Data Centers: Nevada’s New Political Hot Button
The foundation for the Internet, smartphones, computers, AI, and streaming services that Nevadans use every day is becoming a political pivot point. Will it affect elections?
Aug 20, 2026
The public has been whipped into believing these facilities are tax-taking, water‑guzzling, grid‑breaking monsters.
Politicians are scrambling because voters are spooked, and they see an opportunity to get votes.
For years, data centers were treated as boring infrastructure. Nobody cared. Nobody protested. Nobody wrote op‑eds about them.
Then AI panic hit. Concerns about tax abatements, water usage, and electricity spread. Tech billionaires have become suspect. Now people don’t want data centers in their neighborhoods, or anywhere.
The issue has landed in the middle of the 2026 governor’s race, where pundits like Hugh Jackson are exhorting Aaron Ford to use data centers as a campaign issue against Governor Joe Lombardo.
Link: Lombardo’s big sloppy crush on data centers finally attracts Ford’s attention.
Candidate for Governor Aaron Ford and Reno Mayoral candidate Kate Marshal (seen here with candidate for Attorney General, Nicole Cannizzario) are two politicians in the upcoming election who will likely use data centers as an issue.
Issues with Data Centers
The issues with data centers are many, complex, and often misunderstood. The top three issues appear to be tax incentives, the impact on the electricity grid, and water usage. The types of data centers and their locations affect their impact, but here’s a look at the issue.
Tax Incentives for Data Centers
Nevada’s tax incentives for data centers were created in 2015, when “the cloud” still sounded like a novelty and AI wasn’t yet a driving issue. Lawmakers embraced the idea that targeted abatements in sales and property taxes would lure high‑tech investment and diversify the state’s economy.
According to Nevada’s Tax Expenditure Reports, the state granted $97 million in data‑center tax breaks in FY 2021–22. Two years later, the cost had more than doubled to nearly $240 million. What was once a modest program has become a runaway subsidy machine, according to some sources.
The tax issue is complicated and requires more study; however, candidate for Governor Aaron Ford is already jumping on the tax incentive issue.
Link: Ford announces intention to pause tax breaks for data centers if elected governor
“When I’m Governor, Joe Lombardo’s gravy train for data centers is coming to an end. I’m going to implement some of the strictest rules in America: data centers will need to bring their own water or coolant, pay for their own electricity so ratepayers’ bills don’t go up, and actually deliver the sustainable high-paying jobs and tax revenue they’ve promised.”
Many data centers were built, mostly at TRIC in Storey County, but some were built in Reno. Whether the tax incentives were a net win is a topic for another article.
Electricity Grid Impact
Electricity demand from data centers is real, but it’s planned, modeled, and regulated by the PUC; however, the public has become alarmed over the situation. Here’s how it works:
NV Energy requires load forecasting years ahead.
The Public Utilities Commission monitors and approves resource plans.
Large customers pay for grid upgrades through regulated tariffs.
Data centers often have their own electric generating plants.
Despite regulation, people remain concerned about potentially rising electricity bills, and customers worry they are secretly subsidizing server farms.
Data Centers and Water Usage
The public has expressed concern about data‑center water use, and this seems to be a major issue that is getting people worked up.
Modern data centers use closed‑loop cooling, filling the system and reusing the same water for years.
Nevada’s planned data centers would use an estimated ~9,650 acre‑feet of water per year for cooling.
Even including indirect water used by power plants, the total is estimated at ~22,000 acre‑feet/year.
The real water hog in Nevada is alfalfa, a crop that makes data center water use look like a rounding error.
Alfalfa requires 4–6 acre‑feet of water per acre per year.
Nevada grows hundreds of thousands of acres of it on thousands of farms.
A single alfalfa farm can use more water than all Nevada data centers combined.
Most alfalfa is exported to California, Japan, South Korea, and China.
Nationwide, data centers use less than 1% of the available water.
Nevada is exporting its water as hay, yet somehow the public panic is about data centers using up all of the water.
Reno Approved the Data Centers. Now It’s Trying to Regulate Them.
In this article, I show how Reno hurried to approve data centers while research on their impact was ongoing, and then Reno made a fuss about the need for regulation.
The Data Center Issue in the Governor’s Race
Aaron Ford appears to be ready to use data centers as a point of contention. He says that Lombardo has aligned with Big Tech and data‑center tax incentives.
Ford has repeatedly avoided taking a clear stance on whether Nevada should continue to give massive tax breaks to data centers, until recently.
Ford helped create the data‑center tax breaks in 2015 and has long supported subsidies for private industry.
On August 14, Ford issued a press release attacking Lombardo over data centers.
Link: Ford Slams Lombardo-appointed PUCN For Keeping Nevadans In The Dark On Rising Energy Costs
“Nevadans are being kept in the dark about how Joe Lombardo’s taxpayer-funded data centers could jack up their energy bills – and I will not stand for it… Working Nevadans need transparency and accountability, and I’m going to keep fighting until we get it.”
“Joe Lombardo’s campaign is being bankrolled by the big utility and data center companies that are sending our bills soaring. Unlike him, I’ll be a Governor who fights for working Nevadans – not the big companies raising our costs. I will not allow data centers to raise Nevadans’ energy bills one cent.”
Devon Reese, Data Centers, the Moratorium and the Regional Planning Situation
In this article, I show how the Reno data center moratorium was a political stunt.
Data Centers are an Issue for the Reno Mayor
Kathleen Taylor is linked to data centers. She is the Reno City Council member who voted against the data‑center moratorium. This has led to pushback from environmental groups, pro‑moratorium voters, and political rivals who frame her stance as too favorable to developers, but it’s more complicated than that.
Kate Marshall has taken an anti–data‑center position, saying that large data centers should not be built inside Reno city limits and that the City must adopt strict regulations before considering any projects. Her stance aligns with environmental advocates and residents who worry about water use, energy strain, and noise.
At a recent event, Vblogger Allison Hartman, Commissioner Alexis Hill, mayoral candidate Kate Marshall and Sierra Club Director Olivia Tanager discussed data centers.
Ford’s Move Could Define the Governor’s Race
Lombardo’s embrace of the AI industry, combined with shifting public sentiment, has turned the data‑center debate into a test of political instinct.
What happens next in Nevada’s governor’s race may hinge on how Aaron Ford continues to respond to raise the data center issue.
Ford may finally see the opening in front of him as a chance to draw a sharp contrast on an issue where Lombardo is unusually exposed, and where voters are attentive.
If Ford chooses to continue to press the issue, he can frame himself as the candidate willing to rethink Nevada’s economic‑development habits and challenge a governor who appears too aligned with tech‑industry interests.
If he hesitates, he risks letting Lombardo define the narrative and forfeiting one of the few issues in which money matters less than the message.
But the whole thing might just be a political play using a current hot-button issue.
Link: Former Warehouse, Gym Goes From Planned Burner Party Space to Proposed Data Center
I raised the issue of the proposed 265 Keystone Data Center n Reno, and OTR published an article in January of 2025. It’s in my neighborhood and wasn’t an intended use for the property, but the City granted a CUP anyway despite ~30 people commenting against it.
My Take on Data Centers
If you use Internet-connected devices, you use data centers, and they are not going away. More of them will get built; it's only a matter of what kind and where.
Governments need to draft reasonable guidelines and regulations for data centers.
AI can provide benefits. It is not going away either, but you don’t want a massive AI data center near you. The impacts can wreak havoc on your lifestyle.
Data centers belong out at places like TRIC. You don’t want one in your neighborhood. They are noisy and intrusive.
Data centers have less impact on water and electricity than we have been led to believe, and controls are in place to monitor and regulate usage.
The extent to which data center tax incentives are trickling down to residents is unclear and warrants investigation.
The Reno moratorium was a political stunt, enacted after the Reno data centers were approved, and it did nothing to stop them.
The current question is whether people will ease their stance on data centers or whether data centers will become a defining campaign issue for Reno, Washoe, and Nevada. What do you think?
Do you have a story to tell? Write to me at: mike@mikesrenoreport.com
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