Claim that data centers could be a 'utility like electricity' prompts pushback

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(The Center Square) - The prospect of a data center company being able to take land by eminent domain stirred near-unanimous support for a House bill that would prevent that scenario - and its sponsor on Tuesday said he was motivated in part by a statement by a tech titan.

Democratic Rep. Chris Pielli of Chester County, speaking the day after the House voted 202-1 to pass his bill, referred to a March statement by OpenAI Chief Executive Officer Sam Altman. At the time, Altman said, "We see a future where intelligence is a utility like electricity or water and people buy it from us on a meter."

In Pennsylvania, utilities have the ability under state law to seek Public Utility Commission approval to take, occupy and condemn property.

Pielli told colleagues on the House floor before the vote Monday that the General Assembly had to act "before this digital dictatorship takes root." The bill that got approved would prohibit a "commercial data center" from being designated a public utility.

Pielli introduced the bill in late June.

"I reacted as quickly as I could when I first heard about Altman and others saying 'This is our vision,'" Pielli said.

A similar bill was introduced in the Senate by Democratic Sen. Katie Muth of Chester County. In a memo supporting her bill, Muth said "billionaire tech bros" were "invading our Commonwealth with hyperscale data center proposals" and the state's laws had to be changed to "ensure data centers are prohibited from obtaining the legal rights of a public utility."

Nonetheless, the Pielli and Muth bills have virtually no chance of becoming law this year.

Muth's bill has seen no activity in the Republican-controlled Senate. And while Pielli's bill passed the Democratic-run House on Monday and was sent to the Senate, the latter chamber's final day of voting on any bills of substance is expected to be Wednesday.

A bill typically must be considered on three different days to pass a chamber.

Pielli faces a Republican challenger in the Nov. 3 election. On Tuesday he said that if he wins, he will re-file the bill when the new legislative session starts.

"Time is of the essence," he said.

Republican Rep. Mark Gillen of Berks County on Tuesday said he has heard criticism within his district of data centers.

The potential of such a company getting the power of eminent domain, he said, was a "red flag" to lawmakers. Beyond that, he said, the cost of data centers' product would probably soar higher if companies obtained public utility status.

"The public perception is that the utility is going to reach for the stars with a rate increase, and land on the moon," Gillen said.