Northern Nevada continues to attract interest from technology and infrastructure companies developing data centers, the digital backbone of today’s global economy. As this growth accelerates, residents and local leaders often have questions about what these projects mean for our region. NAIOP Northern Nevada has prepared the following responses to help provide clarity and facts about data center development in our community.
A: No. The Public Utilities Commission of Nevada (PUCN) and the Consumer Advocate ensure that new data centers are not subsidized by residential or small business ratepayers.
NV Energy uses Rule 9 (Transmission) and Rule 15 (Generation) to allocate the costs of new infrastructure directly to the commercial user. Large power users are also required to provide letters of credit and participate in “take or pay” tariff programs, meaning they pay for the power they contract for even if they do not use it.
The rate-making process is transparent and public, held three times per year, with participation from the public, NV Energy, PUCN staff, and the Consumer Advocate. These safeguards ensure that ratepayers are not affected by new data center demand.
A: Data centers must comply with all existing water regulations and supply limits. Developers work closely with local and state authorities to ensure water resources are responsibly managed.
Water use in these facilities is measured using Water Usage Effectiveness (WUE™), a global industry standard created by The Green Grid, an alliance of companies such as Intel, Microsoft, and Symantec. WUE calculates how much water a data center uses for each kilowatt-hour of IT energy consumed, helping operators track and reduce consumption tied to cooling and power generation.
In Northern Nevada, water use is considered a non-issue for most projects due to the region’s use of non-evaporative or closed-loop cooling systems and the opportunity to incorporate reclaimed or effluent water sources.
A: Yes. In fact, most data centers are actively contributing to renewable energy adoption.
Many operators initiate renewable integration as part of their development plans. Nevada’s Renewable Portfolio Standard (RPS) already mandates a statewide transition to renewable energy, ensuring that data centers are built in alignment with the state’s sustainability goals.
Data centers in Northern Nevada often use non-evaporative cooling systems suited to the region’s dry climate. Some projects, such as Switch’s investment in effluent water infrastructure at the Tahoe-Reno Industrial Center (TRIC), demonstrate how private development can also benefit municipal water systems while minimizing environmental impact.
A: Data centers generate significant economic and fiscal benefits for Northern Nevada.
According to NAIOP’s analysis, these projects provide:
• Sales tax contributions of about 2 percent following standard abatements.
• Full property tax payments with no abatements.
• Regular equipment replacement every three years.
In addition to direct tax revenue, these developments stimulate local construction and service industries, helping diversify the regional economy and strengthen Nevada’s long-term fiscal base.
A: Data centers support both short-term construction jobs and long-term operational and induced employment.
Construction typically lasts two to five years, depending on project size. A single hyperscale data center can employ up to 1,000 workers at peak construction.
Although ongoing facility staffing is relatively small, each direct job supports up to five induced jobs in sectors such as maintenance, security, utilities, and local services, creating a strong multiplier for regional employment.
A: Local municipalities oversee zoning, land use, permitting, and infrastructure coordination for data center projects. However, certain aspects, including energy regulation and utility tariffs, fall under state and federal jurisdiction.
NAIOP Northern Nevada is advocating for flexible, forward-looking zoning policies that allow for by-right zoning for data centers in specific appropriate areas. This approach helps communities remain competitive and responsive to rapid technological change. Overly restrictive local rules could unintentionally slow innovation or lead to obsolete buildings.
A: Data centers represent the digital backbone of modern industry. They enable logistics, manufacturing, healthcare, education, and commerce, all of which depend on reliable, secure data infrastructure.
Beyond their operational value, data centers bring high-wage technical jobs, long-term tax revenue, minimal traffic impacts, and infrastructure investment to the region. They also create opportunities for renewable energy innovation and help position Northern Nevada as a national hub for technology and economic diversification.
NAIOP Northern Nevada, the Commercial Real Estate Development Association, is an association of developers, owners, investors and professionals of office, industrial, retail, and mixed-use real estate.
