Luzerne County Eyes Tax Break Pause Amid AI Data Center Boom
Luzerne County Council in Pennsylvania is weighing a significant policy shift, considering a temporary halt to property tax relief plans for land located south of Talen Energy’s nuclear power plant. This potential moratorium comes in direct response to the escalating demand for data centers, particularly those powering the burgeoning field of artificial intelligence, and a newly proposed power transmission line by PPL through the picturesque Sugarloaf Valley. The council is also debating whether to suspend tax breaks that have already been approved for development in the area, specifically in Salem Township.
The impetus for this reevaluation stems from local opposition, notably from John Zola, a resident of Sugarloaf Township and a leading figure in the Alliance to Stop the Line, a group formed to counter the proposed transmission project. Zola has advocated for both a moratorium on new tax breaks and the suspension of existing ones in the affected region. Councilman Harry Haas subsequently added these discussions to a recent work session agenda, indicating his intent to propose formal measures at the August 26 meeting. Among these proposed measures is a vote on establishing nonbinding guidelines for negotiating property tax incentives, an idea that was previously removed from the council’s June 10 voting agenda.
Councilman Haas articulated a clear vision for the county’s future, emphasizing the need to strike a balance between development and preservation. “We’ve got to meet some kind of middle ground that protects people’s quality of life, that secures it for our grandkids’ future, that preserves Luzerne County, which is a very unique place,” Haas stated, adding, “I don’t want to be the Lehigh Valley. I don’t think most of you want to be the Lehigh Valley here.” The tax breaks in question are granted under the Local Economic Revitalization Tax Assistance (LERTA) Act, which allows for property tax abatements of up to 10 years on the increased assessed value resulting from new development in designated deteriorated areas.
Driving much of the increased power demand is PPL Corporation’s ambitious plan to invest $6.8 billion through 2028. This substantial investment is earmarked for expanding grid capacity and modernizing transmission infrastructure across multiple Pennsylvania counties, specifically to accommodate the surging energy requirements of data centers. In southern Luzerne County, PPL Electric Utilities intends to construct a 12-mile high-voltage transmission line and two new switchyards, utilizing an existing right-of-way corridor. This line is projected to traverse several municipalities, including Sugarloaf, Nescopeck, Black Creek, and Hazle Townships. Zola has voiced strong concerns about the project, asserting that the century-old right-of-way is inadequate for the proposed scale of development and that PPL is resorting to the threat of eminent domain to acquire necessary land. Construction on the project is slated to begin next year, with completion anticipated by 2027, following the finalization of planning and design and subsequent approval from the Pennsylvania Public Utilities Commission later this year.
The connection between the new power infrastructure and data center growth is explicit. In March, the council approved a 10-year LERTA property tax break for a planned data center on 472 acres near Humboldt Industrial Park in Hazle Township. John Zola contends that this facility is specifically designed to draw power from the new PPL transmission line. “Those factories and those data centers are using that power, and there’s no way ifs, ands or buts about it,” Zola insisted, challenging any claims to the contrary as a “bold face lie.” Further underscoring the trend, Amazon has also proposed a data center in Salem Township, intended to tap into the energy output of the Talen Energy nuclear power plant.
The legal implications of suspending previously approved tax breaks are significant. When Councilman Jimmy Sabatino inquired about the feasibility of such an action, Solicitor Harry Skene provided a stark warning: “Not without getting sued.” This legal hurdle complicates the council’s efforts to retroactively address concerns about development incentives. Adding another layer to the complex landscape, a proposed state Senate bill aims to fast-track permitting for data centers across Pennsylvania while simultaneously imposing limits on local zoning authority to ensure consistency across municipalities.
As Luzerne County grapples with the accelerating pace of technological development and the infrastructure required to support it, the council faces a delicate balancing act. The debate over tax incentives highlights the tension between fostering economic growth, ensuring reliable power infrastructure, and preserving the quality of life and unique character of local communities.