This week’s Zoning In report covers a shift in U.S. presidential support for data centers, with notable advancements since the COVID-19 pandemic. The Trump administration recognized data centers as essential infrastructure, setting the stage for the Biden administration’s Broadband Equity, Access, and Deployment (BEAD) program, allocating $42.45 billion to close the digital divide.
Additionally, various legislative actions underscore mounting tensions between developers and local communities. A lawsuit in Minnesota challenges large-scale data center projects, while Virginia faces mixed reactions to proposed regulations on energy usage and site assessments.
In Georgia, the Public Service Commission aims to shield residents from rising energy costs linked to data center consumption. Kentucky’s entry into the data center market with a 400-MW project shows how local economies are positioning themselves to benefit.
Turning of the Tides: An Analysis of Recent U.S. Presidential Support for Data Centers and Digital Infrastructure
The COVID-19 pandemic marked a turning point for the visibility and importance of data centers, recognized as “essential infrastructure” under the Trump administration. As businesses, schools, and healthcare providers transitioned to remote operations, data centers were thrust into the spotlight as the backbone of societal function, maintaining reliable uptime amid surging demand.
This shift highlighted the resilience of the data center industry and exposed the digital divide, particularly in rural areas where broadband access was limited. The Biden-Harris administration responded with the Broadband Equity, Access, and Deployment (BEAD) program, allocating $42.45 billion under the Bipartisan Infrastructure Law to expand high-speed internet access nationwide. States such as Virginia, New Mexico, and New Jersey received substantial funding to bridge the connectivity gap.
These initiatives, alongside global investments like DAMAC’s U.S. expansion and OpenAI’s Stargate Project, demonstrate the critical role of digital infrastructure in shaping the future. The industry’s trajectory will depend on this blend of private innovation and government support as the AI wave continues.
Read The Full Article at Data Center Frontier
New Report Claims Environmental and Consumer Risks of Data Center Expansion
A new report, Big data centers, big problems: The surging environmental and consumer costs of AI, crypto and big data, was released by Frontier Group, U.S. PIRG Education Fund, and Environment America Research & Policy Center, organizations known for advocating renewable energy and sustainability. The report raises concerns about the environmental and consumer impacts of the rapid expansion of data centers in the U.S., particularly in powering technologies like artificial intelligence (AI) and cryptocurrency.
The report highlights a doubling in U.S. data centers from 2021 to 2024, with electricity demand increasing in parallel. This growth is linked to delays in closing 17 fossil fuel power plants, new plans for over 10,800 MW of fossil fuel-based power generation, and efforts to revive nuclear facilities to support data center energy needs. The study also warns that data centers could drive up utility costs for consumers due to grid integration expenses.
Key recommendations include ensuring data centers use renewable energy, improving energy and water usage transparency, and assessing the societal value of energy-intensive computing relative to its environmental and consumer costs.
Read The Full Article at Environment America
Castle Rock Files Lawsuit Against Farmington Over Data Center Development
Castle Rock Township has filed a lawsuit against the City of Farmington, accusing it of violating an orderly annexation agreement when approving a 2.5-million-square-foot data center project. The legal challenge follows a Dakota County judge’s injunction halting the $5 billion project proposed by Denver-based developer Tract, which planned up to 12 data centers near the Farmington-Castle Rock border.
Residents and advocacy groups, including the Coalition for Responsible Data Center Development, voiced strong opposition, citing concerns about property values, quality of life, noise, and resource usage. Coalition leader Cathy Johnson has called for state-level guardrails on large-scale data center projects and a moratorium until guidelines are established.
Castle Rock claims Farmington violated their 2017 orderly annexation agreement by rezoning land for the data center without proper adherence to the agreement. State legislators have introduced bills to block the project, and advocacy efforts are ongoing at both the community and legislative levels.
This case highlights growing tensions between municipalities, developers, and residents over data center development, as communities seek to balance economic benefits with environmental and social impacts.
Read The Full Article at Hometown Source
Minnesota Lawmaker Introduces Bill to Restrict Data Center Construction
Minnesota Senator Bill Lieske has proposed a bipartisan bill aimed at restricting large data center developments. The legislation would require data centers exceeding 800,000 square feet to obtain a conditional use permit and be located in industrial districts. This contrasts with current zoning laws allowing data centers in mixed-use commercial-industrial areas.
The bill aims to prevent residential areas from being located within 250 feet of data centers and has gained support from some Farmington residents, who are challenging a proposed $5 billion, 12-building Farmington Technology Park development in court. Lieske emphasized that the bill is not an anti-data center but seeks to ensure thoughtful placement of such facilities.
Opponents of the bill expressed concerns about removing local government zoning authority. If passed, the restrictions would take effect on June 20, 2025, impacting new enterprise data centers.
Read The Full Article at Yahoo!
Virginia’s Mixed Reception to Data Center Regulation
Efforts to regulate data centers in Virginia have seen a mixed response. A proposed bill for statewide regulatory reviews, including environmental and economic assessments, was rejected in committee. However, legislation enabling noise and land site assessments has advanced.
Virginia leads the world in data centers, but concerns about environmental impacts and energy demands are growing. A report by the Joint Legislative Audit and Review Commission predicts state energy demand could double in the next decade due to data centers posing significant infrastructure challenges.
Several bills aim to address these concerns. Proposals include requiring data centers to disclose energy, water, and emissions data and mandating site assessments for noise and land impact. While these efforts gain support from environmental and agriculture groups, they face pushback from economic development advocates worried about Virginia’s competitiveness.
Governor Glenn Youngkin reaffirmed his support for the state’s data center dominance, emphasizing the importance of allowing localities to decide on data center development. Meanwhile, legislative debates continue over balancing economic growth and sustainability.
What to Do with Data Centers in Ohio?
Ohio lawmakers are in the early stages of negotiating an omnibus bill to revamp the state’s energy policies, with data centers playing a key role in the discussion. As demand for energy surges in parts of Ohio, leaders like House Speaker Matt Huffman emphasize the need for innovative energy generation and distribution to support growth.
Regulatory Proposals:
- The Public Utilities Commission of Ohio (PUCO) is considering a tariff requiring data centers to pay 90% of their projected energy usage monthly, even if actual consumption falls short.
- Governor Mike DeWine supports PUCO’s role in determining fair cost distribution, noting that questions of fairness and cost-sharing remain critical.
Tax Incentive Debate:
- Critics are challenging the state’s generous sales tax exemptions for data center construction. A bipartisan group, including Sen. Bill Blessing, is pushing to eliminate these incentives, arguing they disproportionately benefit large tech firms like Amazon, Google, and Microsoft while increasing electricity costs for all Ohioans.
- Left-leaning Policy Matters Ohio estimates that the tax breaks could cost the state and local governments $1.6 billion in lost revenue from recent projects.
- Right-leaning Buckeye Institute also supports removing these exemptions, advocating for lower tax rates that benefit both small businesses and large corporations.
While some lawmakers remain hesitant to antagonize the tech industry or Governor DeWine’s administration, Ohio’s tighter budget this cycle may bring more scrutiny to these policies. The debate highlights a growing tension between fostering tech industry growth and ensuring equitable energy and tax policies.
Bill to Aid Digital Gateway Landowners Advances
A bill addressing tax relief for Prince William Digital Gateway landowners cleared its first hurdle in the Virginia state Senate, advancing on a 13-2 vote. Introduced by State Sen. Jeremy McPike, SB 1305 proposes delaying tax assessments based on rezoning until legal challenges are resolved or the property is sold.
The legislation responds to landowners facing dramatically higher tax bills—some exceeding $300,000 annually—following the 2023 rezoning of 1,700 acres for 37 data centers near Manassas National Battlefield Park. McPike emphasized the need for fairness, pointing out similar policies in Fairfax and Orange counties.
Critics, including State Sen. Danica Roem, question the bill’s financial impact on Prince William County, which is owed $1.9 million in unpaid taxes from landowners disputing their assessments. McPike has received campaign contributions from data center and landowner interests, fueling further debate.
The bill now moves forward, with McPike predicting a strong chance of passage in the state Senate.
Read The Full Article at Prince William Times
Georgia Public Service Commission Shields Residents from Data Center Energy Costs
The Georgia Public Service Commission (PSC) has implemented revised energy rate structures to protect residential and small business customers from the financial impact of the substantial energy demands of data centers. Under the new rules, facilities consuming over 100 megawatts will be treated separately, bearing the full costs of power transmission and distribution.
This decision, unanimously approved by the PSC, follows increased scrutiny of data centers’ energy consumption, particularly with Amazon Web Services’ recent $11 billion investment in Georgia. With nearly 100 data centers already in the state, PSC Vice Chairman Tim Echols emphasized balancing Georgia’s business appeal with ensuring data centers pay their fair share of energy costs.
Longer-term contracts (up to 15 years) aim to stabilize energy infrastructure development while residential customers, who faced a 3.5% bill increase in January, are shielded from further strain. The upcoming 2025 Integrated Resource Plan will explore additional measures for optimizing data center energy usage.
Read The Full Article at Hoodline
Trump Plans to Use Emergency Powers to Fast-Track Power Plants for AI Data Centers
President Donald Trump has announced plans to accelerate the construction of power plants for co-located artificial intelligence (AI) data centers through an energy emergency declaration. Speaking at the World Economic Forum in Davos, Switzerland, on January 23, 2025, Trump emphasized his intention to bypass lengthy approval processes, stating, “I can get the approvals done myself without having to go through years of waiting.”
Key highlights include:
- A $100 billion investment from the Stargate Project—a joint venture by SoftBank, OpenAI, Oracle, and MGX—focused initially on a site in Abilene, Texas.
- Trump’s advocacy for co-locating power plants and data centers, including the use of coal-fired plants as backup.
- Alignment with Federal Energy Regulatory Commission (FERC) Chairman Mark Christie, who has supported co-location under specific conditions.
While proponents see this as a strategic move to strengthen AI infrastructure and compete globally, critics like Public Citizen warn of potential increases in utility costs, environmental impacts, and greenhouse gas emissions.
This development underscores the growing intersection of data infrastructure, energy policy, and environmental concerns, raising critical questions about balancing innovation with sustainability.
Read The Full Article at Utility Dive
Louisville Gas and Electric Partners With PowerHouse
Louisville Gas and Electric (LG&E) has partnered with PowerHouse Data Centers and Poe Companies to bring Kentucky its first hyperscale data center campus, a 400-megawatt project in Louisville. Supported by a new LG&E switch station and on-site substation, the first 130 MW will be available by October 2026, with construction starting this year. Enabled by Kentucky’s 50-year tax exemption for data centers, this project highlights Louisville’s appeal, offering affordable, reliable power, connectivity, water, and a business-friendly environment. The initiative positions Kentucky as a new player on the data center map.
