Now more states are following municipalities in blocking or restricting data center expansion, arguing they need more time to hear from voters, energy authorities, developers and environmental agencies before deciding whether and how to approve them, and what they require.
Efforts to halt the fast-moving infrastructure that supports the development of artificial intelligence have made their way onto various state legislative agendas in recent weeks, as well as into the national debate. While the caveats attached to the bans are wide-ranging, all forms of legislation buy time to discuss more about facilities’ water and energy use and the potential to raise local electricity costs.
The New York state policy proposal, introduced in early February by state Sen. Liz Krueger and Assemblywoman Anna Kelles, both Democrats, is considered one of the most aggressive in the United States. It seeks a three-year moratorium on proposed facilities larger than 20 GW and asks the state Department of Environmental Conservation to develop environmental impact requirements for gas, while the state Commission would study how to minimize the environmental impact of gas and electricity requirements.
“This is the time to pause and establish strong regulations that ensure New Yorkers are protected from the economic burden of high data center energy demands and minimize environmental damage from water, noise, light and air pollution,” Kelles said. The pause would also allow time for the state to pass data center regulations, a Krueger spokesman said.
New York’s independent system operator, which operates the state’s power grid, said it has 9.5 GW of proposed data center load in its interconnection queue, the main reason it is concerned about a capacity shortfall in the next five years. “There is no possible way that the new nuclear generation [or new gas generation] can address this issue in a relevant timeframe,” the spokesman said. Local approval of a large 450 MW facility at a former coal-fired power plant in the US state now faces litigation. Permits for more than 130 existing data centers in New York would not be affected.
But an opponent of the three-year moratorium, the New York-New Jersey Engineers Labor-Employer Cooperative, cites the impact of reduced work on members.
More Stateside Halts Eyed
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Similar proposals are moving in other states as well, including bipartisan action. In Oklahoma, Republican Sen. Kendal Sacchieri introduced a bill that would ban data center construction until the end of 2029 and direct the Oklahoma Corporation Commission to study water supply and electricity cost impact issues. In Florida, Gov. Ron DeSantis (R) proposed legislation in December with numerous development mandates “to protect Floridians from footing the bill for hyperscale AI data centers and to empower local governments to reject their development in their communities.”
Democratic Sen. Jaha Howard in Georgia introduced a one-year hiatus to listen to constituents’ concerns, while a bipartisan team in Maryland wrote legislation banning data centers in the state until new laws require them to be co-located with a power plant. “Data centers consume enormous amounts of energy. Maryland should not approve new massive energy users unless they provide or finance their own reliable energy generation,” said Kathy Szeliga, a state delegate who supports the bill. In Vermont, which has no industrial-scale data centers, legislation now in its House would set new siting and cost parameters for taxpayers, but a state Senate bill calls for a moratorium on construction until July 1, 2030.
Virginia, home to what has become the largest data center in the United States with some 568 operating facilities, joined a similar statewide move this year. A proposal would prohibit local governments do not grant final approvals for data center rezoning, special use permits, special exceptions and development plans, with more than 60 projects being considered. The House of Delegates of the State passed a bill earlier this month this would continue generous state tax breaks for existing and new data centers powered by renewable energy or transitioning from fossil fuels. But there are more legislative battles in the state.
Meanwhile, a state appeals court heard arguments Feb. 24 in a community lawsuit against the 27-building Digital Gateway project proposed by developers QTS and Compass. part of which abutted Manassas National Battlefield Park, a federally managed Civil War monument. The roughly 2,100-acre project, which is expected to generate $400 million in annual revenue for Prince William County, was approved in 2023 by its Board of Supervisors in what plaintiffs say is a rushed action.
Described as one of the largest data center complexes in the United States, it would also include 14 electrical substations and hundreds of diesel generators. The companies have not released details on energy use or commented on the project’s cost or demand, but environmental groups have calculated that it would need more than 2.9 GW to operate.
The energy demands of data centers are drawing attention as more and larger facilities are built. Data center need rose 9% last year, according to an analysis of federal data. A data center complex that Meta is building in Louisiana will consume more energy per day than all of New Orleans during a summer peak. The city council of that city enacted a one-year moratorium on the construction of the facilities this year.
But some states are against data center limitations. In an editorial of February 21, The Washington Post, owned by Amazon CEO Jeff Bezos, singled out Mississippi Gov. Tate Reeves (R), who he said in a social media post “offered a vigorous defense of data centers this week as essential to winning the AI race against China.”
Sanders: Federal moratorium?
Still, national attempts to address data center impact issues have also emerged: Sen. Josh Hawley, R-Missouri, and Sen. Richard Blumenthal, D-Conn., introduced legislation this month to require all data centers to supply their own power from off-grid sources. After a data center hiatus by Denver in February, Sen. Bernie Sanders (I-Vermont) also renewed his call for a “federal moratorium,” which Interior Secretary Doug Burgum immediately responded in a television interview that would be “capitulating to China,” while several Democrats also opposed it.
President Donald Trump, facing a setback from rising energy prices in some parts of the country, signaled in his State of the Union address last month that technology companies would sign a “pledge” to pay the energy costs of their data centers, though few implementation details have been released.
Energy Secretary Chris Wright said technology companies would also “advance some money to add additions to the grid,” he said. E&E news. Tech companies expanding AI infrastructure such as Microsoft, OpenAI and Anthropic have issued statements about covering the costs of network upgrades or preventing their infrastructure from increasing local utility costs, with reports of around $600 billion to be spent on data center expansion.
But some in Congress remain concerned that the pledges will not keep rising costs under control. “A handshake agreement with Big Tech on data center costs is not good enough,” Sen. Mark Kelly (D-Ariz.) told X. “Americans need assurance that energy prices won’t rise and that communities have a voice.”
Christopher Jordan, senior specialist in urban innovation at the National League of Cities, said municipal breaks allow municipalities to determine “what questions to ask,” especially related to the growing impacts on water supplies as hyperscale data centers have begun to cluster in water-scarce or drought-vulnerable regions. Westward expansion is where the data center “is congregating and the dollars are going,” Julien Dumoulin-Smith, managing director of power sector research at investment banker Jefferies Financial Group, said on Feb. 12. Barron’webinar s.
The moratoriums also provide an opportunity for governments to pass disclosure laws, which could create more information for other municipalities to draw on when evaluating proposed facilities. A better understanding of what the facilities can offer depends on projects being built with more transparent agreements, said Simon Wang, an economic mobility specialist at the National Community Reinvestment Coalition, a Washington, D.C.-based nonprofit network of about 600 community organizations focused on banking, housing and business equity.
But as different levels of government consider whether to encourage or limit data center development, policies may begin to conflict. “Some localities inadvertently bear the cost,” Jordan said. “Local communities feel the physical effects of this much more.”
