Opinion: Data centers on our terms— let’s write the Mat-Su Data Center Plan together

By
Dana Raffaniello
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0
Image by Brett Sayles

First published on the author’s personal Substack, November 11, 2026.

Data centers are coming to Alaska, and the Mat-Su is near the front of the line. In March the Borough Assembly put borough staff to work marketing land near Port MacKenzie, Big Lake and the West Susitna corridor for a coal developer looking for a data center customer. In late May that same developer leased 829 acres of University of Alaska land inside the borough’s own port district. On Nov. 10 the state approved handing about 6,800 acres near Houston to AIDEA for an industrial district that could include data centers. A day earlier, the governor announced a new AIDEA company built to put state money into data centers and eventually sell stakes in them to Alaskans.

I support data centers in the Mat-Su. I have said so in print, and I still believe the borough has real advantages: cold air, open industrial land, a deepwater port and room to build power. I am writing this as a resident, not as anyone’s campaign.

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I also know that most people who have spoken up on this oppose it. At the Assembly’s March 17 meeting, more than a dozen people testified against data centers and about three spoke in favor. More than 2,300 people commented on the Houston land transfer, most of them opposed. Those residents are not foolish for being worried. Some of what they have heard is accurate, some is outdated, and some is simply wrong. Either way, their questions deserve real answers, and right now nobody is giving them any.

That is what we should change. The people of this borough should decide what a data center plan protects, and the Assembly and staff who work for us should write it with us, not around us.

How the borough has handled this so far

I went back through the public record of the past year. None of what follows is wrongdoing. It is a habit: decide first, explain later, and let others set the terms.

  • The Terra partnership. In early March the Assembly voted 5-2 to have borough staff spend two years helping Terra Energy Center find companies to build a data center or other large power user on borough land. Mayor Edna DeVries vetoed it, pointing out that the sites had not been vetted and the Assembly had never decided whether a data center needs a conditional use permit. On March 17 the Assembly overrode her 6-1, with only Stephanie Nowers voting no. Debate ended when a member called the question while Nowers was still speaking.
  • The Houston land transfer. The borough manager and Houston’s mayor learned about the state’s plan to give AIDEA nearly 20,000 acres of public land from a state public notice in July. Houston, Willow and Meadow Lakes all voted unanimously against it. Assembly member Ron Bernier first backed AIDEA’s plans there, then after residents organized he wrote the September resolution opposing the transfer, which passed unanimously. On Nov. 10 the state approved the transfer anyway, at about 6,800 acres.
  • The university lease at Port MacKenzie. The University of Alaska leased its land inside the borough’s 8,000-acre port district to Terra without telling the borough, even though the borough was trying to secure that ground for the port’s rail spur. The port manager objected publicly. I found no Assembly action on it.
  • HB 381. The governor’s gasline tax bill would have stripped the Mat-Su of the power to tax roughly 180 miles of pipeline and replaced it with a state formula. The borough’s public position supported the bill’s structure and asked only that the replacement tax start sooner. I could not find a single Assembly resolution defending the borough’s taxing authority.
  • The pause that never got a hearing. On Oct. 20, Nowers brought RS 26-117. It asked the state to consider a pause on data centers over 20 megawatts and directed the borough manager to draft a six-month local moratorium so the borough could study the issues. According to the roll call printed on the resolution, the Assembly voted 6-1 to pull it from the agenda before any debate or public testimony. Bowles, McKee, Sumner, Gamble, Fonov and Bernier voted to remove it. Nowers voted to keep it.

So in March, the Assembly overrode the mayor to help market land for one developer. In October, the same members would not even discuss a measure asking staff to study who pays for the power, the water and the infrastructure.

There is good news in the record, too. When residents organized on Houston, the Assembly changed course within two months. When Road Service Area boards pushed back on letting overweight trucks onto borough roads during breakup, the Assembly added a clause making haulers pay for the damage. This Assembly can listen. It just needs to do it before it acts instead of after.

Look at the pattern as a whole. On Houston, on HB 381 and on the university lease, the Assembly reacted after someone else had already decided. On data centers we still have the chance to do it the other way: get in front of the issue, set the borough’s terms before the applications arrive, and lead instead of follow.

Why a pause makes sense

A pause is not a ban. It is time to write the rules once, clearly, before the first permit lands on someone’s desk.

This is not a partisan idea. Democratic governor candidate Jonathan Kreiss-Tomkins has called for a statewide moratorium until the Legislature passes a regulatory framework. In Texas, Republican Gov. Greg Abbott halted approvals for new data centers seeking grid connection until regulators audit their power, water and tax breaks, and he had already directed that data centers pay for the grid upgrades that serve them. Anchorage did not pause at all; it simply wrote its data center zoning rules before anyone applied. Each approach starts from the same place: set the terms first.

RS 26-117 was about as modest as a pause gets. It covered only facilities over 20 megawatts. It asked the borough to study grid capacity and whether existing customers would end up paying for new generation and transmission, water use and groundwater, effects on nearby property values, effects on tax revenue and infrastructure, and how to keep costs from landing on existing residents and ratepayers. It even asked staff to close the loophole of splitting one big project into several smaller ones. And it allowed the study to conclude that new rules were not warranted at all. A conservative should have no trouble with that.

What needs protecting

Here is what I believe a Mat-Su data center ordinance has to guarantee. None of it requires new taxes or new agencies. It requires writing down the terms.

  • Power. A data center must bring its own power. That can be coal, a small modular reactor, or private money helping get hydro permitted and built. Grid upgrades and new generation are paid by the developer, never by Railbelt ratepayers. This is not theory. On the North Slope, Stak Energy has signed a 15-year gas supply deal with ExxonMobil for an off-grid power campus with no connection to the Railbelt at all.
  • Coal without carbon capture. If coal is the answer here, build it without carbon capture. EPA has repealed the 90 percent capture mandate for coal and found it was not adequately demonstrated or cost-effective. In Terra’s own 2024 design, the capture system ate about a quarter of the plant’s output. Drop it, and the same power can be delivered by a smaller plant burning roughly 25 percent less coal, with no 60-mile CO₂ pipeline under the Susitna. The main reason capture is still in the plan is a federal tax credit that can be sold for cash. Chasing that credit is not a sound business model, and the borough should not grease the wheels for it.
  • Water. Closed-loop or outside-air cooling as the default, metered limits on withdrawals, and baseline monitoring of neighbors’ wells before construction starts. This is not a hypothetical worry. In its decision on the Houston land, DNR noted that wells in the area, including the City of Houston’s, produce about five gallons per minute, and the Little Susitna River drops to about 50 cubic feet per second in winter.
  • Noise. Decibel limits measured at the property line, day and night, plus berms, tree buffers and daytime-only generator testing.
  • Heat. Exhaust modeling filed with the application, minimum stack heights to carry heat up and away, and setbacks from homes.
  • Roads. Anyone who damages borough roads hauling equipment pays to fix them, bonded up front. We already learned that lesson with the breakup truck ordinance.
  • Public money. No tax abatements, no free land and no partnerships with a single company, unless there is a defined national security need.

The fear I hear most often is that these buildings will be used to spy on us. That concern deserves a straight answer. A data center is a building that rents out computing power. The privacy risk comes from what data is collected and who can get to it, not from where the servers sit. The borough cannot solve that alone, but it can do its part. It can bar borough departments from buying residents’ personal data from brokers without a warrant. It can require public disclosure of any agreement giving a government agency access to data at a permitted facility. And it can remind everyone that Alaska’s Constitution includes an explicit right to privacy in Article I, Section 22, stronger than the federal baseline.

Ask, answer, and put it on the record

Today, when residents raise concerns about data centers, the answer is usually silence. The pause should change that. Here is a simple process the Assembly could adopt:

  1. Invite questions. Open a question portal, with paper forms at libraries and community councils, for the length of the pause. Log and number every question.
  2. Bring in people who know the work. Hold sessions in each affected community that pair borough staff with residents and tradespeople who know the work: utility engineers, electricians and line workers, well drillers, acoustics engineers, the assessor, and someone who has run a data center. A neighbor who works the trade is more convincing than any official.
  3. Answer each person directly. Reply to every question in writing, within a set number of days, with the source behind each answer.
  4. Put it on the record. At each regular Assembly meeting, read a summary of the questions and answers into the record and attach the full log to the minutes. Once it is in the minutes, it is official, and anyone can hold the borough to it.
  5. Admit what is not known. Where the honest answer is “we do not know yet” or “that concern is valid,” say so, and show what rule in the ordinance will address it. One honest answer builds more trust than ten confident ones that turn out wrong.
  6. Publish it. Post the whole log on the borough website, searchable by topic.

This is not about winning anyone over. It is about giving people real answers and letting them decide for themselves.

What a data center could pay, and where the money should go

I am not going to sell this on jobs. A data center takes a lot of people to build and only a handful to run. The honest benefit is tax revenue that spreads the load off homeowners.

The Mat-Su’s areawide property tax rate for this year is 7.955 mills, a little under $8 for every $1,000 of assessed value. If a facility’s taxable building and site were assessed at $1 billion, it would pay roughly $8 million a year, about 6 percent of what the areawide tax raises today. These are illustrations, not forecasts. The borough assessor should publish real estimates during the pause.

There is a catch most people do not know about. Borough code exempts nearly all business personal property, and in a data center the servers and computing equipment are usually the biggest part of the investment. Under current rules, the borough would tax the building but not what is inside it.

Taxing that equipment is standard where data centers cluster. Loudoun County, Virginia, the largest data center market in the world, taxes data center computer equipment as business property. Data centers there produce nearly half of the county’s property tax revenue, and the county has used that money to cut residents’ vehicle taxes and eliminate a fee. The Mat-Su exemption is in borough code, so the Assembly could narrow it for the largest facilities, say those over 20 megawatts, without touching any other business. That deserves a serious look during the pause.

Ownership matters, too. Under state law, AIDEA’s property is exempt from all local taxes. If AIDEA or its new data company owns a data center or the land under it, the borough loses that tax base and is left negotiating for whatever payment AIDEA offers in its place. If AIDEA sells to a private owner, the new owner pays like everyone else. The same goes for a power plant, which would likely be the largest taxable asset in the borough. If AIDEA has any role in a plant, a payment close to the full tax value should be in writing before any money moves, the way it was done at the Red Dog mine.

And the new money should go where it will do the most good: reducing property taxes on primary residences. Under current state law the borough can lower the areawide rate for everyone or expand the residential exemption for homeowners. I have argued for a classified tax system that would let the borough set separate rates for homes, businesses, industry and data centers. That takes a change in state law, and data centers are one more reason to pursue it.

What the state should and should not do

AIDEA has a legitimate role in building infrastructure that many users share and pay for: roads, ports and power plants with multiple buyers, contracts signed before public money moves, and a private operator carrying the risk. That is how Red Dog works. AIDEA owns the road and port, the mining company pays a toll, and AIDEA never owned the mine.

A data center is different. It has one tenant, its equipment is replaced every few years, and its value rides on one of the most volatile markets in the economy. AIDEA should not own it, invest in it, finance it, market it or sell stakes in it.

That is exactly what the governor’s new plan does. AIDEA’s board authorized $20 million in January to start the Alaska Data Corporation, a subsidiary built to put state capital into data centers alongside private developers. Its partner platform, InvestNorth, would record ownership on a blockchain and eventually sell stakes to Alaskans. No terms have been published. Supporters call it a modern version of the Permanent Fund Dividend. It is the opposite. The PFD pays out from a resource the state already owns, and no Alaskan puts a dime at risk. This plan asks Alaskans to buy into a speculative asset on terms nobody has seen.

Supporters also say blockchain makes it transparent. A ledger shows who owns a token after a deal is signed. It does not show how the deal was chosen, what it was priced at, what the platform company is paid, or who takes the first loss. The Alaska Data Corporation’s president was the governor’s deputy chief of staff, and the platform company was founded in 2024. Before another dollar moves, AIDEA should publish how much of the $20 million has been spent, with whom, and on what terms.

The Assembly should pass a resolution opposing the Alaska Data Corporation and InvestNorth, stating that data centers in the borough should be privately owned, privately financed and fully taxable, and that no state data company should site anything here without borough approval and a public hearing. That would be the Assembly standing up for the borough before the state acts, for once, instead of after.

What developers and AIDEA will say

Expect pushback from the industry and from AIDEA. Here are the arguments I expect to hear, and how I would answer them.

  • “A pause will send investment somewhere else.” In practice, a six-month pause costs a serious developer almost nothing. The Railbelt does not have the power capacity to serve a hyperscale facility today, so any real project has to plan and build its own generation, which takes years. The fiber and terrestrial links between Alaska and the Lower 48 also cannot meet the bandwidth, route diversity and latency that most hyperscale customers require, and planning new routes alone takes about a year. The pause fits inside the timeline a developer already faces.
  • “Bring-your-own-power kills the economics.” Bringing your own power is becoming the industry standard because most places no longer have power to spare. Stak Energy’s off-grid campus on the North Slope is built that way, and Texas now expects data centers to pay for the grid upgrades they need.
  • “Taxing servers makes the Mat-Su uncompetitive.” The proposal is a reduced tax on computing equipment in the largest facilities, done through a partial exemption the borough already has the authority to set. Developers come to Alaska for the cooling savings. Cold air that cuts their power bill is worth far more than any tax break we could offer.
  • “Rules on noise, water and heat are too prescriptive.” They are engineering guidelines, written as performance standards: decibels at the property line, limits on water withdrawal, stack heights and setbacks. How a developer meets them is up to the developer.
  • “A public question process gives opponents a veto.” It is the opposite. Answering questions in public is how we put fears to rest with facts. A project that cannot stand up to residents’ questions should not be built here anyway.
  • “Other states offer incentives.” Our incentive is the climate. Developers want to come here because the cold saves them money. We should not pay them to do what is already in their interest.
  • AIDEA: “The Legislature created us to do development finance.” Authority is not the same as good judgment. AIDEA’s own Red Dog model draws the line: AIDEA owns the road and the port, and the mining company owns the mine. In that comparison, a data center is the mine.
  • AIDEA: “We will follow borough rules.” DNR’s own decision on the Houston land says development there must comply with borough permitting and zoning. The same decision notes the area is not zoned. Borough authority only protects us if the borough has written rules to apply, which is one more reason the ordinance has to be in place before the pause ends. The decision also lists AIDEA’s tax exemption and its plans to finance, own, operate and lease projects and to contribute land as an equity stake, so the tax question on that land is very real.

What we should expect from the Assembly

Data centers can be good for the Mat-Su, but only on terms we set. During the pause, residents can hold the Assembly to four things:

  • Answer every question on the record.
  • Publish the tax numbers before any permit is issued.
  • Dedicate the new revenue to relief on primary residences.
  • Adopt a data center ordinance before the pause ends.

The Assembly and staff work for us. If they listen first, answer honestly and write the plan with residents instead of around them, I believe a lot of the opposition will turn into conditional support. If they skip that step, they will get the same result they got in Houston: a fight nobody needed, and a decision made somewhere else.

For once, the Mat-Su does not have to react. We can lead.

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