Live: Oral arguments begin over proposed data center in Spartanburg County

COLUMBIA, S.C. (WCSC/WHNS) — A legal fight over a proposed $3 billion data center in Spartanburg County drew dozens of Upstate residents to Columbia Wednesday, as the South Carolina Public Service Commission heard arguments over whether the project must undergo additional state review, despite construction already starting.

Residents packed a coach bus and traveled to the hearing, which PSC officials said marked the largest turnout for a commission hearing since 2018.

At the center of the dispute is a proposed Valara Holdings data center campus spanning more than 900,000 square feet. The project has become a flashpoint in the growing debate over data center development across South Carolina, where roughly 10 counties have enacted moratoriums on new data center proposals or are considering similar restrictions.

Among those attending the hearing was Spartanburg County resident Mark Felk, who lives across the street from the construction site.

"Well, it's been extreme chaos," Felk told commissioners.

Felk said the scale and pace of development have disrupted the surrounding area.

"It's been the most rampant expansion that I've seen in my life. You have dust, soot, and noise," he said.

Felk and other residents are backing a lawsuit filed by the Southern Environmental Law Center, which argues Valara is constructing a natural gas-fired power plant to serve the data center without complying with requirements under South Carolina's Utility Facility Siting and Environmental Protection Act.

The environmental group contends the size and generating capacity of the proposed power facility require review and approval by state regulators before construction can proceed.

"We're concerned the Public Service Commission rules the other way, that it may send a signal to data centers, come on down, you're not going to have to go through the same reviews you have to in other states," Frank Holleman, an attorney with the Southern Environmental Law Center, said.

Valara disputes that claim, arguing the power plant would operate as a private facility dedicated exclusively to the data center and would not provide electricity to the public grid.

"These are purely private islanded off generators that will never export power to the electric system. There is no impact on the system economy or reliability," attorney Andrew D'Antoni, who represents Valara Holdings, said.

The South Carolina Office of Regulatory Staff, which participates in utility proceedings on behalf of the public interest, sided with residents and the environmental law center during Wednesday's hearing.

"Valara here is really making the statutory construction argument. They're asking the court to read outside the plain language of the statute, which is misplaced," Clare Benge with the Office of Regulatory Staff said.

The Public Service Commission did not issue an immediate ruling. Commissioners have set a Sept. 4 deadline to vote and determine whether the project falls under state utility siting requirements. The decision could have broader implications for future data center developments proposed across South Carolina.