[House Hearing, 119 Congress] [From the U.S. Government Publishing Office] EMPOWERING RURAL AMERICA THROUGH INVESTMENT IN INNOVATION ======================================================================= HEARING BEFORE THE SUBCOMMITTEE ON RURAL DEVELOPMENT, ENERGY, AND SUPPLY CHAINS OF THE COMMITTEE ON SMALL BUSINESS UNITED STATES HOUSE OF REPRESENTATIVES ONE HUNDRED NINETEENTH CONGRESS SECOND SESSION __________ HEARING HELD JANUARY 21, 2026 __________ [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Small Business Committee Document Number 119-028 Available via the GPO Website: www.govinfo.gov __________ U.S. GOVERNMENT PUBLISHING OFFICE 62-603 WASHINGTON : 2026 ----------------------------------------------------------------------------------- HOUSE COMMITTEE ON SMALL BUSINESS ROGER WILLIAMS, Texas, Chairman PETE STAUBER, Minnesota DAN MEUSER, Pennsylvania BETH VAN DUYNE, Texas JAKE ELLZEY, Texas MARK ALFORD, Missouri NICK LALOTA, New York BRAD FINSTAD, Minnesota TONY WIED, Wisconsin ROB BRESNAHAN, Pennsylvania BRIAN JACK, Georgia TROY DOWNING, Montana KIMBERLYN KING-HINDS, Northern Marina Islands DEREK SCHMIDT, Kansas JIMMY PATRONIS, Florida NYDIA VELAZQUEZ, New York, Ranking Member MORGAN MCGARVEY, Kentucky HILLARY SCHOLTEN, Michigan LAMONICA MCIVER, New Jersey GIL CISNEROS, California KELLY MORRISON, Minnesota GEORGE LATIMER, New York DEREK TRAN, California LATEEFAH SIMON, California JOHNNY OLSZEWSKI, Maryland HERB CONAWAY, New Jersey MAGGIE GOODLANDER, New Hampshire Lauren Holmes, Majority Staff Director Melissa Jung, Minority Staff Director C O N T E N T S OPENING STATEMENTS Page Hon. Jake Ellzey................................................. 1 Hon. Kelly Morrison.............................................. 2 WITNESSES Mr. Chris Crosby, Chief Executive Officer, Compass Datacenters, Dallas, TX..................................................... 6 Mr. Kirk Offel, Founder and Chief Executive Officer, Overwatch Mission Critical, Austin, TX................................... 8 Dr. Nicol Turner Lee, Senior Fellow, Governance Studies and Director, Center for Technology Innovation, Brookings Institution, Washington, DC.................................... 10 APPENDIX Prepared Statements: Mr. Chris Crosby, Chief Executive Officer, Compass Datacenters, Dallas, TX.................................... 31 Mr. Kirk Offel, Founder and Chief Executive Officer, Overwatch Mission Critical, Austin, TX..................... 36 Dr. Nicol Turner Lee, Senior Fellow, Governance Studies and Director, Center for Technology Innovation, Brookings Institution, Washington, DC................................ 41 Questions and Answers for the Record: Questions from Hon. Morrison to Dr. Nicol Turner Lee with attachments................................................ 61 Additional Material for the Record: Fiber Broadband Association (FBA) Letter..................... 124 Lazard LCOE (Levelized Cost of Energy) Letter................ 127 NextEra Energy Letter........................................ 175 Loudoun County Letter........................................ 206 Food & Water Watch Letter.................................... 210 Mike Turner Letter #1........................................ 217 Mike Turner Letter #2........................................ 258 American Sustainable Business Network (ASBN) Letter.......... 259 EMPOWERING RURAL AMERICA THROUGH INVESTMENT IN INNOVATION ---------- WEDNESDAY, JANUARY 21, 2026 House of Representatives, Committee on Small Business, Subcommittee on Rural Development, Energy, and Supply Chains, Washington, DC. The Subcommittee met, pursuant to call, at 10:03 a.m., in Room 2360, Rayburn House Office Building, Hon. Jake Ellzey [chairman of the Subcommittee] presiding. Present: Representatives Ellzey, Finstad, Wied, Schmidt, Williams, Morrison, Scholten, Olszewski, and Goodlander. Chairman ELLZEY. Good morning. Welcome to the Committee on Small Business, Subcommittee on Rural Development, Energy, and Supply Chains. I would like to recognize Chairman Roger Williams for the prayer and the pledge. Mr. WILLIAMS. Please stand. I pledge allegiance to the Flag of the United States of America and to the Republic for which it stands, one nation, under God, indivisible, with liberty and justice for all. Would you please bow your head? Heavenly Father, God of all people, thank you for allowing us to be here today to share wonderful ideas for the future of this great country and the people that care about it so much. We also care about you, and that is why we strive every day to walk in your light and not in your shadow--in our shadow. In your name we pray. Amen. Chairman ELLZEY. Good morning. I will now call the Subcommittee on Rural Development, Energy, and Supply Chains to order. Without objection, the Chair is authorized to declare a recess of the Committee at any time. I now recognize myself for my opening statement. So welcome to today's hearing, ``Empowering Rural America Through Investment in Innovation.'' I want to say thanks to our witnesses for showing up today, traveling here at their own expense to spend some time with us, and your expertise. So, as the demand for AI accelerates, America's digital infrastructure is rapidly expanding into rural communities. This infrastructure consists of data centers being built far beyond traditional tech hubs, with many investments being made in rural areas, including in my district, in Ellis County. Our rural communities and small businesses are at the center of America's AI-driven growth. Texas is leading the charge in data-center development because of our pro-growth, pro-energy, and low-regulatory environment that has minimized the hindrance of red tape. We have placed a strong focus on developing the workforce for high-paying, new-collar jobs, and data companies have recognized those benefits. The economic ripple effect from data centers can reinvigorate rural communities like mine by creating high- paying trade careers and supporting long-term economic activity in rural small businesses. For every direct job created at a data center, up to seven jobs are supported in the surrounding community. Small businesses are supplying, maintaining, and supporting these facilities. From construction to infrastructure upgrades, data centers open doors for main street entrepreneurs and trade workers to be a part of the next generation of technical advances. Meeting the workforce needs of data centers across the country will take a whole-of-community approach to attract and train the skilled workers needed to succeed. Many of our military veterans who return to civilian life already possess the skills required for this industry. As a vet myself, I was proud to co-lead the bill that made the Boots to Business training program permanent, alongside Chairman Williams and Representatives McGarvey and Schneider. Through this effort, our returning service members can be trained to fully utilize their military skills in entrepreneurship opportunities, including those offered by the data-center industry. This bill was passed in the fiscal year 2025 NDAA and will continue to be a vital tool in meeting our workforce needs. Building out this workforce is a crucial step in securing America's energy dominance and supporting our national security. At the same time, industry leaders, local partners, and educational institutions are already stepping up with investments in advanced energy solutions that not only strengthen local infrastructure but keep us competitive with the AI race with China. I look forward to hearing from today's witnesses about how data centers can support local communities, strengthen the small-business ecosystem, and help build a new middle class in rural areas across the country. And, with that, I now recognize the Ranking Member, Representative Morrison, for her opening remarks. Ms. MORRISON. Thank you, Mr. Chairman. And thank you to the witnesses for being here. Emerging technologies like AI and blockchains are redefining how people around the world live and work. These technologies are run on computers, but most computers don't have the processing power or compute needed to run them quickly enough for mainstream use. For advanced AI models to be developed or operated at a suitable speed, they must be hosted by a massive group of computers that collectively pool their compute, found only in data centers. The growth of AI, both in use and in development, has spurred an explosion in data-center construction, which has caused a huge rise in demand for the electricity they need to function as well as for water used by some data centers' liquid cooling systems. New data centers can bring benefits, like tax revenue and investment, to rural areas that sorely need them. But, as we point out in most hearings, it is important to think about the whole picture--the benefits, the costs, who receives those benefits, and who bears those costs. The recent data-center boom presents numerous challenges. First, data centers are causing residential customers' electric bills to rise by increasing electricity demand and straining the electric grid. Second, data centers draw on supplies of clean, drinkable freshwater, stressing local water systems, sometimes in areas with already-limited water availability and infrastructure. Third, computer-part-makers, responding to AI developers' vast capital, are shifting production from consumer parts to AI products, making computers and smartphones more expensive. And last but not least, new data centers are directly and indirectly increasing pollution and carbon emissions, posing significant environmental health risks. With all that said, these outcomes aren't foregone conclusions. It is possible to build more data centers in a way that doesn't hamper innovation but also benefits the communities that surround them. We should be thoughtful and purposeful about the way we are building data centers. During the previous administration, Democratic congressional majorities enacted landmark laws to lower costs for consumers and small businesses. The Inflation Reduction Act created tax incentives to make energy cheaper and cleaner. The Bipartisan Infrastructure Law invested hundreds of billions of dollars in our clean water and broadband internet. And the CHIPS Act funds and incentivizes domestic computer manufacturing, stabilizing and lowering computer prices. H.R. 1 slashed those IRA tax credits, and the Trump administration is doing everything in its power to halt the permitting of clean-energy products--the cheapest and fastest forms of energy to build. He has also diverted billions in broadband funding to Elon Musk's company Starlink for unreliable satellite connections in rural areas. And he proposed cutting rural water and wastewater grants by $154 million this year and repealing the CHIPS Act. All together, President Trump is enabling data centers to make America's affordability crisis far worse. Still, we can salvage the situation. We can follow through on the farsighted investments made by the previous administration and put in place commonsense guardrails that shield American consumers and small businesses from the excesses of the data-center boom. I hope to have a clear-eyed and productive discussion about how communities, especially rural ones, can maximize the benefits and minimize the costs of the data-center projects popping up across the nation. Affordability for Americans depends on it. With that, Mr. Chairman, I request unanimous consent to insert into the record the written statement of the Loudoun County Virginia Board of Supervisors Vice Chair, Mike Turner. And I thank the witnesses for being here. And I yield back. Chairman ELLZEY. Without objection. And I will now introduce our witnesses--hmm? Is she here? I am going to pay for this later at the baseball field. Thank you. I now recognize the Chairman of the full Committee, Chairman Williams, for an opening statement. Mr. WILLIAMS. That is a good recovery, Chairman. Thank you. Chairman ELLZEY. Thank you, sir. Mr. WILLIAMS. Thank you, Chairman Ellzey, for holding this very timely hearing. And thank you to all the witnesses for being here today and joining us with this discussion on the impact of the data- center industry on rural communities and small businesses. The data-center industry is growing rapidly, and Texas is right in the center of the action. We are witnessing the economic and industrial revival, with these businesses driving high demand for tradeskill workers, and technical and trades jobs will be the backbone of the renewed American middle class. As Chairman Ellzey has explained, veterans come ready with many high-demand skills that the data-center industry needs. By making the SBA's Boots to Business program permanent last Congress, Chairman Ellzey, myself, and other colleagues on both sides of the aisle are arming our veterans with the entrepreneurial skills and knowledge necessary to step into critical roles and leadership, not only in the data-center industry but across any industry. One of my highest priorities is to encourage more young people to pursue a career in technical education, also known as CTE. And in pursuit of that goal, I have introduced two bipartisan bills in Congress--H.R. 1641, the Student Debt Alternative and CTE Awareness Act; and H.R. 1642, the Connecting Small Businesses with Career and Technical Education Graduates Act of 2025. These bills promote CTE programs and help graduates of these programs to find jobs with small businesses. Now, career and technical education is critical to meeting the growing demand for tradeskills professionals and building the future of the American workforce. Ambitious and entrepreneurial electricians, HVAC technicians, and plumbers are finding an industry overflowing with opportunity in rural America. Data centers cannot operate without small businesses to build and maintain them. And, of course, every opportunity comes with certain challenges. We look forward to discussing them with our witnesses today, as we continue exploring the impact of data centers across our communities. I want to thank again our witnesses again for joining us today and for your investment in the rural communities of Texas. With that, I yield back. Chairman ELLZEY. Thank you, Mr. Chairman. Please, no wind sprints come March. And I would like to add before we delve into our witnesses that, as we talk about our veterans--thanks for the kind words, Mr. Chairman--that our veterans have the discipline to be trained to do anything, and they have the drive to do everything. So they are going to be an essential part of this. Our first witness today is Mr. Chris Crosby, the chief executive officer of Compass Datacenters in Dallas, Texas. Mr. Crosby founded the company in 2011 after years of working at the intersection of technology and real estate development, focusing on delivering scalable, customizable, and sustainable data-center infrastructure. Since founding Compass, Mr. Crosby has led the company's growth, from completing its first 1.2-megawatt data center in 2012 to developing campus-scale facilities serving hyperscale customers worldwide. Under his leadership, Compass has earned recognition as one of the fastest-growing companies in the country and has become a leader in sustainability and long-term infrastructure development within the data-center industry. Mr. Crosby holds a Bachelor of Science in computer science from UTA--UT Austin, for those not in the Sixth District. Thank you for joining us. Our next witness is Mr. Kirk Offel. Mr. Offel is founder and chief executive officer of Overwatch Mission Critical, a strategic data-center consulting firm based in Austin, Texas. Mr. Offel has had two decades of industry experience, having worked in executive roles with Fortune 1,000 companies and major data-center providers worldwide. His career includes work with Medtronic, Eaton Corporation, Hewlett-Packard's Technology Services Consulting practice, and others. In addition to his executive pursuits, Mr. Offel is the founder of the Data Center Austin Conference and the host of the ``Data Center Revolution Podcast.'' He is a U.S. Navy veteran, having served aboard a nuclear fast-attack submarine, and was recognized as a Member of the class of 2010 ``Military Top 40 Under 40.'' And, if I might add, if you are on a fast-attack submarine, you have gone to Nuclear Power School and you are smarter than everybody else in the room. And, clearly, because of that hair, you are a submariner, not a pilot. I am looking forward to hearing your testimony. I now recognize Ranking Member Morrison to briefly introduce our last witness. Ms. MORRISON. Thank you, Mr. Chairman. Dr. Nicol Turner Lee is a senior fellow in governance studies at the Brookings Institution and the director of its Center for Technology Innovation. She is an accomplished tech-policy expert, focusing on equitable access to and impacts of technology, with three decades of experience in research and advocacy. Her recent work includes a 2024 book titled ``Digitally Invisible: How the Internet is Creating the New Underclass'' and a chapter in ``The Oxford Handbook of AI Governance.'' Before her time at Brookings, Dr. Turner Lee was the chief research and policy officer at the Multicultural Media, Telecom, and Internet Council and the director of the Media and Technology Institute at the Joint Center for Political and Economic Studies. She has also served on federal advisory commissions, such as the Commodity Futures Trading Commission's Technology Advisory Committee, the Department of Homeland Security's AI Safety Board, and the Federal Communications Commission's Communications Equity and Diversity Council. Dr. Turner Lee holds a B.A. from Colgate University and an M.A. and Ph.D. from Northwestern University. She might compete on the smart front here. Welcome, Dr. Turner Lee. Chairman ELLZEY. Thank you all for being here. Before recognizing the witnesses, I want to remind you that you have 5 minutes. If you go over 5 minutes, I start tapping, and then I start screaming after that. I now recognize Mr. Crosby for his 5-minute opening remarks. STATEMENTS OF CHRIS CROSBY, CHIEF EXECUTIVE OFFICER, COMPASS DATACENTERS; KIRK OFFEL, FOUNDER AND CHIEF EXECUTIVE OFFICER, OVERWATCH MISSION CRITICAL; AND NICOL TURNER LEE, PH.D., SENIOR FELLOW IN GOVERNANCE STUDIES AND DIRECTOR OF THE CENTER FOR TECHNOLOGY INNOVATION, BROOKINGS INSTITUTION STATEMENT OF CHRIS CROSBY Mr. CROSBY. Thank you, Chairman Ellzey. Thank you, Ranking Member Morrison and Chairman Williams and distinguished Members of the Subcommittee. Thank you for inviting me today to testify on how investments in digital infrastructure is revitalizing rural America. My name is Chris Crosby, and I am the founder and CEO of Compass Datacenters. After 25 years of working at the intersection of technology and real estate development, I founded Compass in 2011. We design, build, and operate the customizable, scalable, and sustainable foundations of the global hyperscale market. It is vital to distinguish our work from crypto farms or transient AI factories. We build hyperscale campuses, enduring civic infrastructure that supports the banking, cloud- computing, AI, and social connectivity services Americans use every day. We are in the middle of the most significant economic transformation since electrification. Data centers are the 21st-century equivalent of the railroads coming. They are now moving beyond traditional tech corridors into rural communities. They are bringing substantial capital, jobs, and infrastructure investment. There is an outdated myth that data centers only provide temporary construction jobs. In reality, our campuses are 100- year assets. They are part of the communities that they sit in, and they are in a state of constant evolution. In Red Oak, Texas, the Chairman's district, our investment has triggered a significant butterfly effect. We provide stable work for roughly 1,500 construction workers during the decade- long build-out and anticipate over 400 permanent, high-paying jobs--operations, maintenance careers, technology careers--on the campus. We anchored a new industrial hub by partnering with Schneider Electric to build a 105,000-square-foot manufacturing facility on our campus, in the middle of our campus, creating an additional 350 jobs on the campus. Before our 2021 investment in Red Oak, new sales tax business permits in the municipality grew at a meager 12 percent annually, which for north Texas is not doing very good. Since we began construction, that growth rate has surged to 43 percent, compounding. Data-center campuses function as sustained economic engines, creating a butterfly effect of new restaurants, retail, housing, and other developments within the communities. And if you have driven through Red Oak, Texas, you see the bridges and the construction, the new schools, and everything else that is coming along with it. On energy, large data centers serve as anchor tenants for the grid. Our national grid averages just about 50-percent utilization throughout the year, so by utilizing this underused capacity, we help take those fixed costs across more electricity sales and actually do put pressure down on the rates for families and not small--and small businesses to pay less. Let me be very clear on this point: Data centers pay more so that families and small businesses can pay less. There are scenarios where we are regulated to not be able to do that, but that is not for want. At Compass, we go even further with our ``co-serve'' model. To quote John Knight, the assistant director of economic development in Red Oak, Texas, ``Compass builds redundancy into our grid, supports our infrastructure. I love what data centers are doing to improve our community's qualify of life,'' end quote. We fund transmission lines, substations, and interconnects through up-front contributions in aid of construction, also known as CIAC payments, strengthening the local grid for everybody. However, outdated regulations still limit our ability to contribute even more. We need emissions standards that distinguish the cleaner hydrotreated vegetable oil, or HVO, that we use--we pay more for than diesel--from traditional diesel so that we can stabilize the grid during emergencies without penalty. We don't want black soot going in the air for our communities. We need the EPA to formally classify mandatory grid curtailments as emergencies, allowing us to support the grid, be grid resources during extreme weather events like this coming week, without risking compliance violations. And we need regulatory flexibility to allow more proactive private funding for long-term grid infrastructure--that is, private funding for grid infrastructure. Compass is built to last, which is why we invest deeply in our people and our communities. We partner with Texas State Technical College to create a scholarship pathway into high- tech, high-paying roles that don't require 4-year degrees. The program is now scaling nationally. We are in our second cohort. We also work with veteran-focused organizations like Overwatch and Salute to place skilled military talent in data- center careers close to home. Environmentally, we preserve local resources by mandating water-free cooling since 2012 to protect our agricultural water supplies. In conclusion, Compass does not seek a free ride. We come with a multigenerational commitment to prosperity in each of our communities, ensuring that the AI revolution empowers every corner of our nation. I thank the Committee for the opportunity to testify and for your leadership on this important topic, and I look forward to answering your questions. Chairman ELLZEY. Thank you, Chris. Now I recognize Mr. Offel for his 5-minute opening remarks. STATEMENT OF KIRK OFFEL Mr. OFFEL. Good morning, Mr. Chairman. Thank you. Ranking Member, Members of the Committee, thank you for the opportunity to testify today. As an industry, we did not communicate early enough or often enough about our data-center plans, and that created avoidable concerns. We didn't clearly explain what we were building, why it mattered, or how communities would benefit, and we relied on the trust we hadn't yet earned. We are fixing it by increasing transparency, tightening our outreach, and making sure every community and stakeholder understands the mission, the safeguards, and the benefits. We know trust is earned, and you will see that reflected in how we engage moving forward. My name is Kirk Offel. I am the CEO of Overwatch, and I am proud to be a Service-Disabled, Veterans-Owned Small Business (SDVOSB). Before I ever set foot in a data center, I spent five (5) years in the U.S. Navy, serving aboard the nuclear fast- attack submarine USS Memphis. That experience taught me something simple: You don't accomplish big missions with big slogans; you accomplish them with small, highly capable teams who know how to execute. And that is exactly what is happening in the AI boom today. Let me be blunt: Small businesses are the backbone of this entire industry. I am saying the AI boom does not happen without us, period. Today, more than 75 percent of the whole AI infrastructure ecosystem is driven by small businesses. We are the ones building the AI factories. We are the ones pulling fiber, erecting steel, trenching conduit, fabricating components, hauling equipment, running logistics, and delivering professional services that keep projects moving. As our grid gets pushed harder than ever before, it won't be a big company flying in from out of State fixing that. It will be a local electrician, local line crews, local engineering firms, and local contractors--small businesses that actually understand the communities that they serve. We are going to see new small businesses pop up in manufacturing--equipment rental, transportation, environmental services, permitting, legal, security, cleaning, maintenance, you name it. And all the indirect jobs--housing, food, retail, childcare--all grow because of this work. And we have seen this before. Every major leap in American infrastructure has had the same outcome: Small businesses become the biggest winners. They grew with the railroad era. They scaled during the electrification of America. They expanded through the construction of the interstate system. And they absolutely exploded during the automobile revolution. Each of those moments didn't just change the country; they created millions of small businesses that reshaped the American workforce. And, today, we are living through what I believe is the fifth industrial revolution--a revolution powered by data, intelligence, and people who build and sustain the infrastructure behind it. AI factories are no different. They are simply the 21st-century version of those earlier transformations, and they will become the next great engine of American small-business growth. Let me put some numbers behind that. For every $100 billion we invest in building digital infrastructure, we get $800 million in local tax revenue; 500,000 new jobs; $40 billion in labor income; and that is a $140 billion boost to the U.S. GDP. Now I want to address the concerns we all hear: energy, water, environmental impact, and job creation--all valid concerns. They deserve our attention, and they are beginning to get monitored very closely. But the answer is not to hit the brakes. The answer is the same answer we used when we built the railroads, electricity, cars, and the roads: We govern it, we guide it, and we build it more responsibly. People forget this, but the first cars were horribly inefficient, wildly polluting, incredibly dangerous, and brutal on city infrastructure. So, what did we do? We built smarter, we built safer, we set standards, and we improved efficiency. Progress doesn't happen because we avoid the challenge; it happens because we take it head-on. That is the American way. Today, we have 5,400 data centers in the U.S. That is the most in the world. Hyperscale capacity has doubled in the last 5 years, and we are staring down the barrel of $5 trillion in construction over the next 5 years. The industry is on track to triple by the end of the decade. And for the first time ever, we have the ability to retrofit the past, to take older facilities and make them just as efficient as the new data centers we build today. AI factories are the most transformational infrastructure America has ever attempted to build. Henry Ford enabled the movement of people and goods. AI factories enable the movement of data, intelligence, and services. And once again they are going to create millions of small-business opportunities, just like cars did, just like the railroads did, just like electricity did. But here is the part that matters the most, and this is where my Navy background speaks up: If we don't build this infrastructure here, if we don't scale it and if we don't support it with American labor and American small businesses, those jobs and that technology are going overseas. And they will go to countries who have worse environmental standards, less transparency, and strategic interests directly opposing our own. This is not just an economic issue; this is a national security issue. So, to the Committee, I will leave you with a piece of history. Energy has never been a reason for us to stop; it is a reason for America to lead. Growth isn't a threat; it is an opportunity. And small businesses, they are not just part of the story; we are the story. Empower us, and we will build the next generation of American infrastructure. Fail to empower small businesses, and we will fall behind nations that would love nothing more than to take our place. Thank you, and I look forward to your questions. Chairman ELLZEY. Thank you, Kirk. Now I recognize Dr. Turner Lee for her 5-minute statement. STATEMENT OF NICOL TURNER LEE, PH.D. Ms. TURNER LEE. Chairman Ellzey, Ranking Member Morrison, and distinguished Members of the Subcommittee, thank you for the invitation to testify today. AI is changing the way we work, how we learn, get well, and interact online, as well as emboldening other transformative cases, like speeding up the development of scientific discoveries and better evaluating climate impacts. But not all consumers have full access to AI, especially those with limited internet access or who lack the digital skills to utilize it in their lives. Rural communities, especially small businesses and farms, have been historically left behind when it comes to technological innovation and can benefit from what AI offers. With vast topography, rural areas tend to have the land needed to support physical data centers. Technology can create avenues for economic development in rural areas that have experienced declines in population and farming assets as well as insufficient access to high-speed broadband. Data centers have gotten increased visibility as economic drivers, but this will only be the case if they are built in ways that are additive to the local community and bring limited harm to residents and local businesses. In my testimony, I want to discuss the increasing explosion of data centers but talk about how they require a national framework for resources, security, permitting, and community benefit. State and local leaders, business owners, employees, and residents should participate in planning and implementation together with technology companies, big or small. Communities must be actively involved at the onset of data- center development and have transparency to assess the impacts of electricity, water, noise and light pollution, jobs, land use, tax revenues--all of which I detail in my written statement. With the various types of facilities, including enterprise, hyperscale, co-location, and edge, technology companies are investing in larger facilities for greater computing power. More compute requires more space, equipment, electricity, and water, resulting in a set of unknown environmental hazards that we have yet to realize. Some tech companies are greatly benefiting from the explicit support of the President right now, whose favorable stance towards more data centers to compete with China has expedited permitting and bypassed environmental remediations as part of the tenets of the AI Action Plan. However, the current administration has also threatened to rescind federal funding to States if they stand in the way of AI deployments. And just in December, the White House issued an order making States ineligible for BEAD non-deployment funds if they threaten such. Threats to States through moratoriums and lawsuits are counterintuitive to the ultimate goal for having data centers in the first place, leaving communities without agency in conversations involving not just data centers but broadband in their community. More importantly, we must listen to communities. Data centers have been the central focus of some gubernatorial and state legislature campaigns during recent elections in New Jersey, in Virginia, and other places, where consumers saw rising electricity rates coincide with unprecedented demand for new data centers. A middle ground must be met to balance the needs of advanced technologies with the demands of residents who just seek clarity, buy-in, and oversight in these data centers that are being built in their backyard. Further, communities should not feel the drain of data centers on their natural and generated resources. And with the environmental impact still largely unknown, we need to make sure that the rollbacks that we made in the Biden-Harris administration in terms of clean and renewable energy sources do not have disproportional impacts in the future. What I will also say about job creation: Though we know that the rate of jobs is temporary and, in some cases, will not scale to the size of the data center itself, it is important for the rural workforce to be involved. Right now, rural workers are lacking in areas of trade as well as construction. These challenges offer opportunities for government agencies, businesses, and local governments to collaborate on solving those workforce shortages and rooting training in ways that those people stay in the community and become the pipeline for rural communities going forward. Data centers cannot be selective, as well, when it comes to who works within the facility itself. Small businesses should have the opportunity to bid on contracts for food services, security, and maintenance. And if these jobs are primarily remote, we need to ensure that broadband is available so that people who live in rural communities do not have to go to, as I found in my book, local hotels and 50 miles away to just access their jobs. There must be some foresight, my friends, about the long- term impact on surrounding communities, the environment, and overall resilience. This is especially important as fears over a potential AI bubble escalate and feed the possibility of stranded assets in communities that essentially have given the green light to data centers along with millions of dollars in tax incentives. Communities should be asking about the plans for stranded or deserted buildings, how they can be repurposed and better integrated into the community, or else we are going to find ourselves, like China, with a lot of idle buildings. I envelope my remarks around this idea that data centers should be responsibly and ethically designed and built, and I leave this Committee with my closing thoughts: Ensure early collaboration among all the utilities--energy, water, and telecom, and even real estate. Develop community benefit agreements that resolve and make major public concerns around data centers transparent. Focus on job creation. Consider smaller data centers when appropriate. They don't need to be big. Create safeguards for communities and allow communities the opportunity to say no when they want to say no, and they do not feel that they are involved. Thank you again to the Members of the Subcommittee, and I look forward to your questions. Chairman ELLZEY. Thank you, Doctor. We will now move to the Member questions under the 5-minute rule. I will recognize myself for 5 minutes. Chris, Texas has emerged as a leading State for data-center development because it has affordable land, it has plenty of energy, and it has an understandable and relatively easy regulatory climate. What else makes Texas attractive to data centers? Mr. CROSBY. The growable workforce that comes with it. You know, as we continue to bring new people into the data-center space, we call it the new-collar workforce. The ability to attract employment in Texas is fantastic. And when we launched our vocational school in conjunction with Texas State Technical College--I went through the first cohort. You know, immediately the first class is all hired. The second class is already pre-hired. That is going on right now. We just--we have a workforce where we have youth, we have new people coming in. And in these communities like Red Oak, the commitment and the partnership with the local community really helps with that front. You know, that can-do attitude in Texas has been fantastic. Chairman ELLZEY. Well, if it is predictable, does that reduce uncertainty for you long-term for these data centers and their success? Mr. CROSBY. That is a great question. We look at things as--we don't exit. There is a big difference if you build to exit versus build to last. You make a lot better decisions, just like if you are going to remodel your home and you build it to flip it--or, you remodel to flip it versus you remodel to stay in that home. And that is where a lot of great sustainability decisions get made. And we view ourselves as 100-year campuses. These facilities will have multiple refreshes over that timeframe, both from an IT/technology as well as from a mechanical and electrical plan, and they are going to be long-term parts of those communities. They are living, breathing, active machines in those communities. So it is that--when you have certainty and you know that you can have that, you can make the multibillion-dollar type of investments that we make and look at it in the 40-plus-year horizons that we look at it from an investment perspective. Chairman ELLZEY. And you mentioned John Knight. So you built this data center with the encouragement and the cooperation and the oversight of the local government, correct? Mr. CROSBY. That is correct. Chairman ELLZEY. So they are fully on board with everything you are doing. This didn't need to come from Congress; this didn't need to come from Austin. They did it themselves, and they know you are going to be an integral part of the community already, right? Mr. CROSBY. That is a huge part of our selection criteria. We want to go to the places where people are. I can't speak for all developers. There is Class A development, and there is not. But when you are doing the right thing, you want to put long-term--you don't want to have people picketing a site that you are planning to try to get somebody to stay in for 30 years. Who wants to go work in a community like that? We go to the places where they welcome the investment, they welcome the transformation of their communities. And, like I said, I think it is akin to having--you know, the railroad was probably pretty loud back in the 1800s, and, you know, the communities that passed on that, it didn't work out so well for them. Those that passed on the Federal Highway System, those that passed on the international airports in the 1970s, you know, it did not work out long-term for those communities. And data centers are that now. We are--AI is like electricity. We don't know all the applications that it is going to be used for. It is a foundational tool, and it is going to continue to create opportunities. Chairman ELLZEY. Speaking of opportunities, Kirk, tell me about how veterans meet the threshold for what you are looking for in these data centers. Mr. OFFEL. I appreciate the question, Mr. Chairman. You know, we talk about data centers because it is measured in mission-critical. Mission-critical means that you could quantify the downtime in dollars or death behind one (1) second of lost infrastructure. I would argue that everyone that has put on the uniform and took the oath has once entered into a mission-critical environment that isn't measured in downtime, but it is measured in their own mortality. The State of Texas and what Chris was saying and why it is such a robust State--the sky for the cloud is northern Virginia, but the home for AI will be Texas. It has more than 200 high-educational [https://ballotpedia.org/Higher-- education--in--Texas--1993-2016] platforms, 15 military bases, and 4 of the most populous cities in the United States, not to mention it has more natural resources than any other State in the Union, including Alaska and Montana. So, we have the best access to the biggest workforce. There is a massive amount of veterans coming out of the military that have been exposed to the most advanced weapons, machines, and technology ever built, and the military is best known for being one of the largest leadership incubators ever built. So, we are not only--this industry does not--it is not lacking genius or intelligence. It does lack leadership. It lacks courage. And veterans are trained and conditioned and pressure-tested in all three. So, I think that veterans have the highest likelihood--I have three kids that are in college right now, and I tell them that that college degree is about as useful as a taxi medallion in a few years. Because you could spend four (4) years in the military and find yourself with a higher demand of opportunity that has the highest overall total earning potential versus something that you could find today going to college. Chairman ELLZEY. Nailed it. Nailed it. Mr. OFFEL. Thank you. Chairman ELLZEY. Okay. I now recognize Dr. Morrison for 5 minutes of questions. Ms. MORRISON. Thank you, Mr. Chairman. Dr. Turner Lee, are data centers being constructed to meet current demand or anticipated demand? And if the tech bubble does pop, will these data centers still be necessary? Ms. TURNER LEE. Thank you for that question, Ranking Member. I do think that data centers are necessary. I mean, the current compute demand of AI is out of the box, right, in terms of everything that we are doing in everyday as well as what we are trying to do with future scientific discovery. I also think that it is still unclear whether we are going to be able to grow these functions in the future into the current data-center assets that we are building in the present. I think we need to have the type of assessments that are done to sort of have some predictability in the marketplace of how we are going to foresee that growth. But I also think that, you know, there are other types of data centers that can be built to accommodate what we are talking about with AI. Ms. MORRISON. Thank you for that. And what would happen to these data centers and the associated jobs if the tech bubble does pop? Ms. TURNER LEE. One of my fears and we have written about this at the Brookings Institution, myself and Darrell West, my colleague--is that we do need to have programs that leave workforce opportunities within rural communities after the life of the data center. So it is particularly important that we have programs that sustain themselves, where those carpenters and electricians and welders are receiving training as well as recertification, using AI, and they are able to bring that asset back into their communities post--the life of this one infrastructure asset. Ms. MORRISON. Thank you. The Environmental Protection Agency has announced that it will no longer consider the health benefits of reducing air pollution in regulations--it is still shocking to say those words--cutting human health protections in favor of the fossil- fuel industry. I am a physician by trade, and I am deeply concerned about the health impacts of air pollution. Given these rollbacks, how could air pollution from fossil fuels and backup diesel generators, spurred by data centers, affect public health in rural areas? Ms. TURNER LEE. I definitely think the use of the word ``public health'' is meaningful in this conversation, I think, given the community response to environmental concerns. With that being the case, as you have mentioned, the rollback on the $11 billion of Biden-Harris investment towards clean and renewable energies is a setback, and we want to make sure that we are not setting back the progress. Because I think most tech companies, including my colleagues here, want as much electricity as possible and want it to happen to every electron. With that being the case, when workers are sick in rural communities because of these environmental impacts, small businesses suffer. When young people are sick due to asthma and other related environmental illnesses, they don't go to school. And so, we want to make sure that we are not having a bigger impact, I think, on the community, given the fact that we know very little about the environmental impacts. Ms. MORRISON. Thank you for that. How much electricity and water does the smallest hyperscale data center consume? Ms. TURNER LEE. Well, I will say this because I am not a scientist by trade; I am a sociologist. But we do know hyperscalers exceed and my colleagues can correct me if I am wrong about 100 megawatts, in terms of electricity. We also have to consider the offsite electricity used. Some tech companies are being responsible--we have seen that with Microsoft in terms of trying to figure out ways to build substations or take advantage of other electricity outlets. But, again, it is not just the building where the electricity is being consumed; it could be other buildings across the community that have to power and generate the same amount of power generate and consume the same amount of energy. Ms. MORRISON. And what about water? How much water is used? Ms. TURNER LEE. Yeah, the water issue is tricky as well. Based on the data center's size, we still see continuous water flow. Again, given the fact that there have been advancements in science when it comes to closed loop systems or using recycled water, I am excited about these opportunities. Again, water consumption is critical. Data centers must be cooled. And if they are not cooled, it takes the whole investment and throws it out in the wayside. Ms. MORRISON. I am glad you referenced that. So, depending on what cooling systems a data centers uses--because they use different ones--it may consume even more water or more electricity. Can you just briefly walk us through the tradeoffs of each type of cooling system? Ms. TURNER LEE. Well, we already know that we have an outdated and archaic national water and irrigation system, so that is a cause of concern. I also think what is interesting, too, is that we probably need to use, Ranking Member, more AI to help us to monitor the type of water that is going into these units, as well as ways in which we can save residential households money, you know, by the consumption. Communities adjacent to data centers are not getting the best of AI when it comes to these water and energy consumption measures. Ms. MORRISON. Thank you very much. And I yield back, Mr. Chair. Chairman ELLZEY. Thank you, Doctor. I now recognize Mr. Finstad from Minnesota for 5 minutes. Mr. FINSTAD. Thank you, Chairman Ellzey. Thanks for holding this important hearing today. And thank you to our witnesses for being here. As the Representative from the First District of Minnesota, a district that is founded on farming, healthcare, manufacturing, and small businesses which have helped sustain our rural areas, innovation is more than just a slogan to us; it is a way of life. With the rising demand for artificial intelligence, data centers are moving to rural areas, like the ones I represent in southern Minnesota, because of the availability of land, our climate--we are nice and cold, especially right now in Minnesota--and our access to power. For my district, data centers can be economic anchors in their regions, improving local supply chains and providing job opportunities for skilled tradespeople. At the same time, I want to acknowledge the concerns that I am hearing from my constituents regarding energy and water consumption, affordability, grid reliability, particularly from farmers and small-business owners and families. People want assurances that new, energy-intensive developments won't increase their utility bills or put a strain on local power and water systems. This hearing today is about ensuring that rural districts like mine are ready to take advantage of innovation while solving real problems like labor shortages and energy security. I look forward to the discussion today and learning more about ways we can empower rural America to lead on this next wave of innovation. So, with that, just a couple questions. Mr. Crosby, many of my constituents in southern Minnesota are concerned, have questions, maybe just don't know for sure, in regards to--I guess the question I hear is really, you know, the big, energy-intensive facilities like data centers, they are new to us. They may increase electricity prices or put stress on our local grids. We just heard a little bit about the water discussion. You have made the case that data centers can serve as an anchor tenant that reduces costs by spreading out fixed infrastructure costs and making up-front grid upgrade payments through contributions in aid of construction. So what is your company doing to ensure that data centers and development in rural areas does not increase energy costs for community members and small businesses? Mr. CROSBY. Thank you for your question. We do not go to these environments and look for the environments to pay us on these. So we build infrastructure. We have bought land and transferred it to the utility company for easements. We have bought--we pay for transmission. We have paid for switching stations, substations, and the like. That is our infrastructure that we are utilizing. Almost every single time, that involves additional infrastructure, such as in Red Oak, that other parts of the community can use that we pay for in order to bring it there-- so additional switches on a switching station, as a for- example. The other aspect to this is that we are trying to work, as well, with the regulatory bodies on trying to get data centers to become grid resources. So we are going through this cold snap right now. During Storm Uri, if data centers had been allowed by law, and not threatened with criminal penalties, to operate, 12 people would not have died during Storm Uri in the State of Texas. We can be stabilizing, distributed, islanded bodies. I will tell you, not 100 percent of my colleagues would say the same thing, but all of the Class A folks will absolutely look at that as, ``We can be the stabilizing factor for the grid.'' When we do that, we utilize infrastructure that is not being used right now, because it is, you know, 50-percent utilization when it is not during those peak timeframes. So you have a very small amount of hours per year where, if we could be utilized by grid operators, we could actually reduce down-costs for consumers and stabilize the grid, with it being our nickel. Mr. FINSTAD. Thank you for that. Mr. Offel, in your opening comments, I think you hit the nail on the head when you talked about, we probably haven't done a good enough job explaining what the opportunities are, what the real economics look like, what the risk and reward is in this new emerging industry. I like to say, around the halls in this town, you know, you start talking about data centers, AI, cryptocurrency, cybersecurity, and you get a glazed look over a lot of people's eyes. And these are policymakers that are hopefully in a position to educate themselves and make decisions on the very issue that we are talking about. So, if we have a problem here in the halls of Congress understanding some of the details of what we are trying to do in this next generation of opportunities, it is easy to assume that our neighbors are having that same issue of understanding. So maybe do you have some thoughts about how we as policymakers but how the industry is taking strides to make sure that we can talk to our neighbors about what does this mean in our backyard in regards to energy and water and the value that it adds to communities? Mr. OFFEL. Yeah. Thank you, sir. And I appreciate the question. I think this is a great opportunity for us to reshape the mindset and the way that we view this. So, I would ask you, as this Committee, to flip the binoculars around and open up the aperture and let us revisit this. I think this is something that people tend to be very scared of, because some of these things that they have been introduced to, like some of the technologies you talked about, are very faddish, where what we are talking about today is a data center which will have--it is a transformational infrastructure that will have a greater impact on humanity since we have seen in powered flight. This is something that is coming, and it is coming to stay. So, I think that if we can pause, I think that we can help people become more educated, and as we do that, they are going to become less fearful of what these data centers are. And we shouldn't see them as a building. Data centers aren't a building. Look at them as a career field and an opportunity to build back the middle class with high-paying jobs that don't require college degrees. Thank you for your question. Mr. FINSTAD. Yeah. Thank you. And, Mr. Chair, I yield back. Chairman ELLZEY. Thank you. I now recognize Ms. Goodlander from New Hampshire for 5 minutes. Ms. GOODLANDER. Thank you, Mr. Chairman, thank you, Ranking Member Morrison, for convening this important hearing. To our witnesses, thank you so much for being here today. We are on a really good streak with this Committee, because yesterday we passed two commonsense, bipartisan bills that go to the core issues around small businesses and artificial intelligence. And I couldn't agree more with my colleague from Minnesota; the Congress should be spending way--as much time as possible on this important issue. This is a transformational issue. We have never seen a revolution quite like this AI revolution. You know, when we talk about data centers and other innovation-driven investments in rural areas--and I represent the most beautiful district in the nation, a very rural district, where I hear every day about the pain people are feeling from high costs across the board--my priority is to make sure that these projects, that these innovations, aren't going to shift new burdens and new unbearable costs onto hardworking people who are already feeling a whole lot of pain right now. When we talk about energy costs and data centers, you know, I start from the premise that New Hampshire has some of the highest energy costs in our country. You know, this week, we are on track to have some of the coldest days of winter to date, and the people I represent cannot bear higher electricity bills, higher energy costs. I appreciate the testimony of our witnesses so far. Dr. Turner Lee, I wanted to ask you how you would advise Congress to think about the real ways in which data centers-- what actions we can take to make sure that no costs are shifted in an inappropriate way onto people who just cannot bear the pain of higher costs right now. Ms. TURNER LEE. Thank you very much for that, Representative. And I agree, affordability is a huge concern for many consumers that are resisting data centers to date. It is important for Congress to continue to have the dialogues that we are having around updating and modernizing the energy grid. Clearly, this is a conversation of 20, 25 years ago, and we are putting on top of an outdated energy grid more resources that I think will continue to strain those communities. It is important for public utility commissions to be at the table in these conversations because they set the rates for ratepayers. And it is also important for tech companies, who are coming in and draining some of those assets, to talk with PUCs, local governments, and consumers, to figure out ways in which they can set clear standards and rates for what electricity should look like. I mentioned earlier what Microsoft has done, for example, recently in their announcement about a community AI first, is to have set in certain rates that they pay, whether or not there is a variable increase or decrease in energy consumption. And we need to see more of that so that they are footing the bill as opposed to everyday Americans. Ms. GOODLANDER. Well, I want to ask also about water security and water costs. Because when we look at utility bills in New Hampshire, what we have seen in so many of the towns I represent, particularly in the southern part of my State, big, foreign corporations have come into New Hampshire, polluted our water, eliminated our wells. The costs of clean water have never been higher in our State. In your testimony, Dr. Turner Lee, you speak about water impacts as one that are--as impacts that aren't often fully understood until after a project has become underway. I hope you might be able to speak a little bit more about that, to your really important point that we need to be clear about the costs up front. What can and should Congress be doing to make sure that we have clarity and that we are putting all of our tools to use to make sure that these important developments don't actually undermine a core function of government, which is to make sure we have clean water for our citizens? Ms. TURNER LEE. I appreciate that question. And as I have said in my oral statement as well as written, it is important that Congress support States and allow them to be part of the negotiating table. You know, when we put barriers for State leaders to actively think about how these data centers are positioned in their community, we burden them, as well, and we remove them from the table. I think Congress should really move away from moratoriums and restrictions on the States to be actually involved. I think community benefit agreements might be another way for us to negotiate these speculative opportunities that are being promoted to communities. Lancaster, Pennsylvania, for example, just did a $20 million community benefits agreement that also includes quality-of-life factors--air quality, water consumption, other educational assets, jobs. We need to see Congress promote and support States actually engaging in those community benefit agreements, because I think it will get to the broader question that you are asking, Representative, which is, how do you just put everything in the bucket and make sure communities come out safe when this is all said and done? Ms. GOODLANDER. Well, thank you so much. I yield back, Mr. Chairman. Chairman ELLZEY. Thank you. I now recognize Chairman Williams for 5 minutes. Mr. WILLIAMS. Thank you, Chairman. Thanks again to the group for being here today. Mr. Crosby, the data-center boom has led to some growing pains, especially in meeting the workforce demand. However, the industry is already taking steps to address this challenge. Now, what steps have Compass Datacenters taken to build partnerships, including public-private partnerships, in career and technical education programs to address workforce needs? Mr. CROSBY. Thank you for your question. The Texas State Technical College and ourselves--we were looking for a partner to start a school. We scholarship the school. And then we brought in all of our partners, all of our suppliers, our customers, and our competitors that now all sponsor this program. It is called MEI. It is based in Red Oak. We are now also donating a facility, a little later this year, on the campus to allow the students to have a place to practice it, in which our--not only our client but also our equipment suppliers are donating equipment for them to be able to work on it. We plan to replicate this model in multiple markets where we have these levels of investment. These are, you know--when ``all-in''-type investments are north of $20 billion, you need a long-term workforce. This is something that we work very closely with--we have had great work with Ellis County, and Red Oak officials have been super-supportive of it as well. I think the private-public partnership is a very easy way to do this. Mr. WILLIAMS. Okay. How do you interact with local communities before beginning to build data centers to ensure they are an equal partner and valued stakeholder? We have talked about communications. You can't have any-- you can never be too short on communications. So---- Mr. CROSBY. That is right. The challenges that have been brought up by the doctor are not--I would say they are not very common today, but they are still--I mean, they still come up. And when you do not engage with these communities properly--so, for example, when we walk into a community, a lot of people have a myth that these are going to use a lot of water. It is not true. We don't use water at our facilities for those purposes. So we will end up in these meetings. We engage with the community. We sit in the meetings with the hearings, the public hearings, answer their questions. Our most recent one we had in Statesville, North Carolina, we had people that had ``No'' stickers that took their ``No'' stickers off at the end of it as they learned more facts. The key is education, and the key is doing the right thing for that community. That means you have to be built to last. You cannot be built to exit in this business. Mr. WILLIAMS. Yeah. Sometimes you get one crack at it, and you have to get it right. Mr. CROSBY. Yes, sir. Mr. WILLIAMS. Mr. Offel, the growth of the data-center industry has brought massive demand for tradeskills. We have been talking about that all day here. However, the demand for electricians, HVAC technicians, and plumbers has outpaced supply. And I know, in Texas, we are short of welders; we always are short of welders. Now, your business, Overwatch Mission Critical, is actively working to address this problem. What methods have you found most effective in developing the necessary workforce to grow this economy and your industry? Mr. OFFEL. Thank you for the question, Mr. Chairman. It is simple. We have tried to approach this from multiple dimensions. One was with a bunch of Band-Aids. We tried to figure out how we can transfer people that were in adjacent verticals of industry into this industry. And we realized that the adoption rate of emerging technology, specifically driven because of the surge of AI, has allowed us to discover that that strategy is no longer tenable. I am at a point right now where we need to create another apprentice program. This is the fifth utility. This is the fifth utility. We need to have an apprenticeship and journeyman program associated just to this. We needed our own, dedicated apprenticeship program. And we have partnered with a group, a small business-- veteran-owned small business in Dallas, Texas, and we have partnered with them to create an incubator that could put 1,200 people through that program a year that will be certified in data centers. They could join the workforce immediately and be a data-center apprentice. Mr. WILLIAMS. There are 10,000 kids a year dropping out of--or, 100,000 kids a year dropping out of school in Texas in the ninth grade. They are losing hope. And we have to be able to show them that it is not about being architects, businesspeople, whatever. Plumbers, welders, carpenters, technicians. It is important you do this because we can save a lot of kids who are now dropping out of school and we are losing them. So thank you for---- Mr. OFFEL. The largest demand for labor is in this vertical. This industry grows faster than every other industry on this planet because of the growth of every other industry on this planet. And there is no sense sending our kids to college for data centers. Whatever they would be exposed to or learn their freshman year would be obsolete by the time they graduated. There are 6-week, 12-week, and 18-week programs that are designed for high-school kids, as well as the 17,000 people leaving the military on Active Duty every month. There is a large, massive workforce of trained people coming out of military that we are looking to adopt. And those people will help us lay out a roadmap to where we could support people transitioning right out of high school. They just don't know the industry yet. And, right now, everybody is telling them that they need to be scared about it. We need to fix it. Mr. WILLIAMS. Well, in the time remaining, take it to them. Because there are these 100,000 kids who need to have an opportunity, and they will hire their friend too. Mr. OFFEL. Yes, sir. Mr. WILLIAMS. Mr. Chairman, I yield back. Chairman ELLZEY. Thank you. I now recognize Mr. Olszewski from Maryland for 5 minutes. Mr. OLSZEWSKI. Thank you very much, Chairman Ellzey, to Ranking Member Morrison, and to all of our witnesses today. I appreciate your time and your presence. My district in Maryland is home to many beautiful rural communities in both Baltimore and Carroll Counties, which affords our State flourishing farmland and engaged small businesses. Agricultural preservation is a top priority for our district. Since 1980, Carroll County alone has preserved nearly 81,000 acres, with over $200 million invested. Prior to coming to Congress, as Baltimore County executive, I helped push our number to over 71,000 acres of farmland preserved. In Maryland, our farms account for billions of dollars of economic activity. They are a critical part of our history and our economy. Although we do not currently have a data center in Maryland, there are plans to have one under development in Frederick County, and others are being considered across our State. For more than a year now, Baltimore, Frederick, and Carroll Counties have been contending--frankly, fighting--a proposed 67-mile high-voltage transmission line, known as the Maryland Piedmont Reliability Project, or MPRP, needed to fuel power in data centers in northern Virginia--power that we worry, frankly, is simply being transferred from Peach Bottom, Pennsylvania, to northern Virginia. Sadly, our questions to clarify this have gone completely unanswered, both by PJM and by the project's developer. Worse, eminent domain has been proposed. So, unfortunately, that ``reliability'' doesn't seem to cover the Maryland rural communities who are facing the project's burden. Even worse, to Ms. Goodlander's point, the cost of this project, $424 million, would fall on Maryland ratepayers-- ratepayers who are already crushed under a cost-of-living crisis and increasingly high utility costs in our State. I understand that transmission lines play a role in modernizing the electrical grid. However, my constituents and I have been very vocal in expressing these concerns. Our communities have worked for decades, with millions of local and State dollars invested, to conserve this land for future generations, to preserve the economic activity on these lands. Now they are being told it must be sacrificed and their livelihoods disrupted for a transmission line that won't even offer them benefits, and yet these constituents are being asked to pay for it. I guess I would just open with a question for all: Is that fair? Does that make sense? Ms. TURNER LEE. Well, I will start, Representative. And I want to also say to you, Maryland does have beautiful farmland. I spend a lot of time in Garrett County, Maryland, as part of my book with farmers as well as small businesses, entrepreneurs, and residents. The transmission line project I do write about in my written statement, and I think it is one of those examples where we do see a lack of coordination between all the actors and--I do agree with my colleagues--a lack of transparency when it comes to information about what is being done and what is being built. The revenue should come on the side of the companies, not the taxpayers. Mr. OLSZEWSKI. Yep. Ms. TURNER LEE. Because the revenue that comes from the companies can take those communities, even though they don't have a data center--but they can possibly build, you know, a better school, a better firehouse, better broadband for that matter. I do say to you, I do not think it is fair that the community is left in the dark and is going through several challenges to understand why, when, how this project is going to pan out for them. I appreciate that and you including it in your written testimony. Gentlemen? Mr. CROSBY. Yes. Thank you. Look, I agree with a lot of your points. I don't think it is fair for us to come to communities and just say, it is on-- you know, it is on you as a community. Those days were decades ago. Mr. OLSZEWSKI. Yeah. Mr. CROSBY. There are a lot of new players that are doing that sort of technique. And check their capitalization and check their track record--that is what I would say--if you are a community looking at these groups. The other thing I would state is, this should be a very bipartisan issue. Transmission upgrade is absolutely necessary. When we transmit electricity at 69 kV, 130 kV, 90 percent of it is lost in the air versus high voltage. Mr. OLSZEWSKI. Yeah. Mr. CROSBY. Ninety percent. That means we don't have to produce more generation. That means we have generation that just gets wasted. And this is one of the biggest things that we should--that all parties should rally around. We need to upgrade this. That is the easiest, cheapest way for us to do things. Mr. OLSZEWSKI. Yeah. Mr. CROSBY. And data centers want to contribute to that. Come to any of our locations and you will see that brand-new transmission and---- Mr. OLSZEWSKI. And I appreciate the consensus. Just with my 30 seconds left--and, Mr. Offel, hopefully I will give you a chance to respond as well--but I just want to put on the record, Mr. Chairman, a 2024 ``Lazard's Levelized Cost of Energy'' report as well as a NextEra Energy's 2025 investor presentation. I ask unanimous consent to enter those into the record. Thank you very much. I just want to point out that renewable energy projects, according to these, are both cheaper and faster to get built to help fuel this need. So I appreciate our opportunity to look at that. And I apologize we didn't get to you on the answer there, but I really appreciate your testimony. Thank you. I yield back. Chairman ELLZEY. I now recognize Mr. Schmidt from Kansas for 5 minutes. Mr. SCHMIDT. Thank you, Mr. Chairman. And, like my colleagues, I want to thank our witnesses for being here today. It is a topic not new to you but still very new to many of the communities that we represent, and, like a lot of new subjects, as has been suggested here today, it tends to present itself in different ways in different communities. And I have listened carefully, during the time I have been here, to some of the suggestions and responses you have had regarding questions about community engagement, which I appreciate very much. But let me ask just a much more, sort of, global question on that. So I came out of State government. I am a State- and local- control person philosophically, and I believe it in my bones, and I am certainly not advocating something different here. Having said that, one of you, at least, compared in your written testimony the development of the data-center industry to the development of the railroads. And, obviously, 150 years ago, that was a nationalized policy conversation that resulted in national control, some of which, you know, we still deal with the downstream effects of that today, but it also created a tremendous industry. And I guess I would just ask you to speak, either with particularity or philosophically, about, as you look forward, how this industry is going to grow. What is the right balance between federalizing some of these decisions, standards, requirements, and leaving it to those case-by-case local advocacy decisions? And we can just go down the row. Mr. Crosby? Mr. CROSBY. Thank you. Look, I believe the local is always the first approach. You know, there were comments about water and water usage. Those are negotiated locally. Those are not negotiated on a big basis. So those communities are making those decisions live, and we see that. The State of Texas has an advantage, in some ways, because FERC is not engaged with some of the things, and the ability to adapt technology is a little bit faster to try new things. I think speed is one of the elements, where there is an aspect where you are continually making adjustments, continuous-improvement type of items, as you get feedback from these sorts of infrastructure investments. We are putting in massive amounts of capital into the ground and into the wires that are going ahead, building plants. Renewables was mentioned. Data centers have been--data centers and data-center users have been responsible for over 70 percent of the PPAs that are around renewables. We are driving change. We want to do the right thing. The top companies definitely do. And let us work with those communities to continue to innovate and come up with these new and creative ways to do things. Mr. SCHMIDT. Mr. Offel. Mr. OFFEL. Yes, sir. Thank you for the question. Just to put a pattern together for a bit of history, when we started with the first major infrastructure upgrade in America, the railways, the number-one concern was energy, and the number-two was environmental impact. And when we did the electrification of the grid, the number-one concern was energy, and the number-two was the environmental impact. The third was the Interstate Highway System, and the fourth was the automobile. And, in every case, the primary theme has always been energy and what is the impact on environment. And now we are evolving too, what are the jobs that are being created as a byproduct of these vertical industries that are emerging? The things that take an industry like ours, which is niche--and, today, this represents the fact that we are now in the mainstream--is industries that--like the automobile industry, when we were rolling those cars out on the road, they lacked safety, regulation, oversight, governance, regulation, and, many would argue, ethics--some of the same things that you are challenging us on, and justifiably so, today. The answer is, we have a partnership with you. We must be working with all elements of levels of government. And we need to be able to make sure that someday you understand that we are no longer consumers of your utility, we are creators of it, making us partners of it. We will be able to reinforce--and I think in your district, what he was talking about was to have the ability to island ourselves. If we have, since the birth of this vertical, 55 gigs of energy on the grid, we are under construction today for 40 to 80 gigawatts of natural renewable energy, meaning that we will not only put our own energy on the grid and tie it into the grid in a closed transition, allowing us to co-generate, that gives us not only the ability to move the needle to the left, but we reinforce that grid so that the people that are out in the urban areas aren't at risk of losing power, because data-centers providers are the ones that are building it. And, today, with the exception of a few misfit toys, we are at zero-water design on data centers. We don't use water, for the same reason you don't use water in your radiator, which is a closed-loop system. It doesn't absorb and reject heat fast enough. These data centers are so dense that we can't use water. So, we are here to partner with you on creating more water, and we are partners to the utility. We will become a utility ourselves. Mr. SCHMIDT. Doctor, I have 10 seconds. Ms. TURNER LEE. Yeah, just 10 seconds. I actually challenge the railroad analogy, so I will start there, because I think we need to think about the railroad as it allowed rural communities to become transit points for the way in which we were actually moving trade, and data centers that actually may be incentivized to bring more profit to companies versus people. I want to actually challenge that, because I think AI needs more industrial policy, in many respects, to ensure that we get national benefits. I would just say outside of just the energy policy for the Congress, it is important for Congress to also create a certain environment in the marketplace. Tariffs, the availability of critical minerals, our availability to have the aluminum that is going into the buildings--it is all uncertain right now. And I think those costs could actually be passed on to communities if we actually don't get the certainty of the marketplace right in terms of our congressional policies. Mr. SCHMIDT. Thank you. I yield back, Mr. Chairman. Chairman ELLZEY. Thank you. I now recognize Ms. Scholten from Michigan for 5 minutes. Ms. SCHOLTEN. Thank you, Mr. Chairman. Dr. Turner, every 2 years, we pass a bipartisan Water Resources Development Act, which authorizes the Army Corps of Engineers to address water supply needs and carry out vital infrastructure products. I am happy to report that the Committee has been hard at work to develop the seventh consecutive bipartisan WRDA to navigate local water resource challenges, boost regional economies, create jobs, and protect our natural environment. What is the importance to our rural communities that WRDA is passed in a bipartisan fashion? Ms. TURNER LEE. It is extremely important. I have nothing else to say. But I think we do need to keep passing this, because that is actually going to allow us to negotiate through some of these challenges that we have been talking about today. Ms. SCHOLTEN. Absolutely. The few operations jobs that data centers create require IT expertise, meaning individuals in career and technical education--careers in technical education will be increasingly in demand. Last week, I introduced my bill, the Honoring Vocational Education Act, which would permanently establish a survey on education attainment within the skilled technical workforce. It is critical to advancing and maintaining a skilled workforce. We have to ensure that skilled tradespeople and technical workers are fully accounted for in federal workforce data, especially when these jobs are becoming so critical to building and supporting innovation. Again, Dr. Turner Lee, what is the role of career and technical education in ensuring that these local jobs can be filled and created as data centers are developed? Ms. TURNER LEE. I completely agree with you. A couple years ago, when we had the BEAD money, I did the same thing with broadband, because these are livable wage jobs. Ms. SCHOLTEN. Yep. Ms. TURNER LEE. They are jobs that we need to build the infrastructure. Just as the Hoover Dam, we had to build that dam, we had to find workers to do the same thing. I think we need to continue to invest in technical training, but I also want to make sure that there will be jobs that have some IT slant to it, because technical jobs--even your greatest plumber has to rely upon AI in some way or form to do their job. And so it is important for us to balance that--how do we do the acute, you know, faculty skills alongside making sure rural communities and rural citizens know how to actually maneuver through AI itself. Ms. SCHOLTEN. Absolutely. They go hand-in-hand---- Ms. TURNER LEE. They do. Ms. SCHOLTEN.--and have to be developed together. One last question for you, Dr. Turner Lee: In your testimony, you discuss the importance of ensuring early collaboration between utilities, local governments, and their rural communities. Just last month, in my district, a planning meeting for a data center in Kent County was canceled due to overcapacity, with hundreds of residents showing up to make their voices heard in these discussions. How can we, as Members of Congress, help facilitate and support these conversations to ensure that residents aren't left in the dark as planning for these data centers continues? Ms. TURNER LEE. Well, I want to agree with my colleagues, particularly the--my colleagues who are in a space where they are working every day with some of these local communities. And I commend them on the efforts that they have put forth. I do think Congress should put out some type of data-center literacy act---- Ms. SCHOLTEN. Uh-huh. Ms. TURNER LEE.--something that allows people to know that this next stage of innovation, if we are comparing it to the railroad, is an all-in project. Ms. SCHOLTEN. Yeah. Ms. TURNER LEE. Everybody needs to be at the table. I think we are seeing these rooms full to capacity because people are really worried. They are worried about the things that they know based on what the media is telling them, and they are worried about the things that they do not know. Ms. SCHOLTEN. Yeah. Ms. TURNER LEE. It is an easy fix if we find ways to raise their literacy around what data centers are and what they do. And I actually would say that we connect this to AI literacy bills---- Ms. SCHOLTEN. Yeah. Ms. TURNER LEE.--so people know that when there is a data center in your neighborhood, there is a benefit to you as well---- Ms. SCHOLTEN. Yeah. Ms. TURNER LEE.--and, you know, what you can access and do. Ms. SCHOLTEN. Absolutely. I am already working on something like that with one of my colleagues from Michigan. We would love to run it by you, get your input on it as well. So thank you so much for your testimony. I yield back. Ms. TURNER LEE. Thank you. I look forward to working with you. Ms. SCHOLTEN. Thank you. Chairman ELLZEY. Thank you. I now recognize Mr. Wied from Wisconsin for 5 minutes. Mr. WIED. Thank you, Mr. Chairman. Thank you to all of the witnesses for being here today. We appreciate the work each of you are doing to shape the future of America's digital infrastructure and the communities that support it. Across the country, we are seeing a rapid growth in data centers, driven by the accelerating demand for AI. Increasingly, these facilities are choosing rural communities, creating new opportunities in skilled trades, construction, and facility operations, offering a pathway to stable, middle-class careers in regions that have too often been left behind. At the same time, this expansion brings real challenges, from meeting the energy needs of these facilities to the increase in workforce demands. Small businesses are central to this story. They are the contractors, suppliers, and service providers who make these projects possible and who stand to benefit long after construction ends. As AI demand centers continue to grow, it is my hope that we can find solutions that balance the needs of tech entrepreneurs while also protecting the rights and the voices of, of course, our local communities. Mr. Crosby, I will start with you. In your testimony, you said that data centers act as anchor tenants that put downward pressure, actually, on electricity rates. And that is one of the biggest concerns. We have a project in northeastern Wisconsin that was--you know, the local, the community was very, very involved. That was one of the big concerns, is electricity rates. Could you expand, walk us through, you know, how rural taxpayers actually could see savings? Mr. CROSBY. Yes. In States where it is not regulated that they have to share everything with consumers--so there are States and regions in the country that it is forced to be shared, so even if you wanted to foot your own bill, you are not allowed to foot your own bill; it is forced onto consumers. In those other States that that is not the case, you can-- one is the connection interconnect charges. That is paying to bring the power to you. That is what we pay for, those charges to do that. The second is, how do the rates come down? So keep that first cost off, of bringing the transmission to you. Now, how do the rates come down? Because if we can utilize existing infrastructure--the grid runs at about 50 percent right now. And if we can use that infrastructure for the vast majority of the year--in a State like Wisconsin, you might have 20 hours a year of peak power, out of 8,760 hours. That means we could be utilizing that capacity and then island ourselves during those times where the grid operator says, ``It is a tough environment. Go ahead and come off the grid. We don't want consumers to--we don't want there to be anything to hurt the grid.'' That is a grid stability. If you are using infrastructure that is already built and paid for, it will drive down costs for consumers. We have seen that. Southern Company, Chris Womack's company, they put out a report there about that. PGE put out a report, Maria Pope. We work very closely with utilities--EPRI, EEI. We are trying to get the regulatory environments to allow us to pay for what we want--pay for the power that we want to use and help us drive down these costs. Mr. WIED. You also mentioned--another thing that I have heard a lot with this most recent one in our community is depletion of the aquifer. You mentioned that Compass mandates water-free cooling technology to protect agriculture water supplies. Can you explain what that looks like in practice? Mr. CROSBY. Yeah. I grew up in the State of Texas. Water has always been a precious resource. We were one of the very early adopters of saying no water. A lot of evaporative cooling was used in the space. That got eliminated several years ago but for a few, as Kirk likes to say, misfit toys and then some that are using evaporative cooling but creating water-positive environments, where they are investing in and replenishing aquifers more than what they use. I do not think it is a valid claim anymore to say with a blanket statement that data centers use water. I reject the premise of that. Mr. WIED. Let's go to Mr. Offel. I think you--well, you acknowledged that the industry hasn't communicated very well with local communities. And I feel, you know, we don't want them blindsided. And so, from your point of view, what is--no question, we need early engagement, and engagement is very important in these types of things. What does early engagement look like to you? How do we ensure that rural residents, they feel informed rather than blindsided? Mr. OFFEL. That is a fair question. And their concerns are extremely valid. We are not trivializing those. The only way to solve it is with immersion. There are three different types of audiences that we need to address. There is no silver-bullet answer that will make everybody happy. We need to convert the way that we view these things as something that is just a consumer of utilities, and we need to help them understand what AI means to them as a human beings, how does it help them. As a small business, AI gives me the ability to compete against the Goliaths of this world, because it level-sets the playing field. Plus, for those people that want to be in the game, it opens up better career opportunities, because it lowers the barrier of entry to market for new jobs. Mr. WIED. Thank you, Mr. Chairman. I yield back. Chairman ELLZEY. Thank you. I will now recognize Dr. Morrison for her closing statement. Ms. MORRISON. Thank you, Mr. Chairman. And congratulations on a very amiable hearing. I think this has been a really interesting and important conversation. And I am grateful to the witnesses for your presence. You know, we have talked about the good, the bad, and the ugly, in some cases, parts of the data-center boom. It is a very nuanced topic. And there are so many ways that data centers play with existing issues, such as tariffs, which are crushing our main streets and industries--we have recent evidence that supports what economists have been saying from the beginning of this chaotic tariff war, that Americans pay them in taxes; 96 percent of tariffs have been paid for by Americans over this past year--and the immigration crackdown choking our workforce and entrepreneurs and, as someone from the Twin Cities, literally terrorizing our communities. I intend to submit further questions for the record. I hope to keep the conversation going down the line. There is so much to discuss. Thanks so much, again, to the witnesses for your insights. And, with that, I yield back. Chairman ELLZEY. Thank you, Dr. Morrison. I recognize myself for a closing statement. I am so proud to have data centers in my rural community just south of Dallas. There was a lot of concern at the very beginning about what does this mean, this new technology, this new horizon of ours in technology and AI and everything that goes with it. I understand the fear of some of my colleagues on particularly the Eastern Seaboard, which is stretched thin with energy, power, and water and lines and so many other things. I am here to tell you that if you are interested in seeing what they really do, how they really contribute to our communities, Doctor, come visit us in Red Oak and Midlothian for a couple days, stick around. These gentlemen would be happy to host you, and so would I. As I look at the city of Red Oak, which is growing by leaps and bounds because of industry coming there, a talented workforce--all of the people in that community are benefiting from these data centers coming to them, from construction, from flipping burgers, from Walmart, from Brookshire's, to homebuilders, to everybody else in between, and a strong, stable tax base to provide excellent schools, excellent public schools for our kids. They are not drawing on the water. They are adding to the power. They are adding security in a lot of rural communities that, in many cases in Texas and elsewhere, those rural communities are looking for a reason to survive, and many of them are struggling. This new technology gives them an opportunity to do so. They are doing so responsibly, with the cooperation of State and local governments. And they are an incredible benefit to the State of Texas and to Red Oak, Midlothian, and Ellis County. So I want to thank everybody for participating in this robust discussion today. It has been a fantastic hearing. I hope it generates more discussion going forward. Thank you all for being here. And, without objection, Members have 5 legislative days to submit additional materials and written questions for the witnesses to the Chair, which will be forwarded to the witnesses. I ask the witnesses to please respond promptly. If there is no further business, without objection, the Committee is adjourned. [Whereupon, at 11:22 a.m., the Subcommittee was adjourned.] A P P E N D I X [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] [all]