This week’s Zoning In explores how rising data center demand is shaping energy policy, regulation, and community pushback nationwide. In Georgia, Georgia Power is reversing course on coal plant closures, citing surging data center-driven energy needs, while in Arizona, utilities are considering new nuclear plants to keep up with demand. Meanwhile, in Virginia, a proposed AI regulation bill could increase costs and potentially deter tech investment, impacting the state’s dominant data center market.
At the local level, tensions are rising over zoning and infrastructure. Farmers in Washington are protesting a new transmission line, and Virginia counties are tightening data center regulations amid concerns over land use and energy strain. In New York and Halifax County, proposed data center projects face stiff community opposition.
Georgia Power Walks Back Coal Closures Amid Rising Data Center Demand
Georgia Power has reversed its plan to retire coal plants, citing an unexpected surge in energy demand, primarily driven by data centers. The company’s 2025 Integrated Resource Plan (IRP) forecasts an 8,200-megawatt increase in demand by 2030-31—well beyond prior estimates. While the plan includes renewable energy and nuclear upgrades, it extends coal plant operations, drawing criticism from environmental advocates who argue the move prioritizes profits over public health and sustainability. The proposal will undergo a months-long review by the Georgia Public Service Commission, with stakeholders questioning the accuracy of Georgia Power’s demand projections, especially in light of aggressive state competition to attract data centers.
Read The Full Article at Wabe.com
Virginia AI Bill Could Drive Up Costs, Threaten Tech and Data Center Growth
A proposed Virginia bill, HB2094, aims to regulate “high-risk” AI systems to prevent algorithmic discrimination. Critics argue it could stifle innovation and impose severe compliance costs. The Virginia Institute for Public Policy (VIPP) warns that the legislation could drive away AI investment, as small businesses may face costs up to $500,000 annually, while large corporations could exceed $10 million.
Beyond AI, the bill could have significant implications for Virginia’s data center industry, which supports 74,000 jobs and contributes $9.1 billion to the state’s GDP. Virginia risks losing its competitive edge with states like Indiana and Tennessee, which are courting AI investment with business-friendly policies. VIPP urges the state to reject HB2094 and promote AI growth through balanced, responsible regulation.
This highlights yet another case where regulatory uncertainty could impact Virginia’s data center ecosystem—something to watch as AI and infrastructure policies evolve.
Read The Full Article at Augusta Free Press
Virginia’s Rapid Data Center Growth Faces Possible Speed Bumps
Virginia, home to over 450 data centers, continues to attract investment due to its strategic location, fiber connectivity, and access to clean energy. However, growing concerns over infrastructure strain, zoning restrictions, and potential legislative changes could impact future development.
Key challenges include:
- Infrastructure & Energy Demands: Lawmakers are considering bills requiring data centers to cover their distribution costs and report energy and water usage. The Virginia State Corporation Commission is also exploring new policies on cost allocation, exit fees, and curtailment conditions.
- Zoning & Land Use Restrictions: Local governments, like Fairfax and Loudoun counties, are tightening zoning regulations, requiring greater setbacks, noise studies, and limiting by-right development. Statewide proposals aim to restrict data centers near historic sites and residential areas.
- Sales Tax Exemptions: Virginia’s current tax incentives for data centers, worth nearly $1 billion annually, are set to expire in 2035. Lawmakers are exploring potential modifications, which could impact future growth.
As scrutiny intensifies, data center operators must stay proactive in navigating regulatory changes to ensure continued investment and sustainable expansion in Virginia.
Read The Full Article at Bloomberg Law
Grant County, Washington Farmers Protest Planned 230-kilovolt Transmission Line
Grant County, Washington, farmers are protesting a planned 230-kilovolt transmission line by the Grant County Public Utility District (PUD), arguing it unfairly impacts private landowners while bypassing public lands due to bureaucratic delays. The $40 million, 31-mile project will run between Wanapum Dam and Quincy, a data center hub, affecting 34 homes and 449 acres of farmland. Farmers argue that alternative routes crossing public wildlife areas would have reduced agricultural impact and been cheaper but were dismissed due to lengthy permitting processes.
The PUD insists the chosen route is necessary to meet increasing power demands from Quincy’s growing population and data center industry. Farmers, however, claim they were not adequately informed, and a petition with 145 signatures opposes the project. Concerns include disruption to irrigation, hay stacking, aerial spraying, and expansion plans. The PUD maintains it will offer fair market prices for the land, with condemnation as a last resort. Construction is set to begin in 2027, with completion by late 2028.
Read The Full Article at Capital Press
FCC’s New Subsea Cable Regulations and Potential Data Center Impact
The FCC, under new Chairman Brendan Carr, is set to overhaul submarine cable regulations for the first time since 2001, consolidating power from Team Telecom. The proposed changes include stricter compliance reporting, shorter license terms, and expanded oversight of subsea infrastructure, with potential implications for inland data centers.
Legal experts warn these regulations could delay projects and increase costs, particularly in a high-interest rate environment. Politically, the move has bipartisan support, though the Republican-led FCC may enforce stricter measures, especially regarding China’s involvement. Carr is expected to pressure U.S. allies to adopt similar regulations, further fragmenting global internet infrastructure.
For data centers, this shift could mean increased FCC scrutiny, offering a regulatory foothold where there was previously little oversight. Hyperscalers may push back against potential overreach as the FCC moves to extend its influence into the data center sector.
Read The Full Article at TotalTele.com
Data Center Moves to City Council After 3-1 Planning and Zoning Vote
Eloy’s Planning and Zoning Commission has approved a data center proposal for a 122-acre site at North Estrella Road near the Union Pacific Railroad, advancing the project to the City Council. The planned 400MW facility, expected to create 100 permanent jobs and 4,800 construction jobs, is being developed by Ryan Companies.
Despite support, concerns over water usage were raised, with Chairperson Conrad Tolson voting against the proposal, citing the region’s water scarcity. Conditions were placed on the project, limiting average daily water use to 250,000 gallons, with peak demand capped at 875,000 gallons.
The proposal now moves to the Eloy City Council for consideration on February 10.
Read The Full Article at Michigan Public
Halifax County, VA Rejects Small-Scale Data Center Zoning Change
The Halifax County Board of Supervisors unanimously voted against amending the zoning ordinance to allow small-scale data centers in agricultural-zoned districts. The request, submitted by Harry Irvine of Partly Cloudy Consulting, LLC, sought approval for a 10-by-16-foot retrofitted shed to house IT equipment.
County officials noted that data centers are currently only permitted in industrial zones, and there is no official definition for “small-scale data center” in the county’s zoning code. Concerns were raised about potential expansion, energy consumption, and broader implications of rezoning agricultural land.
During public comments, a local farmer opposed the change, warning that opening the door to data centers in agricultural zones could lead to widespread land development, as seen in neighboring Mecklenburg County. Citing the economic and cultural importance of agriculture, he urged the board to preserve farmland for future generations.
This decision highlights ongoing tensions between rural land use preservation and data center expansion in local zoning policies.
Read The Full Article at YourGV.com
Data Center Proposals Face Opposition in New York
At a heated public hearing in Alabama, NY, residents voiced strong opposition to proposed data centers at the Western New York Science & Technology Advanced Manufacturing Park (STAMP). Community members argued that the developments pose risks to the public good, citing concerns over environmental impact, water usage, and potential tax incentives. The Genesee County Economic Development Center (GCEDC) defended the proposals, emphasizing economic benefits and job creation. However, local resistance highlights growing skepticism toward data center projects, echoing similar pushback seen in communities nationwide.
Read Full Article at Daily News Online
Washington Governor Signs Data Center Executive Order
Executive Order 25-05, signed by Washington Governor Bob Ferguson on February 3, 2025, establishes a Data Center Workgroup to examine the impacts of data centers on the state’s economy, tax revenue, energy use, and the environment. The Workgroup will be led by the Department of Revenue and include representatives from various state departments, utilities, environmental groups, labor organizations, and industry stakeholders. The Workgroup’s objective is to balance industry growth with tax revenue needs, energy constraints, and sustainability efforts. It is tasked with submitting its findings and policy recommendations to the Governor by December 1, 2025. The order emphasizes the importance of ensuring Washington remains a leader in technology and sustainability while considering the environmental and energy challenges associated with data centers.
Utility Companies Propose New Nuclear Plant in Arizona
Arizona’s three largest utilities—Arizona Public Service (APS), Salt River Project (SRP), and Tucson Electric Power (TEP)—have announced plans to explore expanding nuclear power generation in the state. This effort, led by APS, focuses on small modular reactors, which are gaining global attention. The utilities aim to diversify energy sources to meet growing power demands, considering both small and larger reactors at various sites, including locations where coal plants have closed or will be retired.
Arizona already produces nuclear power from the Palo Verde Generating Station, one of the largest nuclear plants in the U.S., but the state needs more energy due to rising demand from residents and industries like data centers. Along with nuclear, utilities are also investing in solar, wind, hydropower, and natural gas plants to address energy needs.
Read The Full Article at AZCentral
Data Center Incentives in the Age of AI
The demand for data centers has surged due to the rise of AI and edge computing, prompting urban areas to compete for development traditionally aimed at rural locations. As AI requires low-latency data processing, cities are increasingly attractive for data centers, offering faster service and better data transmission.
Evolution of Site Selection
Historically, data centers were sited in rural areas to avoid the risks associated with centralized infrastructure in urban centers, a shift driven by the aftermath of 9/11. States like Iowa and Nebraska introduced incentives to stimulate rural development.
Incentive Programs
Over 30 states offer data center-specific incentives, such as tax exemptions, utility discounts, and job creation credits. New Jersey and Michigan have recently expanded or introduced new programs targeting AI-driven data centers. Some states, like Oregon and Delaware, offer inherent tax advantages without specific data center legislation.
New Jersey’s Incentive Program
The Next New Jersey Program – AI offers transferable tax credits to businesses investing in AI data centers, with potential benefits up to $250 million. Eligibility requires substantial job creation (100+ full-time employees), high salaries (120% of county median), and a minimum capital investment of $100 million.
Michigan’s Enhanced Incentives
Michigan has extended tax exemptions for data centers, including those on brownfield sites, until 2050, with possible extensions until 2065. To qualify, data centers must invest $250 million in digital infrastructure and create at least 30 high-paying jobs.
Future of Data Center Incentives
As urban areas vie for AI-related development, incentives are evolving to ensure significant investment and job creation. This competition could intensify as states aim to capitalize on data centers as key drivers of economic growth.
Read The Full Piece at Eisner Amper
Why Data Centers and Nuclear Plants Can’t Just ‘Go It Alone’
In his opinion piece, Mike Jacobs from The Union of Concerned Scientists highlights the interconnectedness of systems and the importance of collaboration in solving complex energy challenges. He draws from a personal experience during a power outage to illustrate how reliance on individual solutions, like small generators, can fall short in addressing larger issues. He applies this lesson to the debate over whether data centers should bypass the grid and co-locate with nuclear power plants.
Jacobs argues that while nuclear power plants and data centers might seek to avoid the costs associated with grid infrastructure, both rely on the larger grid’s ability to handle fluctuations in supply and demand. Data centers, with their rapid energy usage shifts, and nuclear plants, which are not designed to match this variability, cannot function effectively without the broader grid. The complex nature of the economy and energy systems requires a collective approach, with interconnected technologies ensuring stability and resilience. Jacobs stresses the need for a governance model that balances innovation with the responsibility to avoid imposing risks on consumers.
