This is worth a longer conversation. In context I just do not think this is the risk you’re suggesting.

I don’t think this is the correct reading of that section, fwiw. The focus on the baseline is off. It downplays or misses entirely that the raw statistics don't make a claim alone. Showing "pattern of disparate treatment" requires **intent** as evidenced by administration statements, EOs, etc.

Dishing with Dave this week! What should we discuss?

We’re in an early and narrow window to set the terms before these incentive structures calcify. The paper lays out a framework for how states can do this, and why it’s in data centers’ long-term interest, too.

State tax policy is a lever, but deeper problems (transmission planning and permitting, cost allocation, interconnection queues,) persist at the federal level and in RTOs. Durable reform requires federal and regional action (DO PERMITTING REFORM).

What would a good deal look like? Tax incentives that are conditional on grid citizenship: co-locating clean gen, committing to demand flex, connecting where the grid needs load, paying cost-causation-based interconnection costs. Good for the grid=eligible for the tax incentives.

Data centers still generate economic (& national security) value, so there’s a deal to be struck that’s better for everyone than the status quo. States don’t have to choose between attracting investment and protecting ratepayers and the environment while improving the grid.

But that bargain rested on an assumption that data centers were mostly good for local economies. That’s no longer inherently true. AI data centers now consume so much power that they risk driving up electricity prices for everyone else and public pushback is growing rapidly.

The classic logic for data center tax abatements makes sense insofar as communities can attract billions in capital investment, and collect more revenue than they would have otherwise. Loudoun County, VA is the canonical example.

New paper out today. States are handing out tax abatements to data centers, and while that once made sense, it doesn’t anymore—at least not without conditions. Here’s a thread on what a better deal could look like. 🧵