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Energy and Data Centers

Exploring TMRPA's Role in the Energy Sector

Welcome to TMRPA’s one-stop-shop for information about our research regarding energy and data centers. Data centers are increasingly being drawn to the Reno–Sparks region due to a combination of geographic, infrastructure, and economic advantages. In response, TMRPA is reviewing our role in the energy sector including energy generation and transmission infrastructure and related policies in the Regional Plan. We want to stay vigilant and build a collective understanding of the impacts and opportunities data centers may bring to our region.

Below you can read about our research findings around four key topic areas related data centers and other high-energy users.  We also include links to valuable resources and a breakdown of the organizations that participate in this sector and what they do. Finally, we have provided all previous TMRPA reports, materials, presentations, and engagement thus far on data centers.

TMRPA RESEARCH AREAS

For Data Centers and High-Energy Users

Battery icon for energy demand.

ENERGY

Energy demand for data centers refers to the total amount of electrical energy they consume, which is driven primarily by IT equipment and cooling systems. This demand is influenced by factors like server density, uptime, and cooling efficiencies. Power use efficiency (PUE) is a measurement of how much of the energy delivered is used for computer equipment only, not cooling. Energy demand for data centers is growing rapidly, partly due to AI and digital infrastructure expansion.

  • Data centers require massive amounts of energy to power computer servers and equipment and to keep these systems cooled for performance and long-term sustainability.
  • According to NV Energy’s recent Integrated Resource Plan (2024), Northern Nevada’s current peak electricity demand is approximately 2,100 MW, but data center requests could drive the need for up to 5,900 MW in new capacity, primarily tied data centers proposed in the Tahoe-Reno Industrial Center.
  • Meeting this future demand will require major upgrades to generation, transmission, and substation infrastructure.
  • NV Energy is regulated by the Public Utilities Commission of Nevada (PUCN) under NRS Chapters 703 and 704 to ensure safe, reliable service and fair, reasonable rates.  NV Energy is legally obligate to provide reliable electric service within its designated service territory.
  • To manage the cost of system upgrades, NV Energy uses PUCN Rule 9 agreements, which requires large customers to help fund new transmission and substation infrastructure and commit to minimum usage levels.
  • These agreements help prevent infrastructure costs from being broadly shifted onto existing ratepayers through higher rates.
  • Rule 9 agreements do not apply to generation facilities, meaning new solar, gas, or other plants require separate financing and regulatory pathways.
  • Other regions (e.g., Oregon and parts of the Mid-Atlantic) have found that data centers can disproportionately increase electricity costs for existing customers, prompting regulatory and legislative responses.
  • Washoe County is likely to see increased renewable energy development, particularly solar, especially in the Rural Area north of Reno/Sparks, helping support the state’s 50% renewable goal by 2030.
  • Some developers are pursuing private, on-site power generation (such as Fernley’s Victory Logistics District using natural gas generators) to enable early phases of data center development.
  • Over time, emerging technologies (e.g., micro-nuclear or decentralized generation) may change how power is supplied, though these remain largely unproven for large-scale, safe, and reliable deployment.


The table below shows renewable energy projects reviewed and approved as Projects of Regional Significance (PRS) by the Regional Planning Commission since 2015.Table describing various energy related projects in Washoe County, NV.

WATER USE

Water use for data centers refers to the large volumes of water that can be consumed both directly for cooling IT equipment and indirectly through electricity generation, which also uses water for cooling power plants. Metrics like Water Usage Effectiveness (WUE) are used to measure this by calculating the ratio of a data center’s annual water consumption to its IT equipment energy usage, with a lower WUE indicating greater water efficiency. Consumptive water use, such as evaporative cooling, is not a good fit for arid regions where water is scarce. In these regions closed-loop cooling is preferred.

Water spout icon for water use.
  • Data centers generate significant heat, and cooling systems often use water (evaporative or closed-loop), raising concerns in Northern Nevada’s semi-arid, water-limited environment.
  • Cooling technologies are advancing, and water demand can now be better tailored to local climate and available resources.
  • Google reported that its Storey County data center uses no water for cooling (only domestic use), even at high energy loads — illustrating the potential for low-water or no-water cooling strategies.
  • Data from three recently approved Reno data centers show an average water use of about 0.45 acre-feet per MW, substantially lower than earlier assumptions.
  • The Oppidan facility uses evaporative cooling, resulting in higher water use — approximately 1.6 acre-feet per MW for computing equipment alone.
  • This equates to roughly the annual water use of 8–16 single-family homes per MW of evaporative-cooled computing load.
  • The Webb and Keystone data centers have much lower water demands, at approximately 0.07 and 0.29 acre-feet per MW, respectively, demonstrating wide variability based on technology choice.
  • The data center industry uses standardized metrics such as Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE) to assess energy and water tradeoffs.
  • High PUE indicates inefficient use of power for cooling and overhead in addition to powering the computer systems themselves.  When available, water used for cooling can reduce PUE and increase energy efficiency.
  • The current Project of Regional Significance (PRS) review threshold of 625 AF would apply to approval requests for large water users, including data centers.
  • Some water-based cooling for industrial uses like data centers can be met using treated effluent from our Region’s wastewater treatment facilities. Currently, the Tahoe-Reno Industrial Center (TRI) uses about 350 AF of treated effluent for cooling needs.  The agreement with TRI allows for up to 4.000 acre feet of treated effluent to be delivered if available.


The table below shows recently approved data centers in the City of Reno with key statistics on building size, employment, water use, and energy demand (data courtesy of City of Reno planning staff).

Table shows approved data centers in the City of Reno, NV with key statistics on building size, employment, water use, and energy demand.

Note: Variation in water use reflects differences in cooling technologies and facility design.

Unfolded map icon for land use.

LAND USE

For data centers, land use refers to the allocation of land for their construction and operation, which typically includes not only the buildings for servers and equipment but also space for power, cooling, network infrastructure, and expansion. Data centers present trade-offs in terms of land use considering employment numbers are often low but this keeps associated impacts low, such as traffic. Lighting and noise concerns make data centers more compatible with industrial and commercial areas versus residential.

  • Land use policy is central to how TMRPA evaluates and responds to data center growth and its associated energy needs in Northern Nevada.
  • TMRPA’s role includes reviewing master plan land use amendment requests and Projects of Regional Significance (PRS) that can be proposed by data center developers or to support energy and infrastructure demands.
  • Over the past decade, most energy-related PRS reviews have involved regional utility corridor establishment and realignment, solar generation facilities, and some natural gas and geothermal projects (see table in the “Energy” section).
  • TMRPA is statutorily required to conduct Regional Plan conformance reviews for generation facilities of 5 MW or greater and transmission infrastructure of 60 kV or greater.
  • Since 2015, approximately 1,200 MW of new solar generation has been approved in Washoe County, and further renewable development is expected.
  • TMRPA staff are proactively evaluating energy-related policies in the Regional Plan to prepare for future requests.
  • GIS mapping is being used to identify lands suitable for energy production, considering slope, land ownership, conservation areas, existing generation sites, and transmission corridors.
  • Data centers can locate in industrial or commercial zones, either through new construction or adaptive reuse of existing buildings.
  • Data centers typically have very high square footage per employee (around 5,000 sq ft per employee).
  • This results in low vehicle trip generation compared to other industrial uses like manufacturing or warehousing.
  • However, data centers also involve large land consumption with relatively low employment density, creating land use efficiency tradeoffs.
  • Continuous operation, lighting, security, and equipment noise suggest that data centers should not be sited near residential areas due to compatibility concerns.

ECONOMIC CONSIDERATIONS

Data center development requires significant capital investment, can foster the provision of new infrastructure, and can provide for direct and induced job growth. State regulated incentive programs allow for abatements to both personal property tax and sales tax for participating data centers that meet requirements. Abatements limit initial tax revenues but can provide meaningful revenues over the long-term (e.g., 10 years). Further, local jurisdictions can enter into franchise agreements with energy providers in their jurisdictions to bolster revenues from energy sales.

Dollar sign icon for economic considerations.
  • TMRPA staff have communicated with the Governor’s Office of Economic Development (GOED) and NV Energy regarding tax abatements for data centers.
  • Nevada’s Data Center Tax Abatement Program is a major incentive used to attract data centers to the state.
    • Developers consistently cite tax abatements as a factor in the decision to locate in Northern Nevada.
  • GOED offers 10- and 20-year abatements on personal property tax and sales and use tax for qualifying data centers.
  • Eleven data centers have qualified for abatements since 2016 across Nevada (source GOED)
  • The personal property tax abatement provides a 75% reduction on taxes for equipment such as rack-mounted servers.
  • The sales and use tax abatement can reduce the tax rate on qualifying purchases in Nevada to 2%.
  • Abatement agreements require binding commitments related to employment, wages, and capital investment.
  • Agreements include clawback provisions to recoup abated taxes if commitments are not met.
  • Supporters argue abatements reduce revenues short-term but generate long-term fiscal benefits once abatements expire and facilities continue upgrading equipment.
  • Critics argue abatements result in lost early revenues while local governments still incur costs related to infrastructure, land impacts, and energy system expansion.
  • State law allows local jurisdictions to collect franchise fees of up to 5% of NV Energy’s rate-based revenues for the privilege of operating within their boundaries.
  • Franchise fees are deposited into local governments’ general funds and can provide a significant input to local jurisdiction budgets.
Photo of Regional Planning Governing Board meeting, with TMRPA director and Board Members, with a presentation in the background on a slide.

Past Reports and Presentations

Materials from TMRPA’s Regional Planning Governing Board and Regional Planning Commission Meetings as well as presentations given at various Consortiums

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View Materials and Survey Results
From Our Community Conversation

View More Engagement Materials

For questions, clarifications, corrections or proposed inclusions please email input@tmrpa.org.