Spartanburg data center not subject to public power plant rules, SC regulators rule

COLUMBIA — South Carolina utility regulators ruled a Spartanburg data center that wants to generate its own power is not subject to the same regulatory process as power plants.

NorthMark Strategies, along with its subsidiary Valara Holdings, is converting a former Kohler kitchen and bath manufacturing plant into a $2.8 billion computing center. In June, environmental and citizens groups petitioned the state Public Service Commission to conduct its own review and halt construction of the center.

The commission on Thursday sided with Valara, ruling that the law public utility companies must abide by does not apply to the private technology company because “the facility will not export power generated to the electric grid for public use.”

One commissioner, David Britt, a former member of the Spartanburg County Council who supported Valara’s move to the county, recused himself from the vote and left the room.

“We are pleased with today’s unanimous ruling from the Public Service Commission, which agreed with our position that businesses generating power for their own use are not subject to South Carolina’s Utility Siting Act. We didn’t ask for an exception, but for the law to be read as written,” the company wrote in a statement.

Powering data centers

Large data centers, known as hyper scalers, have faced public backlash nationwide, largely for the massive amount of power they require to operate.

In that sense, Valara is different. Because it wants to generate its own power, it won’t be adding demand to the grid or directly impacting residential power bills.

The problem, according to the Southern Environmental Law Center, came when the company sought to drastically raise its power production well above its initial application.

State environmental regulators initially approved the company for about 50 megawatts. But Valara has since sought to amend its application to a total of 450 megawatts.

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The Valara project became public in March 2025 when Spartanburg County began negotiating tax incentives for the project that would create 27 jobs.

At the time, Britt, the former county councilman who now sits on the Public Service Commission, told the SC Daily Gazette that the center was not expected to use more energy than the site’s former tenant.

Ultimately, that was not the case.

The facility is already permitted for 24 natural gas generators that each produce 2,000 kilowatts. The new request, submitted to the state Department of Environmental Services in March, asks for an additional five 17-megawatt natural gas combustion turbines and six 54-megawatt natural gas combustion turbines.

It’s that application that brought hundreds of residents to a downtown Spartanburg auditorium in June to voice their concerns about noise and air pollution from the turbines.

Emily Wyche, an attorney for the Southern Environmental Law Center, previously argued that the Public Service Commission takes a more holistic view, “weighing the different sort of impacts against alleged benefits of a facility,” rather than just looking at it through an environmental lens.

“This decision means that companies like Valara can build power plants of any size without any oversight from the commission,” the environmental center’s senior attorney Kate Mixson said in a statement Thursday. “As data centers descend on our state, this decision is the equivalent of putting out a calling card to these out-of-state companies: come to South Carolina, build as large of a power plant as you want to power your data center, and we won’t oversee it. The decision affects far more than the Valara project— if it stands, it will have massive consequences for our health, environment and electric system.”

Lawsuit continues

While the commission’s decision Thursday puts an end to those proceedings, a separate lawsuit continues. It was filed July 6 in Spartanburg County by Southern Environmental Law Center on behalf of a concerned citizens group.

In that case, the group argues Spartanburg County violated its own development codes by classifying the center, located on 300 acres southeast of the city of Spartanburg, as a “minor” development. The Southern Environmental Law Center said Valara accomplished this by segmenting its permitting process into smaller pieces and expanding the scope after construction had begun.

SC counties enacting data center moratoriums

“Despite its size and scale, Spartanburg County allowed the developer to advance the project through the abbreviated ‘minor’ land development permitting process without the Planning Commission’s review and public process,” the law center said in a statement.

“While one permit for the ‘minor’ development has been issued, the second segmented permit is still pending before the County. Despite this, Valara has commenced massive construction, including tree clearing and grading activities, across the whole site,” the statement continued.

The group has asked the judge to order construction paused until the lawsuit is resolved.

Asked for response, a Valara spokeswoman said the company “is confident in the merits of its position.

“The project has been developed in close coordination with the appropriate state and local authorities, and we remain committed to moving forward responsibly and in compliance with all applicable requirements,” Sarah Knox wrote Thursday in an email to the SC Daily Gazette.

Meanwhile, Spartanburg County has blocked a different data center, proposed by a company called LightHouse, amid the public backlash.

County zoning officials on Tuesday denied an appeal by LightHouse as it sought permission to build its 200,000-square-foot center on 150 acres near Interstate 85, northeast of the city of Spartanburg.

The county council also is considering a one-year moratorium on all new data centers. A final vote on the moratorium is expected next month.