Committee adopts committee substitute for SB 250, moves bill from committee

The Senate Community & Regional Affairs Committee on April 21 held its third hearing on Senate Bill 250, legislation that sets requirements for utilities serving data centers. Senator Lukey Tobin explained the committee substitute (CS), and staff member Louis Flora reviewed the principal changes.

Flora told the committee the CS adds financial security language at the request of a public utility: if serving a data center requires an electric or gas utility to incur capital investments exceeding $1,000,000, the contract must require the data center to provide financial surety to the utility. The CS also requires data centers to submit a municipal water‑usage plan detailing monthly water usage and wastewater discharge as part of a community benefit agreement. In addition, the CS lowers the size threshold that triggers the bill's terms from a 20 megawatt peak demand facility or 2 billion cubic feet (BCF) of natural gas to a 15 megawatt peak demand or 1.5 BCF of natural gas; it removes a prior threshold tied to 20% of a utility's total sales so smaller data centers and microgrids are not captured.

Flora said the water‑use language was modeled on a recent Anchorage municipal ordinance and that the changes reflect recommendations supplied to the committee by the Alaska Center for Energy and Power. The committee adopted the proposed committee substitute by unanimous consent after explanation and then, later in the session, Senator Greg Jackson moved to report SB 250 from committee with individual recommendations and an accompanying fiscal note. There was no recorded objection and the motion carried.

Why it matters: The CS tightens protections for utilities and communities that host data centers by requiring financial surety where utilities would shoulder large capital costs and by requiring water‑use transparency for municipalities. Lowering the size threshold expands the range of facilities subject to these provisions, while removal of the 20% sales metric narrows application to avoid capturing microgrids and small sites.

The committee adopted the CS and reported SB 250 from committee; next steps will be inclusion of the committee recommendations and any conforming legal edits.