The Data Center Boom and Idaho’s Resource Future
The Rise of Data Centers
It is hard to ignore the artificial intelligence (AI) boom. AI now influences everything from internet searches and meeting transcriptions to cloud storage. Yet data centers are not new—they have been a part of our digital infrastructure for decades. What has changed is their scale.
In 2016, a typical data center ranged from 50,000 to 150,000 square feet and required 10–30 megawatts (MW) of power. Today, hyperscale facilities commonly exceed 600,000 square feet, with power demands reaching hundreds of megawatts. These projects require far more land, water, and energy than their predecessors.
The United States has become the global leader in data centers, hosting more than 4,000 facilities—more than the next 14 countries combined. Together, they consume approximately 176 terawatt-hours (TWh) of electricity annually.
Idaho’s Emerging Role
In the southwest Idaho city of Kuna, construction is well underway on Meta’s massive 960,000 square-foot data center estimated to cost $800 million - $1 billion. The facility could require up to 200 MW of power and consume 400,000 to 600,000 gallons of water each day.
For a state already facing drought concerns, the stakes are significant. Meta has pledged that the facility will become "water positive" (when an entity returns more clean water to the environment than it consumes in its operations) by 2030, but additional data center projects are already being discussed for the area, ensuring the debate is far from over.
Just across the Utah border, Kevin O’Leary of Shark Tank fame is backing the Stratos Hyperscale Data Center, a project approved by the Box Elder County Commission despite strong public opposition. Estimates suggest it could require up to 9 gigawatts (GW) of power—roughly double Utah’s current statewide electricity demand—while consuming potentially billions of gallons of water annually. Critics argue it could increase electricity costs, strain limited water supplies, and dramatically increase carbon emissions in one of the driest regions of the country due to a huge gas powered plant being built for this project. Governor Cox has called the decision to build Stratos “not good” and states that in the future, his office and the Utah legislature should be involved.
Idaho’s Policy Response
The question facing Idaho is clear and critical: how should the state balance economic development with finite water, energy, and land resources? The stakes—for both current and future generations—couldn’t be higher.
In an interesting move, a proposed data center in Pocatello was recently rejected following widespread concerns over water use, wastewater management, and pressure on local infrastructure. This story is not over as the developer is now appealing this decision.
During the 2026 legislative session, Idaho lawmakers addressed some of these concerns through several bills:
HB 895 specifically protects Idaho’s precious water resources by limiting direct withdrawals while setting a standard that new development must adhere to Idaho’s long-standing culture of water sustainability. This bill passed with little opposition.
HB 911 addressed new large electricity loads of 50MW or greater. Since natural gas plants are being built near data centers and lease power to developers, ICL prefers at least some renewable energy usage to reduce carbon emissions. This bill passed and is law.
HB 897 would have limited sales tax exemptions to only internal servers, phased out large property tax exemption allowances, required advance notice of water usage and set new criteria for electricity usage. It passed unanimously in both chambers but never made it to the Governor's desk.
Additional Policy Solutions Needed
Data centers will almost certainly return to the agenda during the 2027 session of the Idaho Legislature. As Idaho considers how to accommodate this rapidly growing industry, lawmakers should look for policies that protect taxpayers, conserve resources, and ensure that the costs of growth are not shifted onto local communities.
Although HB 897 was not signed into law, eliminating special sales and property tax exemptions for data centers should remain a priority. Data center developers are often backed by some of the world's largest corporations, and these facilities typically create relatively few permanent jobs once construction is complete. Meanwhile, tax exemptions can reduce revenue available to local governments for schools, emergency services, roads, and other essential public services.
HB 895 represented a positive step toward addressing water consumption, but additional measures should be considered. Requiring data centers to utilize closed-loop cooling systems, where feasible, could significantly reduce water use and lessen impacts on local water supplies.
Lawmakers should also address the growing electricity demands associated with data centers. Requiring participation in demand-response programs would allow facilities to reduce energy consumption during periods of peak demand, helping improve grid reliability and potentially reducing costs for other customers. Additional policies that encourage energy efficiency and the use of low-carbon power sources could help limit the industry's impact on electricity rates and greenhouse gas emissions.
The debate in Idaho extends far beyond any single project. It raises fundamental questions about who controls the future of our water, energy, and land resources—and how those decisions will shape Idaho for generations to come.
