Data Centers in Eagle Mountain

How much water a data center uses depends on its age, size, location, and technologies used. Older data centers (15+ years ago) used more water for cooling. Newer designs, especially those built in the western US are significantly more efficient. The size of the data center also matters, and some data center buildings are built as campuses. Location has a factor not just based on water availability, but also due to the climate conditions. If the ambient air is sufficiently cool, it can be used for cooling instead of water. Finally, modern data centers use different technologies. Most will choose between advanced evaporative cooling or closed loop data centers. But even within these technologies there can be variety. For example, a closed loop data center may not use pure water, but a glycol coolant instead which is basically the same concept as coolant your car uses.

Using Eagle Mountain data centers as an example, water use is far less than most other industrial or commercial uses. An evaporative cooling data center building may only use around 20 acre-feet of water annually. That’s about the same as a grocery store. A closed loop water cooling system would use the same water equivalent as about 5 homes, plus it takes in the water once and can continuously use that same water with no water loss for many years, even for decades.

Data centers are useful to numerous companies beyond the demands of artificial intelligence. They are the backbone of any internet-based service that needs to store or transmit information. Banking, online shopping, video games, social media, and so forth all rely on data centers to keep their online services functioning. So, should the demand for artificial intelligence subside, there will still be plenty of use for data center facilities.

Eagle Mountain City has strategically used tax incentives as a recruitment tool. Eagle Mountain’s use of tax incentives is not specific to data centers, nor is the City’s use of tax incentives unique to our city. Businesses across the country, and even the world, will at times go through a process called site selection, when they find it advantageous to relocate or expand in an area different from where they already operate. That site selection process is both competitive and very deliberate. Different businesses need different things to be successful, whether it be certain capacities in infrastructure, certain demographics for their workforce, or certain price points for land, construction, etc. The unfortunate reality is that Eagle Mountain is often at a disadvantage for most site selection efforts because we don’t have a freeway, we don’t have access to rail, infrastructure hasn’t made it to all parts of the city yet, and there are few existing buildings that could be leased. For cities like us, using tax incentives can be a key to being competitive where we otherwise wouldn’t be. Not only does it help a project in Eagle Mountain be a more viable option, it helps reduce perceived risk, and businesses really don’t like risk.

Several years ago, Eagle Mountain City performed significant analysis to determine where there may be opportunities in economic development. We realized that, if done right, attracting data centers can help in several ways including increasing our ability to be competitive in site selection with other industries. We opted to use a tax incentive (which only reduces the amount of NEW tax collected, not giving any taxes from anyone else) as a means of attracting our first data center. From the beginning, Eagle Mountain City operated on a policy that incentives for any additional businesses would need to be noticeably less than the prior.

By reducing tax burdens on businesses, and ultimately seeing them locate in Eagle Mountain, we now see previously unoccupied land that was generating less than $100 in taxes annually, to now producing millions of dollars. Although we only retain a portion of that for the time being, we are receiving other revenues and benefits with significant value that is translating into meaningful positive impacts for residents.

Eagle Mountain City is not offering any tax incentives to additional data centers, and in fact we are working with our data center partners to either renegotiate some aspects of former agreements, or find other ways for them to bring more direct value sooner.

Unlike water, power is not a finite resource. With investment, more can be created. It’s also not something that’s taken away from someone to be given to someone else. Power from the grid is only provided to a new user if the capacity exists. Additionally, any necessary infrastructure upgrades are paid by those who need use of the upgrades. Although costs for electricity have gone up nationwide, a majority of that increase is related to the closure of power plants nationwide and the increased cost of insurance for these utilities which have been linked on occasion to wildfires.

In Eagle Mountain, data centers for the most part are pulling power from the Rocky Mountain Power grid. To receive the available power, the data centers have spent hundreds of millions of dollars towards grid upgrades, the construction of new substations, and the establishment of new transmission lines for redundancy. Rather than weaken our grid, data centers have made our grid more robust than ever.

If a data center cannot get the power it needs from the grid, Eagle Mountain does permit (within certain restrictions) for on-site power generation, meaning they can build their own power plant on their property. Eagle Mountain only allows for low-water-use and clean power generation. These generation facilities are also heavily regulated by the State and Federal governments. The on-site power generation adds no financial burden to residents in the city because it operates outside of the normal grid. You pay nothing into it.

Data centers do vent heat into the ambient air around them. However, the heat they vent is not substantially hot. Most servers within a data center are designed to operate between 75 – 95 degrees Fahrenheit. Extensive low-water-use cooling systems must remove the heat before the servers get any hotter. Therefore, the heat leaving the data centers is no more than that 95 degrees maximum. For comparison, the temperature of asphalt (which is what most of our roads are made of), can run more than 40 degrees higher than the ambient air temperature. Urban heat island effect is a much stronger contributor to the increase in ambient temperatures in a given area.

Anyone who has owned a business of any size can tell you, selecting and opening a new location is not a fun or easy process. Choosing the right location can mean the difference between decades of profound success, or a rapid demise plunging a business into considerable debt. As the business gets larger, the challenge of selecting the right location grows. Whether it’s a large office headquarters or a major manufacturing operation, there are numerous factors to consider that can have big impacts on costs and timelines. However, larger businesses benefit from the knowledge that the location they choose can also benefit from them being there in terms of the jobs they are going to provide, the tax revenues they’ll pay, and the boosting of other businesses because of their presence. This is all why the process of “site selection” becomes quite competitive.

Many businesses that are desirable for a community to attract have the opportunity or capability to build across the United States. Site selection often starts at the national level, with states competing with states, helping businesses see that their population will have the best employees, their permitting and regulatory environment is the best to work within, and more. Cities participate as well, demonstrating infrastructure readiness, workforce capabilities, utility capacity, and more. Businesses ultimately begin to narrow down to a handful of candidate locations, but almost never is the decision an easy one to make. Every location has its strengths and weaknesses. And importantly, every location is different in what it stands to gain from the business locating in their area.

Although a big business could certainly build a new facility without the tax breaks, those tax breaks help push a project over the edge in selecting a particular location. However, the determination of what those tax breaks entail is a lengthy and thorough process. Ultimately, each party of the deal must stand to gain from what should be a long and prosperous relationship. In Eagle Mountain’s case, we use the Eagle Mountain Redevelopment Agency to consider each project. We determine what primary, secondary, and tertiary benefits we stand to gain for our community, and then only provide the minimum tax relief necessary to land the project.

Some important clarifications: First, Eagle Mountain does not provide tax breaks to all large projects or large companies. We use this tool strategically as needed. Additionally, it’s good to keep in mind that businesses pay more in taxes than home owners do, and not just because their buildings are more valuable. In Utah, home owners only pay taxes on 55% of the value of their home. Businesses pay taxes on 100% of the value of their property. Additionally, they pay a personal property tax on the equipment inside their facilities. There are several other revenues that come from businesses that do not come from homes. Commercial and Industrial businesses are critical in a community to broaden the tax base, shift the tax burden off of residential, and ensure our level of service can be maintained going forward. The revenues to make this possible do not just come from property tax; a broader evaluation happens to ensure the city stands to make great gains from any project.

It depends on the data center project. Most data centers still operate with power coming from the grid. In that scenario, yes, data centers are affected by power outages like everyone else. They are not the cause of power outages, given that utilities cannot sell more capacity than they actually have. If a data center goes offline, they generally have stages of back-ups. They will have internal battery backups, for example, that will keep them operational for long enough to transfer the data load from their facility to other facilities across the country temporarily. If the outage is longer, data centers have generator back-ups that will kick on if the data center needs to remain operational. Those generators are usually diesel generators and must receive air quality permits.

The water coming out of the data centers is quite clean, and is currently being used to help irrigate Cory Wride Memorial park, and supply irrigation water to nearby residential subdivisions. Testing has shown that the water can have a slightly higher salinity, but when mixed with culinary water, it is perfectly fine to use for irrigation. Eagle Mountain has been able to manage any other minor water quality concerns from data centers. Closed loop data centers that use glycol or other chemicals which are replaced over a period of several years will have those chemicals hauled away by third-party licensed waste management companies for proper disposal.

State and Federal agencies strictly regulate emissions. There are also limits to the total emissions any particular property can produce through a carbon credit system. The State regulates credits and total emissions; all new users would need to consult with the Utah Division of Air Quality regarding the ability to introduce new emissions sources to the local air shed.

Data center projects in Eagle Mountain are currently either constructing or planning for on-site power generation. The City has mandated within our authority that these data centers use the cleanest and lowest-water-use generation types available including solar, geothermal, specific forms of natural gas, and advanced nuclear. Currently, natural gas is the best option available, so two facilities are currently planned which will have been designed to keep emissions extremely low, and use very little water.

It’s expected that Eagle Mountain could be home to approximately 3,500 acres of data center development. For some reference, that would make up about 10% of our current land mass, but following planned annexations of additional property, ultimately only take up approximately 3-4% of our land mass. The number and size of buildings in each data center campus will vary. Each of the projects approved were thoroughly analyzed and found to be appropriate use of the properties, and will provide significant benefits to the community.

Although earlier on this page it’s mentioned that Eagle Mountain pursued data centers originally, it’s important to note that the City is no longer recruiting data centers, nor providing any incentives. That does not mean new projects could not come. If a new project comes beyond what is already planned, it will be reviewed the same as any other commercial or industrial project proposal.

Data centers are certainly not the entirety of Eagle Mountain’s economic strategy. They have served as a good strategy foundation, but other types of businesses or employers are being sought after to diversify the local economy and introduce other needed benefits that this sort of development can provide.

The size of a data center can vary quite considerably. They can be as small as an air conditioning unit or as large as a million square feet. However, they are typically sized based on available property and certain efficiencies related to cooling or other considerations. In Eagle Mountain, the typical size data center building we’ve seen is around 250,000 – 300,000 square feet. It’s also important to note that it’s typical to see a data center campus leave several swaths of their property undeveloped. So, although a project may plan to develop 1,000 acres, typically you won’t actually see 1,000 acres of buildings.

You can reach out to our Economic Development department by emailing either aivory@eaglemountain.gov or eberrett@eaglemountain.gov. If our staff cannot answer your questions, we will seek out answers from our data center partners or other experts who can assist.

Currently, this is still unknown. Eagle Mountain has created a regulatory framework for advanced nuclear projects to be permitted for development in Eagle Mountain, but there are several other factors that impact whether a nuclear power generation facility is desirable. Ultimately, Eagle Mountain City will not be the cause of the announcement of a nuclear power generation project. The major contributors to that possibility will come down to those who need the power, those who can build the facility, and the various State and Federal regulatory agencies which must sign off on not only the site, but the technology to be used and all aspects of the use of that technology.

Eagle Mountain City has only tax incentive toolsets as necessary to ensure our community is competitive enough to be selected for a project. Over time and from project to project, these toolsets have become increasingly unnecessary and we have negotiated agreements accordingly. At this point in time, data centers are capable of developing in Eagle Mountain without any incentives and therefore Eagle Mountain may see additional projects develop, but without any assistance in terms of tax abatement.

Loud & persistent noises can be a real concern for quality of life and it’s certainly taken into consideration for any new development coming into Eagle Mountain. Data centers are questioned about noise prior to approval and we have been happy to have had great partners who have committed to very limited noise impacts. Operational data centers in Eagle Mountain have no noise escaping the building. Any noise inside the buildings register approximately at 75-80 decibels but the construction of the facility does not allow those noises to escape the building.

Temporary noises may be heard from construction activity, temporary generators for onsite construction electricity, and so forth. Additionally, we do expect some noise in the future from onsite permanent power generation facilities but each facility must provide a noise profile and demonstrate compliance with city ordinances that are designed to ensure noises aren’t heard in residential neighborhoods.

Eagle Mountain City takes water conservation very seriously and does not entertain data center projects that use excessive amounts of water for cooling. Two technologies exist in Eagle Mountain, advanced Evaporative Cooling, and Closed-Loop Cooling. Each of these methods use very little water compared to other industrial uses and even compared to household use. Closed-Loop cooling, for example, uses the same amount of water in one 300,000 sq/ft building as 5 homes. Evaporative Cooling also provides opportunity for Eagle Mountain to capture used water and repurpose it. Currently, water that’s been cycled at the Meta data center is eventually either pushed out to irrigate Cory Wride Memorial Park or feeds the irrigation systems of nearby residential neighborhoods.