Bernalillo County leaders pass regulations for artificial intelligence data centers

In the midst of an international race to build artificial intelligence infrastructure, the Bernalillo County Commission passed regulations for data centers that seek public funds or tax breaks.

The resolution, which passed on a 4-1 vote Tuesday night, set out guardrails for data centers, requiring water use offsets, renewable energy and labor negotiations to ensure local high-paying jobs.

“We see these things popping up all over the state and all over the country and I just think it's important that we are proactive rather than reactive,” the resolution’s sponsor, Commissioner Eric Olivas, said Wednesday.

Though companies could sidestep the resolution by building independently, it would close the door to public funds or tax breaks — like those ironed out in southern New Mexico.

In September, Doña Ana County commissioners issued an unprecedented $165 billion industrial revenue bond to the controversial Project Jupiter data center in Santa Teresa.

This decision spurred public outcry, especially among ranchers and farmers who fear the data centers will suck the already arid landscape dry and destroy their livelihoods.

Some Bernalillo County residents voiced similar concerns.

Environmental justice activist Sofia Martinez supported the resolution but feared that it did not go far enough to protect New Mexico’s water, a scarce resource in the state.

However, Martinez said that while the state and federal government fail to act, she welcomed the commissioners' first pass at regulating the industry.

“I think we need regulation. I commend you, Commissioner Olivas, in moving some regulation forward, as there is none at the federal or state level,” Martinez said.

Alternatively, a minority of residents and commissioners said the resolution would cut off the county from an industry that will only grow more prominent.

Commissioner Walt Benson, who voted against the bill, said he feared the resolution would send the message that the county was “closed for business” and discourage economic development.

Olivas countered, saying that the resolution provided reliability for businesses scouting the area by establishing clear expectations. 

The resolution also caught the eye of Gov. Michelle Lujan Grisham, who called Olivas to Santa Fe to meet about the proposal. This prompted Olivas to delay a vote on the resolution in late January pending comments from the governor.

According to Olivas, the Governor’s Office felt that the original resolution undermined the Energy Transition Act. 

That act mandates that utility companies transition to 50% renewable energy by the decade’s end and 80% by 2040.

On the governor's advice, Olivas amended the resolution, allowing data centers to tap into public energy grids so long as the site goes fully renewable within two years.

While relaxing this requirement, Olivas tightened another.

In the resolution's final form, Olivas called for companies to offset all water usage and mandated water reuse. To offset water, the company must contribute to water efficiency projects or buy and sell water rights to the county. 

Though the resolution passed, it's unclear if any company will ever be interested in Bernalillo County as a site for a data center.

“We may not be an ideal site for these anyway, but we know the technology is changing fast so we could be in the future,” Olivas said.

Gillian Barkhurst is the local government reporter for the Journal. She can be reached at gbarkhurst@abqjournal.com.