Welcome to this week’s edition of Zoning In!
In Virginia, lawmakers are at odds over extending tax breaks for data centers through 2050. While some push for long-term incentives to keep Virginia competitive, others want to tie them to energy efficiency mandates. Meanwhile, due to rising electricity demands, Indiana is facing calls for a moratorium on new hyperscale developments. Texas is grappling with power shortages as it attracts massive AI-driven data center investments. California, too, is stepping in with proposed legislation requiring greater transparency in energy use and efficiency standards for data centers.
Local communities are also weighing in, as rezoning debates in Pittsboro, Indiana, and Pittsylvania County, Virginia, highlight concerns over environmental impact, infrastructure strain, and economic trade-offs. Meanwhile, government leaders in Georgia defend data centers as critical revenue drivers despite growing public resistance.
Virginia Data Center Tax Breaks Head to Conference Committee
Virginia lawmakers are debating the future of data center tax incentives, with over $1 billion in tax breaks already granted over the past decade. Delegate Terry Kilgore (R-Scott County) is pushing to extend these incentives through 2050, arguing that Virginia must remain competitive against states like Ohio, Indiana, and Georgia. While Loudoun and Prince William counties may resist further data center growth, Kilgore sees an opportunity for Southwest Virginia.
However, concerns about the energy demands of data centers have prompted Senator Creigh Deeds (D-Charlottesville) to propose tying the tax breaks to energy efficiency requirements. Deeds warns that data centers are driving massive energy consumption, and infrastructure costs could be passed to consumers without efficiency measures.
House and Senate leaders will negotiate these competing priorities in a closed-door budget conference committee. Stay tuned as Virginia’s data center policy hangs in the balance.
Community Concerns Over Pittsboro Data Center Rezoning
A proposed data center in Pittsboro, Indiana, faces community pushback as Vantage Data Centers seeks to rezone 618 acres, with 285 acres designated for development. Residents near the Charles D. Smith Family Farm, the proposed site, have raised concerns about environmental impact, water usage, and property values.
At a recent meeting, locals expressed frustration over a lack of transparency, particularly regarding the potential effects on well water and land value. While data centers typically require large amounts of water for cooling, Pittsboro officials state that Vantage plans to use air-cooled systems, reducing water demand. The project will connect to town utilities, avoiding temporary wells or septic systems. Vantage has committed to planting mature trees for visual and noise mitigation.
Despite assurances, some residents remain skeptical, believing town officials prioritize economic benefits over community well-being. As Pittsboro considers the rezoning request, the debate highlights ongoing tensions between data center expansion and local land use concerns.
Read The Full Article at NewsBreak
Indiana Advocates Push for Data Center Moratorium Over Rising Energy Demand
Consumer and clean energy advocates in Indiana are calling for a pause on new hyperscale data centers, citing concerns over surging electricity demand and its impact on the grid and utility bills. A recent report projects that Indiana’s data centers could consume more power within a decade than the state’s entire population. This has spurred utilities and lawmakers to expand natural gas-fired generation and consider small modular nuclear reactors, despite concerns over costs and untested technology.
Indiana’s appeal for AI-driven data centers includes access to fiber networks, affordable land, and dual-grid connectivity via PJM and MISO. Tech giants like Microsoft, Amazon, Google, and Meta have announced developments, though clean energy commitments remain vague. Utility filings indicate gigawatts of new fossil-fuel generation to meet anticipated demand. Advocates argue for a moratorium to study the long-term impact before providing further subsidies to major tech firms, emphasizing the need for a balanced, sustainable approach.
Read The Full Article at Canary Media
Electricity and Water Are Required To Run Data Centers. Texas Is Running Short on Both.
With billions in funding and political backing from the Trump administration, Texas is rapidly becoming a hub for AI data centers through the Stargate initiative. The $500 billion national effort, led by OpenAI, SoftBank, and Oracle, has already funneled $100 billion into the Lone Star State, with massive data center campuses under development.
However, Texas faces major infrastructure challenges. The state’s electric grid, managed by ERCOT, is already struggling to keep up with soaring demand, with projections of a shortfall as early as 2027. State legislators are concerned about the grid’s ability to sustain rapid data center expansion without jeopardizing overall reliability.
Texas has long been attractive for data centers due to its cheap land, energy incentives, and tax breaks, but with energy demand expected to double within six years—largely driven by AI and cryptocurrency—leaders warn of potential power shortages. Lt. Gov. Dan Patrick supports AI investment but stresses the need for a strategic approach to avoid an unsustainable “Wild West” boom that could crash the grid.
For local communities, the impact of these data centers remains an under-the-radar issue, but as Texas continues to cement its position as a global AI infrastructure leader, the stakes for energy stability and sustainability are rising.
Read The Full Article at Dallas Observer
California Lawmakers Target Data Center Power Consumption
With California residents paying the highest electricity prices in the continental U.S., lawmakers are turning their attention to data centers as a growing factor in rising energy costs. New bills propose requiring data centers to disclose energy use, setting efficiency standards, and creating a dedicated rate structure to ensure Big Tech, not consumers, covers infrastructure costs. Similar measures are being explored in Virginia, Texas, and Oregon, reflecting a nationwide shift toward regulating data center power consumption.
Researchers warn that unchecked expansion could drive up electricity bills, contribute to pollution, and even impact housing costs. Meanwhile, the federal government is accelerating data center development, creating a potential conflict between local regulation and national priorities.
As more states push for energy accountability in data center growth, California’s approach could set a precedent for balancing sustainability, economic development, and consumer protection.
Read The Full Article at Folsom Times
Unlocking Tax Incentives for Data Centers Across the U.S.
As the demand for AI and cloud services accelerates, data center developers are turning to state and local tax incentives to reduce costs and drive growth. Windham Brannon looks Across the U.S. to highlight what jurisdictions are offering benefits in several key areas:
Property Tax Incentives – Tax abatements that reduce or defer property taxes based on investment size and job creation.
Sales & Use Tax Incentives – Exemptions on high-tech equipment purchases to lower capital costs.
Electricity Tax Incentives – Reduced rates on energy consumption to offset operational expenses.
Investment Tax Credits – Financial incentives for businesses meeting specific investment and employment thresholds.
Several states stand out with competitive programs:
Georgia: Full sales and use tax exemption on data center equipment for businesses meeting investment and job creation requirements.
Tennessee: Exemptions on critical cooling and power infrastructure, plus a reduced electricity tax rate of 1.5% for qualified operators.
As tax policies continue to evolve, understanding and leveraging these incentives can provide a crucial competitive edge.
For a deeper dive into state-by-state tax programs, visit
Virginia Lawmakers Push Taxpayer Funds for Natural Gas Projects
Virginia legislators are proposing to allocate $22 million in state funds to expand natural gas infrastructure, benefiting both a potential data center project in Pulaski County and chicken processing plants on the Eastern Shore.
- Pulaski County Investment: The House budget plan includes $15 million for infrastructure improvements, including roads and natural gas pipelines, to support a proposed $3 billion data center and power plant. Details on the project remain scarce, with local representatives unaware of specifics.
- Eastern Shore Expansion: Del. Rob Bloxom (R) is advocating for $7.4 million to extend natural gas pipelines from Maryland into Accomack County. This would serve Perdue and Tyson chicken plants and NASA’s Wallops Flight Facility. Supporters argue this investment is critical for maintaining jobs and reducing energy costs.
- Economic vs. Environmental Debate: The proposal has sparked controversy, with proponents citing economic development and job retention, while environmental advocates, including the Chesapeake Climate Action Network, argue that taxpayer dollars should not fund new fossil fuel infrastructure. Critics point to Virginia’s Clean Economy Act, which aims to decarbonize the state’s grid, and warn that new gas projects could hinder long-term climate goals.
- Data Center Energy Demands: As Virginia continues to lead the data center industry, concerns over high energy consumption and strain on the power grid persist. Supporters of natural gas claim it offers reliability compared to renewables, while opponents push for greater investment in wind and solar alternatives.
With the budget proposal under final negotiations, the decision will ultimately rest with Gov. Glenn Youngkin, a known proponent of natural gas alongside renewables. The outcome could set a precedent for how Virginia balances economic growth with energy policy in the data center sector.
Read The Full Article at Inside Climate News
Virginia Subcommittee Tables Bill Impacting Digital Gateway Landowners
A Virginia House of Delegates subcommittee voted 6-2 on Feb. 14 to table Senate Bill 1305, which aimed to prevent landowners from being taxed at higher data center zoning rates until legal challenges were resolved or the property was sold. Sponsored by Sen. Jeremy McPike (D-29th District), the bill would have directly impacted Prince William Digital Gateway landowners, whose taxes have skyrocketed following a rezoning decision in December 2023 allowing up to 37 data centers on 1,700 acres.
During the hearing, landowners expressed frustration over the increased tax burden, with one resident, Jon Brower, stating his family’s taxes jumped from $5,300 to over $728,000 annually. Another landowner, Mary Ann Ghadban, warned of potential bankruptcies as a result of the tax hikes.
Opposition came from State Sen. Danica Roem (D-30th District), who has consistently opposed the Digital Gateway project and raised concerns about setting a precedent for legislative involvement in tax disputes. The subcommittee opted to delay action until the Virginia Department of Taxation provides further guidance, with plans to revisit the issue in next year’s legislative session.
Read The Full Article at InsideNoVA
Pittsylvania County Data Center Debate Intensifies
A proposed data center in Pittsylvania County sparked heated debate at a recent board of supervisors meeting, despite not being on the agenda. The project, led by Balico, involves rezoning nearly 750 acres in the Chalk Level community from residential and agricultural use to heavy industrial. The plan is a scaled-down version of an earlier proposal that included a 3,500-megawatt natural gas power plant.
Eighteen residents spoke during the public comment period, with opinions split. Supporters, primarily from the town of Hurt, highlighted potential benefits, including a new water treatment facility and expanded municipal water access. Opponents voiced concerns over environmental impact, noise, and the project’s proximity to a historic church.
Balico announced a delay in the rezoning request until March 18 to allow for further community outreach, including the launch of a website and Facebook page. The final decision now rests with the Pittsylvania County Board of Supervisors.
Read The Full Article at GodanRiver
Like ’em or not, data centers bring revenue, government leaders say
At the South Metro Development Outlook Conference, government and business leaders discussed the economic impact of data centers in South Metro Atlanta. With AI investments projected to hit $320 billion in 2025, data center demand is surging, contributing significantly to local tax revenue.
Key Takeaways:
- Economic Boost: The QTS Data Center in Fayetteville generated over $1 million in property taxes in 2024, compared to just $31,000 when the land was county-owned in 2016.
- Douglas County Strategy: Officials recognized data centers as a revenue source in 2011, now hosting five facilities with plans for ten by 2028.
- Infrastructure & Power Demand: Georgia Power anticipates 8,000 MW of load growth over six years, fueled by AI expansion and increasing electric vehicle use.
- Community Pushback: Some residents oppose further data center development, favoring mixed-use projects. In Union City, opposition to rezoning for data centers was overridden by a split City Council vote, with the mayor casting the deciding vote.
- Diversification Efforts: Douglas County is now prioritizing healthcare, life sciences, and fintech to balance development.
While data centers remain controversial, leaders emphasize their role in economic development, underscoring the challenge of balancing industry growth with community preferences.
Read The Full Article at Saporta Report
FERC Reviewing Data Center Colocation With Power Plants in PJM
The Federal Energy Regulatory Commission (FERC) has directed PJM Interconnection to assess whether new rules are needed to facilitate data center construction adjacent to power plants. According to a recent show-cause order, FERC found that PJM’s tariff does not clearly define the rates, terms, and conditions for such colocation arrangements. The lack of clarity may hinder generators and data center operators from properly structuring these agreements. PJM has 30 days to respond to FERC’s request.
This review highlights the growing intersection of energy infrastructure and data center development, particularly in high-demand regions. Stay tuned for further updates.
