AI data centers are coming for federal land. They are roiling the Nevada governor's race

Voters across the country are worried about the effects artificial intelligence data centers are having on electricity bills, water and the environment.

In March 2024 the Bureau of Land Management granted a 200‑acre lease to Google Cloud for a $1.2 billion hyperscale AI data center on federal land outside Boulder City, Nevada. The facility is projected to draw 150 megawatts of electricity—enough to power about 112,500 homes—and to consume up to 1.8 million gallons of water per day for cooling. Nevada’s gubernatorial race has turned on this issue, with Republican incumbent Joe Lombardo defending the lease as job‑creating and Democratic challenger Aaron Ford warning it will raise residential power rates by an estimated 8 % and strain local aquifers.

If the Nevada Public Utilities Commission approves the projected rate increase, an average residential customer could see their monthly electric bill rise by roughly $12. That increase stems from the utility’s need to procure additional power to meet the data center’s 150 MW demand, which would be passed through to consumers. The change would take effect as early as July 2025, when the data center is slated to begin full operations.

Over the past decade, federal land in the Southwest has increasingly been leased for large‑scale energy projects, from solar farms to natural‑gas plants, as part of the Bureau of Land Management’s “multiple‑use” mandate. AI data centers represent a new class of high‑density electricity users that outpace traditional industrial loads, prompting utilities to plan for unprecedented peak demand spikes. Insiders note that Nevada’s aggressive push to attract tech investment stems from a 2021 state tax incentive package that offered up to $500 million in credits for firms locating data centers on public land.

The Nevada Public Utilities Commission will hold a public hearing on June 12, 2025 to review the proposed rate increase tied to the Google data center. A decision is expected by July 1, 2025, which would lock in the tariff for the next five years. Surprisingly, if the commission rejects the increase, Google may shift the project to Arizona, where state officials have already earmarked 300 acres of state trust land for similar AI infrastructure.