Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Today, we're headed to Fayetteville, Georgia, just south of Atlanta,
Speaker 2: and our first stop is the Hopeful Primitive Baptist Church.
Speaker 2: This small, one room chapel has been standing for two
Speaker 2: hundred years.
Speaker 3: When you walk in that door, you feel the history.
Speaker 3: I mean, you can see the top hats and tails,
Speaker 3: you can see the regalia of the time. You can
Speaker 3: see the horses in the in there in what is
Speaker 3: now the parking lot.
Speaker 2: Scott Johnson is the pastor there and a longtime resident
Speaker 2: of the area.
Speaker 3: It's close enough to the city to be close enough
Speaker 3: to the city, but far enough away to be far
Speaker 3: enough away. We love Fayetteville and it's a very special place.
Speaker 1: Yeah, you know, it's a small town. For a long time,
Speaker 1: it's been a bedroom community, a lot of people commuting
Speaker 1: to Atlanta, you know, working for Delta. People choose it
Speaker 1: because it's because it's pretty a nice, quiet town.
Speaker 2: Bloomberg reporter Josh Saul covers energy and that's what drew
Speaker 2: his attention to Fayetteville, along with another one of our colleagues,
Speaker 2: Don Lim.
Speaker 1: And then the reason we're interested in it is that
Speaker 1: Blackstone came knocking.
Speaker 2: Blackstone, the world's largest private equity firm.
Speaker 1: And Blackstone's data center development firm QTS decided that this
Speaker 1: town in Georgia was a good place to build a really,
Speaker 1: really big data center. And data centers are the thing
Speaker 1: that underpin our modern technological lives. When I text a
Speaker 1: gift to my wife, when you have a baby and
Speaker 1: the doctor runs a bunch of tests, or if you
Speaker 1: use chat GPT, all of that runs through data centers,
Speaker 1: and there's a lot of money in them. Big gold
Speaker 1: rush to build as many data centers and people pay
Speaker 1: you to be in them.
Speaker 2: Big tech companies in particular have been signing long term leases.
Speaker 2: They've been building their own data centers and even exploring
Speaker 2: the possibility of nuclear energy production to make sure there's
Speaker 2: enough power to run all the data centers they'll need
Speaker 2: in the future. At first, Fayetteville was excited to cash
Speaker 2: in on this piece of the AI gold rush. That is,
Speaker 2: town residents started to grasp how much power a data
Speaker 2: center would need to operate.
Speaker 1: Where people who live in the town really started noticing
Speaker 1: that this was coming was when the local power company
Speaker 1: started coming around and saying, we're going to need to
Speaker 1: build a big power line to get electricity to the
Speaker 1: data center, and the power line's going to need to
Speaker 1: come through your yard.
Speaker 2: That was the message to more than one hundred homes
Speaker 2: and private properties, including the Church of Scott Johnson, the pastor.
Speaker 3: These are not just regular street power line polls that
Speaker 3: you think of. These are massive, high energy, high frequency
Speaker 3: power lines. And so they're going to be draped on
Speaker 3: two sides of our property up along New Hope Road
Speaker 3: and across the intersection right at our corner. So on
Speaker 3: two different corners, we will be draped with these invasive,
Speaker 3: ugly monstrosities.
Speaker 2: I'm David Gura, and this is the big take from
Speaker 2: Bloomberg New Today on the show Not in My Backyard,
Speaker 2: the Data Center Edition. What American demand for data centers
Speaker 2: means through the communities across the country where they're built,
Speaker 2: the companies that invest in them, and are power consumption.
Speaker 2: The town of Fayetteville, Georgia, had been trying to get
Speaker 2: a data center because of the tax revenue that would
Speaker 2: come with it, So at first, landing a big data
Speaker 2: center developer like QTS seemed like a big coup for
Speaker 2: the community. QTS has data centers all across the US,
Speaker 2: and claims to be the fastest growing data center company.
Speaker 2: Microsoft soon expressed interest in the Fayetteville data center. In Bloomberg'
Speaker 2: Josh Saul says Fayetteville had a lot to offer.
Speaker 1: One of the big reasons is that Georgia Power, the
Speaker 1: power company there, is good at providing power. It's what
Speaker 1: they do, so the electricity is relatively cheap, it's very reliable,
Speaker 1: and there's open land.
Speaker 2: We're going to talk about the amount of power that
Speaker 2: these things need, but maybe we could talk about what
Speaker 2: they look like physically first. How big is a data center,
Speaker 2: a modern data center?
Speaker 1: I guess the simplest way to say is that they
Speaker 1: are huge. You could think of two walmarts stacked on
Speaker 1: top of each other with no windows. The ones that
Speaker 1: have been inside recently are relatively small, maybe a tenth
Speaker 1: the size in terms of energy consumption as this one
Speaker 1: in Georgia, and when you're inside them, they are still enormous,
Speaker 1: you know, just huge, huge rooms. You could play a
Speaker 1: sick game of paintball in there, and just really really big.
Speaker 1: And in parts of the country, like in northern Virginia,
Speaker 1: when you drive through, you drive through areas that are
Speaker 1: just all data centers, So you just drive by them
Speaker 1: for a while and there's just data center after data center,
Speaker 1: and there's some slightly different architectural elements, and they're oriented
Speaker 1: in different directions, but they all look roughly the same
Speaker 1: and all have the same small parking lots with you know,
Speaker 1: a couple of techs or a couple of prospective clients
Speaker 1: parked there.
Speaker 2: How different are the data centers that are being built
Speaker 2: today from ones that we were seeing being built, you know,
Speaker 2: five years ago, ten years ago. What sets them apart
Speaker 2: from what we've seen in the.
Speaker 1: Past, right, Well, they're just a lot bigger and a
Speaker 1: lot more powerful. I mean you talk to old gues
Speaker 1: in the industry and they're kind of like, yeah, I
Speaker 1: mean when I started out, we had a data center
Speaker 1: in our office, it was just called the computer room,
Speaker 1: and it was just a room that had a couple
Speaker 1: of computers on it, and at that point that was
Speaker 1: enough to hold the whole office's technology. Now that is
Speaker 1: definitely not the case. So yeah, the simplest way to
Speaker 1: answer it is the way that data centers have changed
Speaker 1: is that they continue to get bigger, they continue to
Speaker 1: get more powerful, and they continue to take on new tasks.
Speaker 1: Now AI is starting to just be a part of
Speaker 1: our everyday life. And all of that runs through data
Speaker 1: centers like the one in Georgia that we're talking about,
Speaker 1: but also like the ones in northern Virginia or in
Speaker 1: the deserts of Arizona, or Ireland or Singapore or kind
Speaker 1: of any of these other places we're talking about.
Speaker 2: How should we think about the amount of power that
Speaker 2: these data centers require.
Speaker 1: It's so much power this one data center in Georgia
Speaker 1: is going to use over giggle weep. I mean, you've
Speaker 1: ever seen the Simpsons that whole nuclear plant. Mister Burns
Speaker 1: never said exactly how what its capacity was, but that
Speaker 1: nuclear plant. Imagine that whole thing powering just one big
Speaker 1: data center.
Speaker 2: I mean, that's astonishing.
Speaker 1: It's really a lot of power. It surprises you because
Speaker 1: for a long time in the US, power demand was flat.
Speaker 1: You know, even as people built more houses, things got
Speaker 1: generally a little more efficient, and power demand would creep
Speaker 1: up by one or two percent a year. It was
Speaker 1: just just a very slow, very sleepy industry. That has
Speaker 1: definitely changed. People and our economy just need a lot
Speaker 1: more electricity than they used to. So we went from
Speaker 1: that really slow load growth to just this kind of
Speaker 1: hockey stick projection that we're seeing now. I mean, some
Speaker 1: analysts I talk to compare it to you know, we
Speaker 1: haven't seen this kind of change in our energy systems
Speaker 1: in the US the amount of electricity we use since
Speaker 1: World War Two.
Speaker 2: The US Department of Energy estimates that growth in electricity
Speaker 2: usage by data centers has tripled over the last decade,
Speaker 2: and it expects that growth to double or triple again
Speaker 2: in the next three years. Josh, how wide is the
Speaker 2: gap between the need what these data centers need in
Speaker 2: terms of power and what these utilities are able to provide.
Speaker 1: Well, the utilities are pretty happy about building a lot
Speaker 1: more generation, and that's really changed the outlook for some
Speaker 1: of these companies because instead of what we saw a
Speaker 1: few years ago in terms of they were going to
Speaker 1: be building more clean energy, shutting down their old coal
Speaker 1: plants and building little or no new gas plants, now
Speaker 1: they're sort of, WHOA, We're not going to shut down
Speaker 1: our old coal plants. We need to build a lot
Speaker 1: of new gas and we're going to build new clean
Speaker 1: energy also. But it's completely changed the generation plans for
Speaker 1: these companies.
Speaker 2: Can you just talk a little bit about the investment
Speaker 2: that's flowed into these data centers.
Speaker 1: Yeah, I mean Blackstone Bough QTS and twenty twenty one,
Speaker 1: they turned it into the fastest growing US data center landlord,
Speaker 1: and it now makes a lot of money for them.
Speaker 1: You know, they have a footprint right now that's got
Speaker 1: roughly fifty billion dollars in data centers, and there's another
Speaker 1: fifty billion of you know, prospective data centers perspective developments
Speaker 1: in the pipeline. So it's a huge operation.
Speaker 2: In something it sounds like Lackstone, and I'm sure others
Speaker 2: are very committed to. They see this as being an
Speaker 2: opportunity now and certainly one into the future.
Speaker 1: Yeah. I means alone now has something like two and
Speaker 1: a half gigawatts of signed power capacity, meaning that's data
Speaker 1: centers with that much power that are signed to flow
Speaker 1: into them. Their goal is to have more like six
Speaker 1: gigawats as aiming towards and for capacity, I mean that's
Speaker 1: more electricity than is used by the city of Miami.
Speaker 2: After the break, Fayetteville residents and city officials were surprised
Speaker 2: by the amount of power their new neighbor is going
Speaker 2: to require. And that is when the backlash started. That
Speaker 2: data center in Fayetteville, Georgia is now under construction on
Speaker 2: six hundred acres. When it's finished, ten hulking bunkers will
Speaker 2: hold thousands of computers, and Bloomberg's Josh Saul says it's
Speaker 2: expected to consume as much electricity as about a million
Speaker 2: US households. A million households, Well, that figure came as
Speaker 2: a surprise to some people in Fayetteville.
Speaker 1: Town officials sort of assumed, I mean, like a new
Speaker 1: super market or a new house, it's just going to
Speaker 1: plug into our current electric rid. They did not know
Speaker 1: that it was going to take massive new power lines.
Speaker 2: And is that simply a lack of people in that
Speaker 2: town doing their due diligence or has he been reporting
Speaker 2: on this in other communities? Is this perhaps common?
Speaker 1: Well, it was a little hard to suss out. Local
Speaker 1: officials told my co writer Don Lim that it was
Speaker 1: their understanding or they were told by the companies that
Speaker 1: the local infrastructure was sufficient, that yep, what's here is fine,
Speaker 1: nothing new needs to be built. People close to QTS
Speaker 1: told us that what they said to local officials was
Speaker 1: based on what Georgia Power told them. And then when
Speaker 1: we went to Georgia Power. Georgia Power said that transmission
Speaker 1: planning is a long process and they don't disclose confidential
Speaker 1: client information to town officials. So, I mean, that's all
Speaker 1: very complicated. But what it boils down to, at least
Speaker 1: from the stance from the viewpoint of homeowners and town officials,
Speaker 1: was that they did not know this big transmission line
Speaker 1: was going to be needed until the deal was basically done,
Speaker 1: and there were Georgia Power workers knocking on people's doors
Speaker 1: saying they wanted to buy an easement through their property.
Speaker 1: That's the point when TANN officials found out, oh kind
Speaker 1: of package up with this deal is going to be
Speaker 1: a huge new transmission line that's really going to change
Speaker 1: the face of our town.
Speaker 2: The power lines were set to encroach on more than
Speaker 2: one hundred properties and houses.
Speaker 1: I mean, nobody likes a big transmission line coming through
Speaker 1: their property. You know, sometimes when I'm working on this
Speaker 1: kind of story, I think about the house I grew
Speaker 1: up in Alaska, and like, if a big transmission line
Speaker 1: was built right through the view in front of the
Speaker 1: house that my mom and dad built with their hands,
Speaker 1: you know, it's like that doesn't make anybody happy. That's
Speaker 1: roughly the reaction that people in Fayetteville had is like, no,
Speaker 1: I don't want even for ten grand or one hundred grand. No,
Speaker 1: I don't want to sell you an easement for a
Speaker 1: massive power line to come through where I like to
Speaker 1: you know, watch deer. But underneath all of that was
Speaker 1: sort of the understood truth that this was a David
Speaker 1: versus Glad situation and the power line was coming. And
Speaker 1: people are also scared of eminent domain, which is rarely used,
Speaker 1: but kind of is you know, underpins all these negotiations,
Speaker 1: which is, you know, if there's a few holdouts along
Speaker 1: the path of an important piece of public infrastructure like
Speaker 1: a highway or a power line, you know, a company
Speaker 1: like Georgia Power can go to court and can get
Speaker 1: the right to buy the land and buy the easement
Speaker 1: by force. So yeah, people were you know, protesting and unhappy,
Speaker 1: but they, I think at some point understood that the
Speaker 1: power line was coming.
Speaker 2: Josh, what did those homeowners tell you about their response
Speaker 2: when they started getting those knocks on doors?
Speaker 1: Yeah, well, kind of right from the beginning, there were
Speaker 1: some some ring leaders or some organizers, and people would
Speaker 1: get together and talk about, well, if none of us
Speaker 1: sell out, then the power line won't come through here
Speaker 1: and maybe it'll have to go somewhere else, or maybe
Speaker 1: they'll they won't build this data center after all. There
Speaker 1: was even a group of people who went to one
Speaker 1: of the meetings held by the regulators Halloween's to everyone,
Speaker 1: the state commission that regulates utilities like Georgia Power. We
Speaker 1: do have some folks signed up for a public comment
Speaker 1: and they went there to speak before the regulation saying like,
Speaker 1: we don't want this thing here Ross. We and the
Speaker 1: community are extremely upset, which is why we are here
Speaker 1: today appealing to you to police help us commissioners. These
Speaker 1: people are being asked to do is destroy the value
Speaker 1: of their property and they're only serving one customer, the
Speaker 1: data set, so there was a lot of resistance.
Speaker 2: One home owner told Josh and his co reporter that
Speaker 2: Georgia Power first offered only twenty eight hundred dollars for
Speaker 2: an easement on her property. Months later, that offer came
Speaker 2: up to around one hundred and forty thousand dollars, but
Speaker 2: she still felt like that wasn't enough to make up
Speaker 2: for what she thought it would do to her home value.
Speaker 1: We talked to some appraisers for the story, and one
Speaker 1: told us that the range that big power lines can
Speaker 1: drop a property's value can be, you know, ten to
Speaker 1: thirty percent. It can be higher in rural areas because
Speaker 1: people are in those areas because they value that quiet,
Speaker 1: those pretty lanes.
Speaker 2: After the community backlash, some locals claim there were adjustments
Speaker 2: to the power the power lines, including moving one of
Speaker 2: the power lines farther away from Pastor Scott Johnson's church.
Speaker 2: Georgia Power, owned by Southern Company, disputes the power line
Speaker 2: would have been on church land and said it engaged
Speaker 2: with dozens of property owners and residents to work to
Speaker 2: address their concerns. QTS said it had no input on
Speaker 2: the location of power infrastructure, but even with the lines
Speaker 2: now across the street, Pastor Johnson still is not happy.
Speaker 3: We all appreciate electricity. We're not trying to be bad neighbors,
Speaker 3: but we don't want you to be a bad neighbor either.
Speaker 3: Simply bury the lines, that's all we ask, and it
Speaker 3: has been ignored. They said it would cost too much,
Speaker 3: so you know it's costing homeowners. We know it looks
Speaker 3: like it's happening, and we've resigned ourselves to that likelihood.
Speaker 3: We still would like to hope that that one of
Speaker 3: the rocks in our sling will find the forehead and
Speaker 3: they will break and say, you know, let's bury the lines,
Speaker 3: do the right thing.
Speaker 2: Josh, let me ask you about the other side of this.
Speaker 2: So what has QTS said about what protesters have alleged
Speaker 2: and what if they said about just the benefits of
Speaker 2: building this data center and sort of the effect it
Speaker 2: might have on this community.
Speaker 1: I mean, QTS makes the very fair point that these
Speaker 1: data centers are in huge demand. QTS is not creating
Speaker 1: the demand we all are with our phones and with
Speaker 1: the companies that we use. And I don't know, he's
Speaker 1: like all parts of our technologically driven world or AI,
Speaker 1: but I mean it's all around us. So QTS would
Speaker 1: say that they're fulfilling a need, like there's data centers
Speaker 1: that are going to get built. There's companies and people
Speaker 1: that want to fill them. And they would also make
Speaker 1: points about town officials wanted a data center here, and
Speaker 1: they would also make points about, you know, the tax
Speaker 1: revenue of having a data center in your town. I mean,
Speaker 1: I think the first year that QTS operates this data center,
Speaker 1: it's going to throw off enough tax revenue just for
Speaker 1: the school board for the equivalent of half a dozen
Speaker 1: teacher salaries. So I mean, I think, as I do
Speaker 1: this kind of reporting, I think a lot about these balancing,
Speaker 1: balancing these different desires. And I mean, I like green spaces,
Speaker 1: I like going for walks with my kids. I like
Speaker 1: having woods and being able to walk through them. But
Speaker 1: you know, I also like the idea teacher salaries, and
Speaker 1: I like the idea of the US being a technological leader.
Speaker 1: So it's just hard. It's hard to balance all these things.
Speaker 2: As we noted, the data center boom is being propelled
Speaker 2: in part by consumer and business demand for AI, which
Speaker 2: needs massive amounts of computing power. But the release of
Speaker 2: China's deep Seek AI model did raise some questions over
Speaker 2: whether all this computing power is really needed, And this
Speaker 2: week there was one sign that companies might be rethinking
Speaker 2: their own power demands. T. D. Cowen reported that Microsoft
Speaker 2: had canceled some leases for US data center capacity. This
Speaker 2: is the Big Take from Bloomberg News. I'm David Gura.
Speaker 2: This episode is produced by Alex tie. It was edited
Speaker 2: by Tracy Samuelson and Kara Wetzel. It was fact checked
Speaker 2: by Adriana Tapia and mixed and sound designed by Alex Segura.
Speaker 2: Special thanks to Don lim Our Senior producer is Naomi
Speaker 2: shaven Our, Senior editor is Elizabeth Ponso. Our Executive producer
Speaker 2: is Nicole Beemster. Bor Sage Bowman is Bloomberg's head of podcasts.
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