This week’s Zoning In update delves into the evolving regulatory and community landscapes shaping the data center industry. Among the headlines, Talen Energy is challenging FERC’s rejection of its interconnection agreement for a co-located Amazon data center at its Pennsylvania nuclear plant. This case could redefine how energy-intensive AI data centers partner directly with power plants, potentially reshaping the regulatory framework governing grid reliability and supply-demand balance. Meanwhile, in Georgia, the Public Service Commission has implemented new billing rules requiring large-load customers, such as data centers, to shoulder transmission and distribution costs. This move highlights the increasing need to balance growth in data center demand with equitable cost-sharing for grid expansion.
On the community front, tensions are evident in Spotsylvania County, VA, where officials are debating stricter zoning regulations for data centers to protect residential areas. Similarly, Leesburg, VA, denied a data center rezoning application linked to an affordable housing project, emphasizing concerns over noise and infrastructure impacts. In Michigan, new tax incentives for data center investments underscore the state’s ambitions to attract development, though local control and energy demands remain contentious issues. These stories reveal the complexities of fostering data center growth while navigating public pushback, sustainability goals, and regulatory hurdles, demonstrating the industry’s pivotal role in shaping energy and economic landscapes nationwide.
Talen Challenges FERC’s Amazon Data Center Rejection
Talen Energy is appealing a Federal Energy Regulatory Commission (FERC) decision that rejected its amended interconnection agreement for a co-located Amazon data center at Talen’s Pennsylvania Susquehanna nuclear plant. Co-location, an attractive option for powering AI data centers, allows massive energy delivery directly from power plants.
FERC denied the agreement in December, citing concerns about disrupting the regional power grid’s supply-demand balance. Talen’s petition to the U.S. Court of Appeals for the Fifth Circuit seeks a review of the rejection and a previously denied rehearing request. The outcome could either uphold FERC’s decision, overturn it, or send it back for further consideration.
Read The Full Article at Reuters
Georgia PSC Approves New Billing Rules for Data Centers and Large-Load Customers
The Georgia Public Service Commission (PSC) has introduced a new rule requiring large-load Georgia Power customers, including data centers using more than 100MW, to cover transmission and distribution costs associated with their projects. This move ensures existing customers aren’t burdened with additional costs stemming from these significant power demands.
Under the rule, new contracts with Georgia Power for customers exceeding 100MW must undergo PSC review. The regulation comes as Georgia Power projects state electricity demand to triple within the next decade, with data centers accounting for 34.6GW of expected demand in its 36.5GW development pipeline.
In response, Georgia Power has secured PSC approval to expand its energy generation, balancing fossil fuels and renewable sources, to address the surge in demand. Recent developments include Stream Data Centers’ new facility in Douglas County.
Read The Full Article at Data Center Dynamics
Virginia County Considers Data Center Regulations
Spotsylvania County, VA, is grappling with how to regulate its booming data center industry. While the county has already approved Amazon-related data center projects spanning 10 million square feet on over 1,000 acres, officials are working on updates to zoning ordinances to manage future development better.
The Board of Supervisors voted 4-3 to require special-use permits for data centers in commercial, agricultural, and industrial districts, but this decision is not yet final. It will undergo public hearings and recommendations from the Planning Commission.
County officials are exploring regulations such as limiting permitted zoning areas, increasing buffer zones, and addressing landscaping, noise, and utilities. Supervisor Lori Hayes emphasized the importance of protecting residential areas with robust buffers, noting Amazon’s 200-foot buffers as a “gold standard.”
Read The Full Article at GovTech
Cedar Rapids Data Centers Will Help Enable Five-year Rate Freeze
Alliant Energy CEO Lisa Barton highlighted the transformative impact of data center developments during her keynote at the Cedar Rapids Metro Economic Alliance’s annual meeting on January 28, 2025. She credited projects like the $750 million QTS facility and the $576 million Google data center at the Big Cedar Industrial Center with enabling Alliant to establish a five-year freeze on electrical rates, a move made possible by investments in a resilient, sustainable energy infrastructure.
Ms. Barton emphasized that these developments position Cedar Rapids as a burgeoning technology hub, spurring not only construction jobs but also broader economic growth and a strengthened tax base. She noted the critical role of data centers in attracting ancillary businesses and supporting community vitality.
Alliant’s efforts also address key global challenges, including energy demand, geopolitical issues, and sustainability. By focusing on affordability, reliability, and resiliency, the utility aims to balance competing priorities in partnership with local communities.
Read The Full Article at Corridor Business
Leesburg Council Denies Oaklawn Data Center Rezoning
In a heated public hearing on January 28, the Leesburg Town Council rejected the rezoning application for a proposed 450,000-square-foot data center in the Oaklawn neighborhood, tied to an adjacent 184-unit affordable housing project by Good Works LP. Despite exceeding local zoning requirements and modifications to address concerns—including extended setbacks and enhanced berms—the project faced overwhelming opposition from Stratford community residents and environmental advocates.
Key concerns included noise pollution, the potential addition of a substation, and the broader impact on Leesburg’s character and infrastructure. Council members acknowledged the challenges of balancing community opposition with the benefits of affordable housing but ultimately voted 5-1-1 to deny the application.
Read The Full Article at Loudon Now
Tech Lobby Expands Influence in Utility Regulation
Big Tech giants like Google, Amazon, and Microsoft are increasingly influencing utility regulation, which is traditionally dominated by electric utilities. At the National Association of Regulatory Utility Commissioners (NARUC) annual meeting, these hyperscalers showcased their expanding role, driven by the energy-intensive needs of AI-powered data centers.
Key takeaways:
- Energy Demands: Data centers now require electricity equivalent to small cities, with U.S. power demand projected to triple by 2030. For example, Meta’s planned Louisiana facility will need 2,500 megawatts.
- Utility Investments: Utilities face $60 billion in grid upgrades by decade’s end, raising questions about who bears the costs and risks—utilities, tech companies, or consumers.
- Carbon-Free Goals: Companies like Google emphasize sustainability, proposing innovative solutions such as geothermal energy and exploring technologies like small modular nuclear reactors to meet carbon-free electricity goals.
Challenges include balancing grid reliability, cost concerns, and regulatory debates over tariffs and infrastructure investments. Recent disputes in Ohio and proposals like Google’s Clean Transition Tariff in Nevada highlight tensions between hyperscalers and traditional utilities.
Read The Full Article at EENews
Reno City Council Denies Webb Data Center Appeal Amid Controversy
The Reno City Council has rejected an appeal against the Webb Data Center project following a series of contentious meetings. The project, represented by former City Manager Doug Thornley, sparked an ethics complaint and accusations of impropriety. Thornley was accused of leveraging personal relationships and insider knowledge to benefit himself and his clients. The situation also led to a council member calling for a planning commissioner’s termination, further intensifying the controversy.
Read The Full Article at This Is Reno
Private Equity to Fuel Data Center Growth, But Regulatory Risk Grows
A new global outlook from Moody’s predicts a surge in data center capacity in 2025, driven by AI, cloud computing, and data storage. Hyperscalers like Microsoft, Amazon, Google, Meta, and Oracle dominate expansion, with preleased projects ensuring financial viability. However, developers and landlords face rising leverage as private equity, loans, and bonds are essential to meet growing demand. Financing will also be needed for critical utilities, with projected investments of $2.5 trillion through 2028.
Amid expansion, challenges like securing water, power, and telecommunications are intensifying public scrutiny. Regulatory risks are growing as states like Virginia and Ohio evaluate electricity use and economic impacts, while countries like Spain and Ireland consider stricter regulations for high-consumption AI projects. Developers must carefully navigate these hurdles to succeed in the evolving data center landscape.
Read The Full Article at GlobeSt.
Addressing Data Center Noise Challenges
Behrens & Associateshas expanded its services to tackle growing concerns about noise from data centers. Specializing in acoustical consulting and turnkey noise mitigation solutions, BAENC helps developers and operators comply with noise regulations and maintain positive community relations.
Key offerings include:
- Pre-construction Acoustic Studies: Identify potential noise issues and design solutions early.
- Custom Noise Mitigation Solutions: Developing acoustic barriers and enclosures for cooling systems, generators, and HVAC equipment.
- Post-construction Noise Resolution: Addressing complaints with on-site assessments and tailored fixes.
Environmental Concerns Over Rooftop Solar and Data Centers in Georgia
In Georgia, environmental advocates are raising alarms about the state’s lack of distributed rooftop solar and the rapid growth of energy-intensive data centers. At a press conference hosted by Georgia Conservation Voters (GCV), Executive Director Brionte McCorkle highlighted Georgia’s poor national ranking (38th) in small-scale solar generation despite being a leader in utility-scale solar. This is largely attributed to Georgia Power’s opposition to net metering, which disincentivizes businesses and residents from installing solar panels. Proposed legislation like the Georgia Homegrown Solar Act aims to address these barriers by promoting community solar initiatives.
Concerns also extend to the rapid expansion of data centers, which currently consume 1,600 MW of energy — equivalent to powering 720,000 homes. With additional projects in the pipeline, demand could reach 4,000 MW. Legislators are introducing bills to prevent the financial and environmental costs of grid expansion from falling on ratepayers, pause tax breaks for data centers, and explore cleaner energy options. Advocates are calling on Georgians to engage with lawmakers and groups like GCV and the Sierra Club to push for legislative change.
Read The Full Article at Macon.com
Michigan’s Data Center Push Highlights Challenges in Energy, Land Use, and Local Control
Michigan is positioning itself as a competitive hub for data center development by extending tax incentives through Senate Bill 237, signed by Governor Gretchen Whitmer on December 31, 2024. The bill provides tax exemptions for operators investing $250 million or more and offers extended benefits for facilities built on brownfield or former industrial sites, with a requirement for Green Building Initiative certification.
However, challenges loom in balancing data centers’ massive energy demands with Michigan’s renewable energy goals. As a cautionary example, Virginia has faced struggles to meet power needs while pursuing clean energy transitions, signaling potential difficulties for Michigan.
Land use and local control are also key hurdles. Michigan recently centralized renewable energy project approvals under the Michigan Public Service Commission via Public Act 233, sparking lawsuits from over 70 townships opposing the diminished local authority. The outcome of these legal battles will shape how the state manages competing interests between development, community values, and environmental goals.
Michigan’s strategy underscores the complex dynamics of fostering digital infrastructure while balancing energy and local challenges with broader implications for the nation’s data center growth.
Read The Full Article at Dalton
What’s Next for Coal-Fired Power Under Trump?
Recent developments suggest coal-fired power plants may see extended lifespans due to surging electricity demand and support from the White House. PacifiCorp’s latest Integrated Resource Plan proposes coal use until at least 2045, with some plants considering retrofits or co-firing strategies. This mirrors delays in coal plant retirements nationwide as utilities like Alliant Energy and Madison Gas and Electric push timelines further to address grid reliability challenges driven by AI data centers, manufacturing, and electrification.
President Trump’s recent executive orders prioritize fossil fuel development by streamlining permitting and rolling back renewable energy policies. While the administration promotes coal as a reliable energy source for growing AI infrastructure, experts argue its long-term viability is limited due to market trends favoring natural gas and renewables.
Despite temporary reprieves, the economic competitiveness of coal continues to decline, with utilities stockpiling unused reserves. As the U.S. holds vast coal resources, questions remain about its role in meeting future energy demands sustainably.
