Data Centers Are Coming: What It Means for Our Neighborhoods
More data centers are coming. TMRPA did a presentation on them. Here's what you need to know, before one comes to your neighborhood like it did to mine.
Northern Nevada is a hub for data centers — the giant server farms that power streaming, online banking, AI, and everything else that you do on the Internet. They promise investment and jobs, but they bring demands on our power grid, water supply, and land. Not to mention noise and heat.
Jeremy Smith, director of the Truckee Meadows Regional Planning Agency (TMRPA), recently held a public presentation breaking down what’s at stake. Here’s what every Reno resident should know, which he covered in his presentation.
What TMRPA Does
Under Nevada law (NRS 278.026), TMRPA reviews large regional projects to ensure they “conform” to our regional growth plan. That means if NV Energy wants to build a new substation or transmission line to serve a data center, TMRPA checks it against long-term land use and environmental policies.
⚠️ Important: TMRPA doesn’t control electricity rates or water rights — those decisions are made by the Public Utilities Commission of Nevada (PUCN) and agencies like the Truckee Meadows Water Authority.
But the TMRPA reviews set the tone: whether data centers fit our plan, or whether they start reshaping it.
The Energy Question: Who Pays?
Data centers run 24/7 and use large amounts of electricity — especially with the rise of AI systems like ChatGPT. NV Energy updates its Integrated Resource Plan every three years to prepare for new demand.
Agreements exist where data centers often pay upfront for new transmission lines and substations.
The loophole: current rules don’t fully cover generation costs (the actual power plants). Without new regulations, ratepayers could end up footing part of the bill.
Other states (like Oregon) have already passed laws to stop this cost shift. Nevada hasn’t yet.
💡 Neighborhood takeaway: if these rules aren’t tightened, your monthly power bill could creep up to cover someone else’s data farm.
Water: Scarce and Precious
At first, people feared data centers would guzzle water — early reports claimed “12,000 acre-feet per megawatt.” That turned out to be exaggerated.
Local, smaller data centers use less — around 12 acre-feet for 45 megawatts, for cooling, sinks, and toilets. But often, cooling is done with air, not water. But…
The threshold for review is 625 acre-feet per year—projects using less fly under the radar, and are not reviewed.
Water rights sourcing loopholes exist, allowing some private rights to be tapped without as much scrutiny.
Effluent reuse (treated wastewater) is a promising solution, but it is not required.
💧 Neighborhood takeaway: Although current water use appears modest, without stricter regulations and monitoring, groundwater and river rights could still be overstretched.
Land Use: Where Do They Go?
Data centers aren’t friendly neighbors:
They’re huge, taking up acres, like an Amazon warehouse
They run noisy cooling systems and bright security lights 24/7
They employ very few people for the land they take up
They bring limited sales tax revenue, mostly during construction
That’s why they’re usually zoned into industrial areas, not next to homes. TMRPA is considering new zoning overlays, setbacks, and impact fees to keep them compatible with surrounding uses.
🏠 Neighborhood takeaway: Without stricter siting rules, we could see conflicts if data centers try to creep closer to residential areas, like the 265 Keystone data center.
Economic Incentives: Who Really Benefits?
Nevada courts data centers with tax breaks through the Governor’s Office of Economic Development (GOED).
Companies receive tax abatements in exchange for making long-term investments and committing to job creation.
Franchise fees (up to 5% on electricity use) can bring cities/counties revenue.
Clawbacks exist if promises aren’t kept — but enforcement matters.
💵 Neighborhood takeaway: In the short term, abatements mean less tax revenue for schools, roads, and services. The big question is whether long-term benefits outweigh those losses.
Lessons from Other Places
Loudoun County, VA (outside DC): requires conditional use permits, detailed noise/water standards, and impact fees.
Phoenix, AZ, uses master plan amendments and sustainability mandates.
TMRPA is looking at these models — but Reno still has to decide which standards we want here. The Reno City Planning Commission is set to discuss on October 1st. You can read about it on Manny Becerra’s Substack.
Sidebar: Key Legal Points
NRS 278.026 – TMRPA’s mandate.
PUCN Rule 9 – governs utility agreements for new infrastructure.
625 AF/year – current water use review threshold.
5% franchise fee – potential revenue for local governments.
My Experience with Data Centers
I wrote product marketing materials from 1996 to 2023 for data center computing and networking equipment for tech companies like Cisco, Juniper, Citrix, and VMware. I presented to many corporate buyers and visited their data centers.
Here are two articles I researched for Our Town Reno about the 265 Keystone Data Center in my neighborhood before I started Mike’s Reno Report. We were on the verge of having a community space, but it didn’t work out. Now, we're getting a data center, which goes against the master plan.
Former Warehouse, Gym Goes From Planned Burner Party Space to Proposed Data Center
Keystone Data Center Gets New Permit Approval Despite Community Opposition
Where the Community Fits In
TMRPA is opening this up for public input. The key issues on the table:
Should data centers face stricter water use rules?
Should new overlay zones limit where they can build?
Should impact fees help cover infrastructure costs?
Should there be environmental and community impact reports?
Final Word on Data Centers
Data centers aren’t going away. The real question is whether Northern Nevada manages them proactively or gets steamrolled by unchecked growth, and our neighborhoods get ruined.
Your voice matters. If Reno neighborhoods don’t weigh in now, the balance of costs and benefits could tilt against us.
👉 What do you think: are data centers a golden opportunity or a drain on our community?
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