The Reason AI Data Centers Might Come To Yakima

The only issue seemingly more contentious than flock cameras, is the existence of AI data centers. Do we quicken technological progress and GDP growth or protect our county’s water from being depleted and utility bills from skyrocketing?

What Are AI Data Centers?

AI data centers are massive computer warehouses built to train artificial intelligence models on innumerable pieces of information. Running tens of thousands of these AI chips requires massive amounts of electricity to power them and water to cool them since they create intense heat while operating. While no developer has shown interest in the Yakima area yet, the prospect is very possible.

The Two Sides

This month, the Yakima County Board of Commissioners is considering a six-month moratorium on data center construction due to pressure from Yakima residents. Many Yakimanians are against the facilities due to our current water scarcity and drought, as well as the prospect of high electricity bills.

Yakama Nation members are concerned that building on their land would be a threat to their sacred sites and violate their treaty rights. Supporters argue that building data centers increases property tax revenue, creates new construction jobs, and modernizes the region.

 

The Other Side Some May Be Missing

Many have pointed out that AI data centers coming to Yakima would be unlikely without market distortions. Let me explain.

The vast majority of Yakima’s energy comes from local hydropower. The Bonneville Power Administration, which markets power from Columbia River dams, is mandated to sell electricity at low fixed prices. Public utility districts are non-profit as well, creating artificially low costs.

These low costs attract data centers and make it so they don’t have to compete with agricultural interests in a market economy. If you are not convinced by that, the Washington State government also exempts data centers from all state and local sales taxes on equipment, infrastructure, and installation labor. Our water system also operates under market distortions.

If these market distortions were removed, data centers likely would never move to Yakima. They would have to bid against heavily incentive-driven agricultural interests for water and power and would move to less competitive regions.

If they were forced to pay their fair share of taxes in Washington State, they would undoubtedly relocate to states without a sales tax.

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What Are Yakima’s Thoughts?

Instead of arguing whether we want data centers, let’s acknowledge the artificial government generated incentives that are attracting them to our regions in the first place. Please comment your thoughts!