we need data centers? We sure do. We're in a race of AI against China," Collins said. "But if it's going to go in and hurt local infrastructure, then those people don't deserve to have it."

Collins' opponent, Democratic U.S. Sen. Jon Ossoff, has not weighed in on data centers on the campaign trail. The first-term congressman sent a letter in April to the Federal Energy Regulatory Commission requesting an investigation into how data centers affect consumers' electric bills, according to reports.

Keisha Lance Bottoms is calling for a pause on data center development.

"My concern is that we are moving too fast on this and it is going to be at the expense of our communities," said Keisha Lance Bottoms, Georgia's Democratic candidate for governor, at a Sept. 22 campaign rally in Ringgold. "I can tell you as I am moving around this state, there are some areas that are saying we want the economic benefit from these data centers. There are others say it is a complete disaster on our water system and on our environment."

Republican gubernatorial candidate Rick Jackson said local voters must have the final say.

"Any data center in Georgia should provide a clear local benefit, pay its own way, and meet strong environmental standards," Jackson said in a social media post. "Local residents know their communities, infrastructure, and long-term needs better than anyone."

Georgia has 276 data centers, according to Data Center Map, which tracks their development. The Georgia Department of Community Affairs lists 16 new data center projects, including the Effingham County project, that have been announced since Jan. 1.