Florida's data center law: what SB 484 does as DeSantis touts it

Gov. Ron DeSantis took to social media on Friday, Oct. 2, to promote Senate Bill 484, Florida's new law requiring large data centers to pay their own cost of electric service so that the expense of powering them is not passed on to residential and small business customers. The law, which took effect July 1, arrives as artificial intelligence companies race to build power-hungry facilities across the country and Florida utilities field a growing number of inquiries from would-be developers.

DeSantis signed the measure on May 7 at Florida Polytechnic University in Lakeland. It directs the Florida Public Service Commission, which regulates investor-owned utilities such as Florida Power & Light and Duke Energy Florida, to ensure that large data center customers bear their full share of costs, including electrical infrastructure, transmission upgrades and system expansions needed to serve them.

The law also strengthens local governments' authority to reject projects, sets new rules on water use, limits confidentiality agreements between cities and tech companies and bars utilities from serving data centers controlled by foreign countries of concern. Here is a closer look at what it does and why it matters for Florida ratepayers.

How the law came together

Lawmakers sent SB 484 to the governor in March at the end of the 2026 regular session, after a debate that drew input from utilities, technology companies, environmental groups and local governments. The bill moved as data center proposals were surfacing in several Florida counties and as utilities across the Southeast reported surging requests for new large-load service tied to artificial intelligence.

The national backdrop shaped the discussion. Training and running AI models requires vast computing power, and companies have announced data center campuses costing billions of dollars, many of them clustered in states with available land, power and water. Electric utilities in some regions have warned that projected demand from these facilities could outstrip planned generation, prompting debates over who should pay for new power plants and transmission lines.

Florida's approach combines an open door to investment with guardrails on cost and resources. Supporters argued the law gives developers clear rules up front, while critics said key provisions, particularly on water, leave too much room for interpretation.

Who counts as a large-scale data center

SB 484 applies its cost-recovery rules to large-scale data centers, defined as facilities that use at least 50 megawatts of electricity at peak demand. For perspective, a load of that size is comparable to the demand of tens of thousands of homes, and the largest AI campuses proposed around the country seek hundreds of megawatts or more.

Smaller server facilities, such as the computer rooms inside office buildings or modest colocation sites, fall below the threshold and are not subject to the same requirements. The focus on large loads reflects concerns that a handful of very large customers could force utilities to build new power plants and transmission lines whose costs would otherwise be spread across every customer's bill.

Making data centers pay their own way

At the core of the law is the principle that large-scale data centers should bear their own full cost of service. The Public Service Commission is directed to develop tariffs and minimum service requirements that put that principle into practice, so that the cost of generation, transmission and distribution built for a data center is assigned to that data center rather than to the general body of ratepayers.

Utility regulators typically set rates by dividing a utility's costs among customer classes, such as residential, commercial and industrial. When a single new customer requires major new infrastructure, regulators must decide how much of that investment the customer pays directly and how much is folded into the rate base shared by everyone. SB 484 tilts that decision firmly toward the data center paying.

The law required electric providers to file documents with the PSC by Oct. 1 laying out how they intend to comply, according to published reports. Those filings will offer the first detailed look at how FPL, Duke Energy Florida, Tampa Electric and other utilities plan to structure contracts, deposits and long-term commitments for very large customers.

Consumer advocates in other states have pushed for similar protections, including minimum-term contracts and exit fees, so that if a data center scales back or leaves, the remaining customers are not stuck paying for infrastructure built to serve it. How the PSC writes those details will determine how much protection Florida households actually receive.

Local control and confidentiality limits

SB 484 reinforces the authority of counties and cities to block data center projects through their land use and zoning powers. That provision matters in fast-growing parts of the state where residents have raised concerns about noise, traffic, water use and the industrial scale of proposed facilities next to rural or residential neighborhoods.

The law also addresses the secrecy that often surrounds data center deals. Tech companies frequently negotiate with local governments under code names and nondisclosure agreements, sometimes leaving residents unaware of who is behind a project until late in the process. SB 484 allows temporary confidentiality agreements between municipalities and tech companies for up to 12 months during negotiations, setting a limit on how long those arrangements can remain secret.

Water use and foreign ownership

Water is a major concern in a state that relies heavily on underground aquifers for drinking water. Under SB 484, large-scale data centers that consume at least 100,000 gallons of water per day must use reclaimed water for cooling when doing so is environmentally, economically and technically feasible, according to reports on the law. The measure also restricts water management districts and the Florida Department of Environmental Protection from issuing consumptive use permits to large-scale data centers under certain conditions, while allowing reclaimed water to count toward permitting requirements.

Critics have questioned how the feasibility standard will be applied. Commentators writing in Florida outlets have noted that the word feasible is not defined in Florida Statutes, raising concerns that developers could argue reclaimed water is not feasible and continue relying on fresh groundwater. Supporters counter that the provision gives regulators a clear preference for reclaimed water and a basis for scrutinizing permit applications.

The law also bars utilities from providing service to data centers owned or controlled by foreign countries of concern, extending a theme found in other recent Florida laws restricting land purchases and contracts involving countries such as China. Supporters frame the provision as a national security measure aimed at protecting critical infrastructure.

The Loxahatchee fight

The debate over SB 484 played out against a high-profile local fight in western Palm Beach County. A developer proposed a large AI data center, known as Project Tango, on roughly 200 acres along Southern Boulevard in Loxahatchee. Published reports described a project drawing about 600 megawatts of power, with an initial plan for nearly 3.6 million square feet that included a data center the developer said would use 100,000 gallons of drinking water a day.

The proposal drew intense opposition from residents worried about constant low-frequency noise, water consumption, traffic and the effect on the area's rural character. After the developer scaled the plan back, Palm Beach County commissioners voted 5-1 to deny the project without prejudice following hours of debate, according to local news reports. The developer has appealed under a state law that sends land use disputes to a special magistrate, whose recommendation goes back to the County Commission.

The Loxahatchee case illustrated the questions SB 484 tries to answer: who pays for the power, where the water comes from and how much say local residents have. It also showed that local governments, not the state, remain the first line of decision-making on where these facilities can be built.

What it means for FPL and Duke customers

For most Floridians, the most important question is whether their power bills will rise because of data centers. Florida's largest utilities have sought rate increases in recent years to cover grid hardening, new generation and fuel costs, and customers have felt the impact. Nationally, growing electricity demand from data centers has become a major factor in utility planning, and consumer advocates in several states have warned that households could end up subsidizing tech companies' power needs.

SB 484 is designed to prevent that outcome in Florida. If the PSC implements the law as intended, the costs of new substations, transmission lines and power plants built primarily for data centers should be recovered from those customers. Ratepayers could still see indirect effects, since large new loads influence long-term planning for the entire grid, but the law gives the PSC a clear legislative directive to protect residential and small business customers.

DeSantis has framed the law as a way to welcome technology investment without making ordinary Floridians foot the bill. The state's relatively low land costs, available power and business-friendly tax climate make it attractive to developers, and the law aims to channel that interest on terms set by the state and local communities.

What's next

The most important developments will come from the Public Service Commission. Utilities' Oct. 1 compliance filings will be reviewed by PSC staff and may be challenged or refined by consumer advocates, including the Office of Public Counsel, which represents ratepayers in utility cases. Watch for proposed tariffs, minimum contract terms and any disputes over how costs are allocated.

At the local level, more counties and cities are likely to adopt zoning rules specific to data centers, and the Loxahatchee appeal will test how much leverage local governments retain when developers challenge a denial. Water management districts will also begin applying the law's reclaimed water and permitting provisions to any large projects that come forward.

For residents, the key is to watch PSC proceedings and local planning agendas. Both are public, and both will determine whether SB 484 delivers the ratepayer protections DeSantis is promoting.