Peter Schorsch
The Florida Public Service Commission is reviewing a major rate case from Florida Power & Light that could reshape the state’s approach to data center development — and not in a good way.
At the center of the controversy is a proposed new rate classification called “Large Load, Constant Service,” designed specifically for data centers. If approved, it would impose a rate increase of more than 66% compared to what other high-demand commercial users currently pay.
The timing is particularly sensitive. While Florida has never been a top destination for data centers — thanks largely to hurricane risks — state leaders have recently begun laying the groundwork to change that.
This year’s budget includes a 10-year extension of the sales tax exemption for data center equipment, a move intended to attract investment in what has become a cornerstone industry of the digital economy. Meanwhile, FPL and other utilities have poured resources into grid hardening and reliability improvements, making Florida’s electric network more resilient than ever and finally positioning the state as a legitimate contender in the data center space.
But tech stakeholders say the LLCS proposal could unravel that momentum before it gains steam. Robert Provine, President of the Florida Energy Innovation Association, testified that electricity is often the largest operating cost for hyperscale data centers — sometimes reaching 60% of total expenses.
“If the Commission approves the LLCS Tariff as currently proposed,” he said, “there is no doubt data center investment in Florida will be deterred and Florida’s role in the digital and AI economy will be significantly limited.”
That concern isn’t theoretical. A report from PwC commissioned by the Data Center Coalition found that the data center industry added $2.1 trillion to U.S. GDP between 2017 and 2021 and contributed over $400 billion in tax revenue. Employment in the sector also outpaced national job growth by a factor of eight. Perhaps most notably, Loudoun County, Va. — home to the largest concentration of data centers in the world — now generates more than $1.2 billion annually in local taxes from the industry, helping fund schools, roads, and public services while allowing the county to slash residential property tax rates by 37% over the past 14 years.
Buddy Rizer, Loudoun’s executive director for economic development, said Florida is standing at a similar crossroads.
“Florida has the land, talent, and business climate to lead in digital infrastructure,” he said. “But unless electricity rates are competitive, these projects will go elsewhere — and the state will miss out.”
The Public Service Commission is expected to take up the LLCS proposal in hearings later this summer. The outcome could determine whether Florida becomes a rising star in the AI and digital infrastructure economy — or remains on the sidelines.
