An aerial view shows a data center situated near single-family homes in Stone Ridge, Va., last year. Local communities around the country are seeking more input on where and how data centers are built. (Photo by Nathan Howard/Getty Images)

When local activist Frank Arcoleo found out over the summer that a data center was coming to his neighborhood in Lancaster, Pennsylvania, he said he was furious. There’d been no votes or public hearings.

The first phase of the data center project under development there only required administrative approval from a few city officials, based on the building permit application and state laws.

“So these data centers are going in, and guess what? The public gets nothing to say about it because the city’s already approved it,” Arcoleo said.

Now, Arcoleo is backing a zoning ordinance under consideration by the Lancaster City Council that aims to ensure residents have a say in the future. The ordinance would require data center projects to undergo a special exception hearing from the city’s zoning hearing board. It would also require data centers to adhere to the city’s noise ordinance and for developers to submit a report detailing the project’s planned electricity and water use for the city to review.

Similar efforts are underway across the country, as municipalities move quickly to enact ordinances about where and how data centers are built. A few communities have turned to ballot measures or lawsuits.

But at the same time, some state lawmakers are rushing to pass legislation that would accelerate the development of data center infrastructure.

More data centers are being built nationwide to meet the demand for digital services, including power-hungry artificial intelligence systems. Data centers, which house thousands of servers, are able to store and transmit the data required for internet services to work.

The facilities support a digital society and can provide increased tax revenue. Data center advocates argue they also can bring new jobs and other benefits for states and local communities. But residents and local leaders in several localities across the country — including cities in Delaware, Georgia, Kentucky, Michigan, Mississippi, New Mexico, Tennessee, Virginia and other states — are concerned about how the facilities could drive up utility bills and harm the environment.

Lancaster’s residents, including Arcoleo, are worried about the amount of energy required to power data centers — which could drive up electricity rates for the entire city, he said.

“Data centers alone will cause dirty electricity sources — coal-fired plants, diesel-fired plants, natural gas-fired plants — that were due to come offline to stay online because we need every kilowatt of power that exists,” said Arcoleo, a member of the progressive advocacy group Lancaster Stands Up. “That affects me too because it ruins my environment.”

But Pennsylvania’s governor has been working to bring more data centers to the state. In June, Democratic Gov. Josh Shapiro announced that Amazon was planning to invest at least $20 billion to build data center campuses across Pennsylvania — the largest private sector investment in state history. He’s also pushing proposals to encourage more energy production in the state, which would supply data centers. But critics say parts of his plan would sideline local officials.

‘This is moving so quickly’

Data centers require a great deal of electricity to run, which some state officials worry will drive up electricity demand — and utility bills.

Many data centers also require significant amounts of water to cool their servers. Large data centers can consume up to 5 million gallons of water per day — equivalent to the water use of a town of 10,000 to 50,000 people, according to a report from the Environmental and Energy Study Institute, a nonprofit that provides educational resources to policymakers and the public.

Local leaders and advocates across the country are weighing the potential outcomes in their community. In August, Starwood Digital Ventures submitted plans to New Castle County, Delaware, for a data center project that could consume as much power as 875,000 to almost 1 million homes — nearly twice the 449,000 housing units that exist in the state, according to Spotlight Delaware.

Amazon pulls Louisa County data center proposal after strong resistance

The proposed data center sparked strong opposition from residents at a July town hall, including state House Speaker Melissa Minor-Brown, a Democrat, who organized the event. New Castle County Councilman David Carter was already working on an ordinance that would put up guardrails for data center development in the area.

Under the proposed ordinance, data centers could not be built within 1,000 feet of any residential zoning district. Developers would also be required to coordinate with state regulators to ensure enough water is available to cool the facility’s servers. The ordinance also outlines a decommissioning process for data centers that are no longer in use.

“Most of these concerns are things you can manage and plan for, but this is moving so quickly that I think across the country, most jurisdictions are playing catch-up for their codes to best manage these data centers,” Carter told Stateline.

Currently, Virginia leads the country in data center development. In the absence of state laws, Virginia’s localities began to make their own data center rules.

Earlier this year, local leaders in Loudoun County, Virginia, which has one of the highest concentrations of data centers in the world, amended the county’s zoning ordinance to require data center proposals to go through a public hearing process and get approval from the Board of Supervisors.

Loudoun County officials are looking forward to new data center bills coming out of next year’s legislative session, said Michael Turner, vice chair of the Board of Supervisors. But he added that decisions regarding data center development should ultimately be left to localities.

“The decision for how local communities can use their land has to be left to the local communities,” Turner said. “But there’s no question: There’s rising tension between local community government, and state and federal government, as this high demand for both data and energy is continually rising.”

Meanwhile, Virginia Republican Gov. Glenn Youngkin vetoed a bill in May that would have required data center developers and energy utilities to disclose information to local governments on noise and environmental impacts of a proposed project.

In DeKalb County, Georgia, in October, county leaders voted to extend a local ​moratorium on new data center applications until Dec. 16 while local leaders assess the impact of the incoming facilities, according to Decaturish. At the same time, county leadership is considering a zoning amendment that would regulate where data centers can be built, how they are designed and other standards.

Local advocates in other areas of the country are pursuing change through the ballot box or lawsuits. Residents in Augusta Charter Township, Michigan, collected enough signatures for a referendum that would let voters decide on rezoning for a proposed data center. Township leaders believe the new facility will generate tax revenue for the community, but residents are concerned about noise and light pollution and higher electric rates, according to Inside Climate News.

In Doña Ana County, New Mexico, residents and an environmental law group filed two lawsuits that allege county commissioners violated state law by approving a data center project that had an incomplete application. Local advocates and state lawmakers representing the county say the developers’ plan to build a natural gas generating station for the data center would exploit a loophole in a state law that requires utilities to use fully renewable energy resources by 2045, according to Source New Mexico.

Data centers’ demand for electricity brings unprecedented opportunity and challenges

Still, some local leaders welcome data centers in their area. In September, AVAIO Digital, a Connecticut-based data center developer, announced that it had broken ground on a $6 billion data center campus in Brandon, Mississippi, about 15 minutes outside of Jackson.

Shortly after the data center was announced, several concerned residents in Rankin County began a petition demanding that county representatives address concerns about utility bills and pollution.

But Brandon Republican Mayor Butch Lee said he sees the project as an opportunity. As more data centers are built, it will prompt more areas to expand and modernize their electrical grid, he said. Local leaders are also working to ensure that the data center uses recycled water for cooling its systems in an effort to promote conservation practices, he said.

“I don’t see any environmental problems,” Lee said. “I don’t see any water problems. I just see a changing national and global landscape of what the next 100 years is going to be like.”

And John Malone, a principal at AVAIO Digital, said the company wants to commit itself to being good neighbors.

“All of these things work better when you’re good neighbors. And so we get it — this is a big project coming into your community,” Malone said. “Of course, people are going to have questions.”

Pennsylvania pushes

Lancaster’s residents are not alone. Local leaders in two Pennsylvania townships, East Vincent and North Middleton, are considering similar rules that would restrict where data centers can be built and operated.

They would establish a special zoning designation for data centers and require developers to study how the structures could affect the local environment, water supply, traffic patterns and more.

And a new zoning ordinance adopted by West Pennsboro Township in August requires those studies and confirmation from developers that an electricity supplier in the area will be able to supply enough power for a data center to serve new data centers in the area.

In Pennsylvania, developers are advertising data centers as an economic opportunity for the state’s local communities, said Livia Garofalo, a researcher with Data & Society’s Trustworthy Infrastructures team. The nonprofit research institute studies the social implications of data-centric technologies.

She said that while some local leaders welcome the potential revenue, others are wary of the major changes data centers have brought to other communities like theirs. A lot of Pennsylvania towns have witnessed the rise and fall of other industries — such as steel and coal — that were said to be good opportunities. Now, they must decide if the data center industry is worth it.

“For some of these communities who are experiencing economic difficulty — especially with a federal shutdown — some of these townships are saying, ‘Well, why not?’” Garofalo said.

Lancaster residents are still trying to understand what the new data center means for the city.

But for Josh Nice, who lives in the city’s Stadium District neighborhood, there’s an “anticipatory grief” — the feeling of worry that comes with an impending loss or change.

“Things like this [data centers] are never designed to benefit communities and working people,” said Nice. “They’re only designed to exploit communities and enrich stakeholders and rich people.”

In Virginia, Turner said he hopes that local communities can work alongside state officials and the federal government in the future to make decisions together.

“All the counties are very concerned about the federal government or the state making broad brush decisions about local land use that can really negatively — and, I mean, negatively — affect local communities,” Turner said.

Stateline reporter Madyson Fitzgerald can be reached at mfitzgerald@stateline.org.

Democratic and Republican candidates for governor are working to build their name recognition and campaign throughout the state and had their first opportunity to appear on the same platform at a forum Thursday. Shown are, from left, Matt Smith of WISN-12, Francesca Hong, Sara Rodriguez, Kelda Roys, David Crowley and Missy Hughes, all Democrats, and Josh Schoemann, a Republican. (Photo by Baylor Spears/Wisconsin Examiner)

The primaries for Wisconsin’s open gubernatorial election are about nine months away and the 2026 general election is still a year out, but Democratic and Republican candidates had their first opportunity to speak at a group forum Thursday. 

The forum, moderated by WISN-12 News Political Director Matt Smith, was hosted at the Wisconsin Technology Council’s annual symposium and focused mostly on the economy, especially the technology sector. 

Democratic candidates at the forum included Lt. Gov. Sara Rodriguez, state Sen. Kelda Roys, Milwaukee County Executive David Crowley, state Rep. Francesca Hong and former Wisconsin Economic Development Corporation (WEDC) CEO Missy Hughes. 

Washington County Executive Josh Schoemann was the lone Republican candidate at the forum. U.S. Rep. Tom Tiffany, who is seen as the frontrunner on the GOP side, was not present.

All are competing to replace Democratic Gov. Tony Evers, who won’t seek reelection, in the first open Wisconsin governor’s race in 15 years.

Threats to the economy

Smith asked the candidates what they see as the greatest threat to Wisconsin’s economy.  In her answer, Roys elicited the first — and biggest — round of applause from the audience.

“Wisconsin needs three key things to survive and thrive economically. We need higher wages for our workers — we lag behind our midwestern peers — we need lower costs on everything from housing to health care, and we need more freedom,” Roys said. “The biggest threat to all three of these things is the Trump regime.”

Roys said Trump’s tariffs are driving up prices for many products including appliances, building materials and groceries. She also said cuts to health care are going to have a disproportionate impact on rural parts of the state and that targeting immigrants is hurting the state’s agriculture industry. Entrepreneurship and capitalism, she added, also rely on the rule of law. 

“We need to have a free society that obeys democratic norms, and right now, Trump and his regime are our biggest threat,” Roys said. 

Hong said “authoritarianism” is the biggest threat to the economy, adding that disparities are growing in part because of actions being taken at the federal level, such as cutting food assistance. 

“When you have essentially a federal government that is taking away rights of states and our communities, that is going to threaten the economy,” Hong said. “It is workers that power the economy.”

Schoemann said “affordability” is the greatest threat and expressed concerns about young people and retirees leaving the state to live elsewhere. He said the state should work to deregulate industry and lower utility rates and cut taxes to address the threat. 

“The average price of a home in Wisconsin right now is almost $350,000… A brand new teacher and a brand new cop who are married with a dual income can’t afford to qualify for the mortgage for that one. If they have a child, they’re trying to pay for child care, and they have utility bills that are going through the roof, and Verizon just had another increase in prices, and not to mention Netflix,” Schoemann said to some chuckles from the audience. “I know we laugh, but it’s a problem. It’s a massive problem.”

Rodriguez agreed that affordability is a big concern, saying that she wants her 19-year-old son to be able to build a life in Wisconsin but she is concerned that he won’t be able to afford to live here. 

“He’s not going to be able to do that if he can’t afford a home. He’s not going to be able to do that if, you know, he’s not going to be able to afford child care, so I think affordability is our biggest threat,” Rodriguez said. She added that the state needs to figure out how to ensure that its workforce can grow. 

Crowley said “complacency” is the biggest threat.

“We can’t continue to do the same work that we’ve been doing. We should no longer be defending the status quo because we have to figure out how do we build new institutions … ” Crowley said. “We see that public trust has been destroyed in government.”

Hughes said the state isn’t investing enough in K-12 and higher education. 

“When we start from a place of thinking, ‘No, we don’t want to take a risk. No, we don’t want to have investment in something,’ we end up just staying in the same place and often spiraling downward,” Hughes said. 

Working with the Trump administration

Democratic candidates were asked how they would work with the Trump administration, while Schoemann was asked whether there is anything he would push back on.

Rodriguez said that she would use the “bully pulpit” of the governor’s office to put pressure on the Trump administration to be more consistent. She noted her background as a health care executive, saying that being able to plan is essential. 

“You’re trying to figure out what you’re going to be doing in the next several years. Small businesses do the same thing. With this back and forth on tariffs… it is almost impossible to, so, that’s why it feels like we’re stuck,” Rodriguez said.

Roys called Trump a “bully and an authoritarian” and said Wisconsin needs a governor who will stand up to the administration. She noted governors in other states, including California Gov. Gavin Newsome, Maine Gov. Janet Mills and Illinois Gov. J.B. Pritzker, as examples of governors across the country who are pushing back.

Crowley said that he has worked with the federal government under Trump and President Joe Biden to secure grant funding for Milwaukee County. He also noted that he worked with Republicans at the state level to help pass legislation that overhauled local government funding in Wisconsin. 

“When we go into a restaurant, you’re not having a conversation with a waiter about their relationship with the cook. You want to make sure that your food is coming out hot and ready and delicious,” Crowley said. “We need our government to work the exact same way. Doesn’t matter if we agree on anything or not. We need to be delivering for the people that we represent every single day because it’s about moving our state forward.”

Hughes noted that Trump pushed for a plan operated by FoxConn during his first term, which had promised would create 13,000 jobs, and the state of Wisconsin invested $1.5 billion in infrastructure to make that happen. The original plan was mostly abandoned by the company.  

“I had to come in and clean up that mess,” Hughes said. She was involved in brokering a deal with Microsoft, which launched plans in 2024 for a $3.3 billion data center on the land that was once going to be the site of the FoxConn development. 

“You have to work at every level of the economy from a small business on Main Street all the way to our biggest businesses and supporting them and everywhere in between,” Hughes said. “Donald Trump thinks you can do these big things, and it’s all going to be better, and we’re all ending up paying the price for that.” Instead of taking Trump’s “silver bullet” approach, Hughes said, Wisconsin’s governor must understand the complexity of the state economy and ”keep working hard to create the quality of life that keeps people here here.”

Hong said it would be hard to work with the administration. She added that the lack of funding for SNAP is “disrupting an entire ecosystem,” and said public officials need to fight for the most vulnerable. 

“We have to make sure that people have food, and so, I think working with an administration that has no interest in your constituents is going to be incredibly difficult to be able to ensure that there is an economy that works for everyone,” Hong said. 

Schoemann didn’t say whether he would push back on anything the Trump administration is doing. He said tariffs have been difficult, but he also said the issues are global. 

“I hear from manufacturers and agriculture alike it’s the constant give and take, but let’s face it,… the changes that the world is going through right now — it’s a global thing,” he said. 

Data centers and artificial intelligence regulations

The growing presence of data centers in Wisconsin and the concerns they raise about increased electricity costs and water consumption, as well as the use of  artificial intelligence (AI), was a significant focus of the forum.

According to datacentermap.com, there are currently 47 data centers in Wisconsin. Proposals for more centers in the state are popping up as well, including one for a campus operated by OpenAI, Oracle and Vantage Data Centers in Port Washington. 

A recent Marquette Law School poll asked Wisconsinites about data centers and found that 55% say the costs of large data centers are greater than the benefits they provide, while 44% say the benefits outweigh the costs.

Schoemann, noting his close proximity to Port Washington, said that he thinks there is an “abundance of opportunity” created by data centers, but the state needs to be “very, very strategic and smart about where” data centers are placed. He said he also has concerns that there isn’t enough power in Wisconsin, and expressed hope that there will be a nuclear power “renaissance” in the state.

Crowley said he doesn’t think the government should be picking “winners and losers” when it comes to data centers, but instead should “make sure that this is fertile ground for entrepreneurs and businesses to either stay or move right here to the state of Wisconsin.”

“There’s an opportunity for us to really become AI and a data hub not only for the entire country, but for the entire globe and really sets us apart in making sure that we continue to invest in businesses and companies here,” Crowley said. 

Hughes said that Wisconsin has a diverse economy and that she doesn’t see the state  becoming a data center-based economy in the near future, but that data centers do offer an opportunity for communities.

“To have some of these data centers land here in Wisconsin, provide incredible property tax and revenue for the communities that are really determining how to pay their bills, how to build new schools, how to build new fire departments, it’s an opportunity for those communities to access some of that investment and to benefit from it,” she said. 

Hughes also said the state is already involved in conversations with companies seeking to build data centers in Wisconsin and that should continue. She said a project needs to be right for individual communities, noting the example of Microsoft scrapping its plans last month for a data center in Caledonia after major pushback from the local community. The company is now looking for an alternative site.

“We talked to them about their environmental needs, about where they’re building and how to make that happen in a way that has the least impact to the communities and the best benefit for Wisconsin,” Hughes said. “Working directly with the companies and getting to know those companies, acting with them as partners, is critically important for these to be good investments and ultimately beneficial for Wisconsin.”

Hong raised concerns about the environmental impact of data centers and the prospect that they could drive up utility bills. 

“One of the big considerations here is that for the workers and jobs that are created from these AI data centers, let’s make sure that the housing that’s being built, the workers are going to stay in Wisconsin, that we have to make sure that the companies are being held accountable,” Hong said. 

Roys said that “data centers are coming whether people like it or not” and the question for policymakers is whether they can implement “an approach that respects the values that I think all of us share — of democracy and shared decision making that’s transparent, that’s accountable, of fair play… and of protecting all of our resources.” She added that she has been concerned seeing “the biggest and wealthiest” companies seek to force their ways into communities. 

Asked about the role that the state should play in regulating artificial intelligence, most of the candidates appeared open to some regulation of AI but expressed concerns about stifling growth. 

Roys said she wants to see consumer protections and said she has authored legislation to crack down on crypto kiosk scams as well as to regulate on the use of AI to ensure landlords don’t use it to help hike rents.

Hughes compared AI to a hammer, saying it could be used to hurt someone or to build structures.

“Trying to regulate it at this moment could potentially hold back some of the benefits that we might see from it. I think that we need to continue to watch it,” Hughes said. “ … I want to make sure that we preserve the right to use that tool in a way that can really advance our society forward.”

Crowley said he thinks there should be laws in place, but there is no “one-size-fits-all solution for technology.”

“How do you make sure that those who are directly involved in this particular industry are at the table, making sure that there is some predictability when it comes down to starting your company and also making sure they can continue to grow?… But make sure that we’re also protecting our environment, protecting the consumer at the exact same time.” Crowley said. 

Schoemann, meanwhile, said he was concerned about how AI could be a threat to the state’s workforce. He noted that Washington County has studied the potential impacts of AI, finding that many jobs could be automated using AI in the next 15 years or so. 

He said he wanted to see more study of AI’s impact, to answer the question, “How do we prepare the workforce?”

Broadband and marijuana

A question about how to increase broadband access in Wisconsin led the an unexpected answer from Hong: “Legalize weed.”

Wisconsin is one of 11 states that hasn’t legalized recreational or medical marijuana. By some estimates the state is losing out on millions in tax revenue each year due to cannabis prohibition. 

“The revenue that comes in will be able to invest in fiber optic and high-speed internet in many different companies across the state,” Hong said.

The push to legalize marijuana for either recreational and medicinal purposes in Wisconsin has been a fruitless pursuit under split government. Republican lawmakers are working to advance a medical marijuana proposal in the Legislature right now, though it is unclear whether it can garner enough support to become law. 

Rodriguez said she didn’t disagree with Hong, noting that Wisconsin’s midwestern neighbors are able to bring in significant revenue by taxing marijuana.

“Gov. [J.B.] Pritzker thanks us all the time for the amount of tax Wisconsin [consumers pay],” Rodriguez said. 

Rodriguez also added that she wants to build off the Evers administration’s successes expanding broadband.

“It is a requirement for modern day working, for schools. We saw that during COVID,” Rodriguez said. “Making sure that we are able to get that type of connection to every part of Wisconsin is going to be important.” 

Hughes agreed both with marijuana legalization and with Rodriguez on broadband, saying there have been “incredible strides” in installing broadband in rural areas under the Evers administration. 

“I’m all for legalizing weed, and abortion for that matter,” Roys said. 

Roys noted that the state’s progressive tax structure has flattened over the last 16 years and that reversing that trend — taxing higher income residents — could help pay for investments in broadband.

Schoemann started his answer focused on broadband, rather than staking out his position on marijuana legalization, saying broadband it is a massive issue, especially in the Northwoods. He said Washington County was able to make progress using American Rescue Plan Act (ARPA) funding, though he didn’t necessarily support the funding. 

“I took [U.S] Rep. Glenn Grothman’s advice: ‘If they’re dumb enough to give you the money, you should be dumb enough to spend it,’” Schoemann said. “Some of that we did in broadband… I think we have to finish the job on broadband.”

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As power-hungry data centers proliferate, states are searching for ways to protect utility customers from the steep costs of upgrading the electrical grid, trying instead to shift the cost to AI-driven tech companies. (Dana DiFilippo/New Jersey Monitor)

A new proposal from a pair of legislative Democrats would institute a number of labor, energy and sustainability requirements on tech companies seeking to build data centers in Wisconsin. 

The proposal from Sen. Jodi Habush Sinykin (D-Whitefish Bay) and Rep. Angela Stroud (D-Ashland) comes as data centers have continued to pop up across the state — largely in southeast Wisconsin — sparking heated local debates about land use, local jobs and the centers’ heavy use of water and electricity. 

There are now 47 data centers in Wisconsin, with more under consideration by local governments. The data centers house computer servers to store information for cloud-based software and, increasingly, to support the expansion of artificial intelligence. 

For local governments, the construction of data centers offers an easy opportunity for property tax revenue from a business that won’t require many local government services. But the servers have high energy and water needs, are often sited on land that has long been used for farming and raise concerns associated with AI. Experts and advocates have been looking for the state government to weigh in more forcefully on how to regulate the centers, the Wisconsin Examiner reported last month. 

So far, the only mentions of data centers in state law are a provision in the 2023-25 state budget which exempts data center construction costs from the sales tax and a law enacted earlier this year to study the growth of nuclear power in the state. 

The proposal from Habush Sinykin and Stroud, announced Thursday, would establish rules beyond current incentives for data center growth. 

“The new legislation being proposed today is about making sure that we have clear, statewide guardrails in place that provide people in communities across Wisconsin with the information and transparency they need to engage in the local decision-making process in an informed, effective manner from the start,” Habush Sinykin, whose district includes a controversial data center project in Port Washington, said in a statement.

Under the proposal, electric companies in the state will be required to submit quarterly reports to the Public Service Commission on the amount of energy being used by data centers in the state. Those reports will be required to include information on the source of the energy and be made public. Water utilities in the state will also be required to publicly report when a single customer will account for more than 25% of the total water usage in the district. 

The data center companies would be required to pay an annual fee to the Department of Administration, which will put that money towards renewable energy programs. Data center buildings would also be required to obtain sustainability certifications. 

The bill would also give data centers an incentive to encourage utility companies to expand clean energy and it would also require the PSC to establish a class of “very large customers” and ensure that normal ratepayers aren’t bearing the increased energy costs caused by the data centers’ growing energy demands. 

“It’s mind-blowing that the only regulations we have on the books are to just incentivize data centers with no expectations for them being good environmental partners with the communities they’re going to be located in,” says Jen Giegerich, the government affairs director at Wisconsin Conservation Voters, which was involved in helping draft the proposal. 

“It’s really important that what this bill does is actually make sure that the data centers are paying their own way,” Giegerich continues. “We’ve just seen energy costs rising, and the fact that we would continue to put costs for energy development for tech giants who are making unheard-of profits, and then expecting Wisconsin ratepayers to pay for that is really a problem. So this bill rectifies that, and I think it’s sorely needed.”

The proposal also includes labor requirements for data center construction. Under the bill, any workers at construction sites for data centers must be paid the local prevailing wage rate or, if the worker is a member of a union, the wage rate in that worker’s collective bargaining agreement. The data center company will have to pay whichever wage is higher. 

To qualify for the sales tax exemptions already available for data centers under current state law, the companies would be required to meet the labor requirements in the bill and source at least 70% of their energy from renewable sources. 

Steve Kwaterski, a spokesperson for the Wisconsin Laborers’ District Council, says data center projects have already been a source of consistent, good paying construction jobs for his members and the bill will go towards ensuring that these jobs support families in the state. 

“We want to make sure that any project that’s as complex as a data center is being done with the most skilled and trained workforce that’s out there,” he says. “That ensures that it’s being done right on time, on budget, and done safely as well.”

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Interior of a modern data center. Interior of a modern data center. (Stock photo by Imaginima/Getty Images)

The efforts of some of the largest companies in the world, including Microsoft, Meta, Oracle and OpenAI, to develop data centers in communities across Wisconsin have sparked heated local debates among residents, government officials and even comedians. 

Those debates have often been over the data centers’ use of water and electricity, the net impact of local government deals with big corporations, the value of handing over large tracts of land for big warehouse-like buildings and the secrecy in which the plans are often shrouded. 

Data centers, buildings that house computer servers to store information for cloud-based software and, increasingly, to support the expansion of artificial intelligence, are becoming more and more prevalent in the Upper Midwest, according to the Minneapolis branch of the U.S. Federal Reserve. 

While Wisconsin still lags behind its neighbors, the state is now home to 47 data centers with more on the horizon. As communities across the state weigh the merits of accepting data center development, critics and proponents say the state needs more than the current, piecemeal local approach. 

In Port Washington, a Milwaukee suburb on the shore of Lake Michigan, the local government has supported a proposal from tech giants Open AI and Oracle to develop an AI-focused data center on 2,000 acres of farmland in the community. That project is moving forward despite local backlash. 

In Mount Pleasant, a village in Racine County where state and local officials have been trying to salvage a failed Foxconn development, Microsoft has spent billions of dollars for the construction of two data centers in the community. 

But in nearby Caledonia, Microsoft was forced to back off a planned development after backlash from local residents led to the denial of a requested zoning change. 

Overwhelmingly, the largest complaints about data centers are the electricity and water usage. A recent Bloomberg News report found that the construction of data centers has caused electric bills in nearby communities to surge because of the high energy needs of the centers. A recent report from Clean Wisconsin found that just the data centers in Mount Pleasant and Port Washington will use enough electricity to power 4.3 million homes. 

Many data centers need to use water to cycle through their cooling systems, which are necessary because computer equipment can’t be allowed to overheat. While proponents of data centers have downplayed the amount of water required to run the cooling systems, critics point to the water use associated with the increase in electricity demand. Wisconsin’s existing power plants use a high amount of water.

These demands on water have become especially fraught as the data centers have become increasingly concentrated in southeast Wisconsin, where residents are very protective of Lake Michigan and the Great Lakes watershed. 

Melissa Scanlan, the director of UW-Milwaukee’s Center for Water Policy, says Wisconsin’s failure to address data centers comprehensively could quickly put an overly burdensome strain on the state’s utilities.

“There should be a state level review of all of the potential proposals, so that the state can assess the impact on electricity generation and water supply,” Scanlan says. “Doing it in a piecemeal way, where you’ve got local governments deciding about hosting, but then utilities that are committed to supplying the electricity and water, is going to very quickly bump up against the realities of our ability to generate electricity in a responsible way.”

Robin Palm, a certified urban planner who lives in Milwaukee, says he’s largely supportive of data centers because they provide local governments with a consistent source of property tax revenue without requiring many city services. 

“A data center is extremely low services, they’re not going to have kids that need to go to school,” he says. “They are not going to have homeowners that are going to make demands at the village board, and they’re not going to have police calls because of crime or anything like that. So it’s a really low services, high value land use.”

He says the current approach of leaving these decisions up to local officials and zoning boards has pointed the public’s skepticism in the wrong direction. The local officials, he says, are making an easy economic development calculation when the real blame for the confusion should go to the state Public Service Commission and power companies — which have failed to support the expansion of renewable energy in the state. 

Palm points to Iowa, which has far more data centers than Wisconsin and gets more than 60% of its power supply from wind. 

“[Iowa is] getting cheap electricity. They use a lot more per capita than a lot of other states, and they’re way far ahead of us in data centers, and it’s mostly renewable,” he says. “I can’t see anything to complain about that situation. So it seems to me that the obvious culprit, I think, on our side, is the PSC and We Energies. There is something in that mechanism that’s basically screwing us.” 

Warning about a ‘data center stampede’

Late last month, state Sen. Chris Larson (D-Milwaukee) said that a “data center stampede” has started in Wisconsin and that state officials need to develop some sort of statewide plan for how to manage it. 

“We must develop a statewide plan for data centers that prioritizes the needs of our neighbors and its impact on the environment and our communities before the profit margins of private utilities and big tech companies,” he said in a statement. “If we don’t, the data center stampede will likely continue unabated, and in its wake may very well be a Wisconsin we no longer recognize — one that has abandoned its tradition of protecting our air, water, and land for future generations.”

Richard Heinemann, an attorney for Madison-based law firm Boardman Clark, says state lawmakers have already made a policy statement affirming their desire for the construction of data centers. In the 2023-25 state budget, passed by the Republican-controlled Legislature and signed by Democratic Gov. Tony Evers, a provision was included to give a sales tax rebate on the “development, construction, renovation, expansion, replacement, repair, or operation” of data centers. 

Heinemann also points to two bills signed into law by Evers earlier this year to advance the development of nuclear energy in the state. That legislation was introduced specifically to respond to the increased energy demands of data centers.

“Wisconsin must be prepared to meet soaring energy demands that will be driven by the development of data centers and other energy-intensive economic development,” the co-sponsorship memo states. 

But Heinemann says he believes local officials and residents already have the necessary tools to weigh in on data center development. 

“We already have procedural mechanisms in place to try to address some of these issues,” says Heinemann, who recently wrote an article about local government’s authority to intervene in Public Service Commission considerations of utility expansion. “I’m not saying every issue, but some of the important ones that people have looked at or pointed to. So I don’t know what sort of new legislation one could propose that would address these issues in some more comprehensive way, or in a way that would just provide some due process.” 

Hovering over the whole debate is the secrecy with which big tech companies have operated while working to build data centers. The corporations responsible for development are often hidden behind obscure LLCs and have a record across the country of trying to get local governments to sign non-disclosure agreements (though it’s unlikely such an agreement could stand up to Wisconsin’s open records laws). A group of environmental organizations recently had to file a lawsuit to force the city of Racine to disclose how much water it was estimating it would be providing to the Microsoft site in Mount Pleasant. 

Heinemann says these debates would go more smoothly if the companies worked in the open with communities. 

“Data centers themselves have an obligation to make sure that they’re doing the outreach necessary when they work to site a facility in a locality,” he says. “It behooves them to do that work of trying to address the needs of the locality.” 

Heinemann says says the state Public Service Commission, Department of Natural Resources and local communities through their zoning authority already have the resources they need to regulate data centers

“Each project is complicated. It does require a lot of infrastructure,” Heinemann adds. “There are a lot of potential benefits to communities, but there are also impacts on the communities, those can be addressed, and there are legal procedures and agencies whose job it is to do that.”

Antitrust experts say the new administration’s hands-off approach to tech regulation could gain the president the loyalty of tech executives in the short term, but could hurt the competitiveness of the American tech sector in the long run. (Photo by hapabapa/Getty Images)

Leaders in the tech industry have enjoyed more freedom to make business moves and an overall deregulatory attitude under the Trump administration, but antitrust experts say the administration’s hands-off approach could end up hurting American companies’ ability to innovate and compete on a global scale.

Antitrust laws protect fair competition, ensuring that no one company controls an entire market, price gouges for their products or controls the cost of labor. In the short term, a lax approach to these laws could mean the American people may see more big tech companies merge or acquire smaller competitors. 

In the long-term, it means the already small group of people running the country’s most powerful tech firms would gain even more control of the market, Illinois-based legislative attorney Maaria Mozaffar said.

“Traditionally, innovation in tech is inspired by how we can solve problems. And if there’s fewer people that are not invested in solving problems, but more invested in making profit, the innovation’s intent is going to be different,” Mozaffar said. “We’re going to get a repetition of the same models and the same products that are not actually solving problems, but just a faster way to make money.”

Trump’s approach to the FTC

Though Democrats and Republicans may have had different “philosophies” for antitrust rules in the past, it’s unusual to see wide swings in attitudes from the Federal Trade Commission (FTC), said New Jersey-based antitrust attorney Nadine Jones. 

The independent regulatory agency, which protects consumer interests and anti-competitive business practices like price-fixing, illegal mergers and monopolization, has historically run with little influence from the president, Jones said, though it technically is housed under the executive branch.  

But recent moves by the Trump administration suggest he wants a much more hands-on approach, Jones said. Before taking office, Trump chose Andrew Ferguson as the FTC chairman, replacing Lina Khan, who fought Big Tech overreach during her tenure. Together with antitrust specialist Mark Meador, the pair have focused on issues of “censorship” by big tech, arguing that tech platforms have unfairly restricted conservative views.

Earlier this year, Trump fired two Democratic commissioners from the FTC, a decision that was recently supported by the Supreme Court, and set a precedent that gives more executive branch control over the independent agency.

And in August, Trump revoked a Biden-era executive order that called for enforcement of antitrust laws to promote more competition within industries and keep companies from monopolizing. 

All of it points to a central theme of deregulation for the tech industry, with a goal of growing the industry with as little government involvement as possible. Trump’s alignments with big tech leaders during the 2024 election were probably the first clue that he’d handle the FTC differently, Jones said. 

“I think if I were to try to read the tea leaves in past administrations, currying favor with the president was of less importance,” Jones said. “The DOJ, antitrust division, the assistant attorney general of the division was who you wanted to curry favor with, or the chair of the FTC. Whether or not you’re smiling nicely with the president was, I think, of less significance, because they typically left these technical areas of law to the experts.”

For California-based tech founder and author Mark Weinstein, The FTC holds a critical role in upholding democracy and free market capitalism. Trump’s attempts to fill the commission with Republicans is a threat to both concepts, he said. 

“It’s concerning, even when he appoints people who are inclined to be strong antitrust enforcers, because they’re still appointed by the president,” Weinstein said. “There’s a quid-pro-quo that’s clearly inferred there.”

Weinstein thinks that before his second term, Trump realized the immense power that information giants like Meta and Apple had in controlling content and shaping public opinion. Deregulatory policies could curry favor with the leaders of Big Tech, and help him control information, Weinstein said.

“If Meta bans him from their platform, then they have all the power,” he said. “And he wants to have all the power.” 

With influence over large tech platforms, Mozaffar said, Trump is more capable of spreading his ideas around diversity, equity and inclusion and past “censorship” of conservatives.

“When you see the tech giants behind Donald Trump, people think it’s just about making them richer,” Mozaffar said. “It’s really [Trump’s] ability to have control over how those tech platforms do their business, as far as content control.”

What does this mean for American tech companies? 

So far, the FTC has been continuing antitrust lawsuits from previous administrations against some tech giants, like Google, which is currently awaiting a decision on a trial alleging it monopolized its search engine, after being found liable in a separate advertising-related trial in 2024.

The commission is also awaiting an outcome on a six-week trial in a case it brought against Meta, parent of Facebook, alleging in 2020 — under direction from the first Trump administration — that the company created a monopoly by acquiring Instagram and WhatsApp. 

Trump-appointed FTC commissioner Meador said at NYU’s Law Forum last month he believes most Americans support the scrutiny into big tech companies. 

“I don’t think this moment is a flash in the pan,” Meador said during the event. “I think that it is growing out of deeper sentiments and concerns about economic fairness and economic regulation and policy at a very broad level. And this is just one manifestation of it. I think that’s a generational thing. I think it’s only going to amplify. So, I don’t think it’s going away.”

But the current Trump administration has only brought one antitrust case against a tech merger, when it sued to block Hewlett Packard Enterprise from buying Juniper Networks for $14 billion earlier this year.

Trump is likely feeling out his options, Mozaffar said — he could fall in line with more traditional Republican action, aiming to enforce antitrust laws to promote competition. But he could also be using a framework FTC Chair Ferguson outlined, which criticises tech platform’s content moderation rules, as a way to rein in platforms that the GOP has long accused of censoring conservative viewpoints.

Mozaffar said she’s watching how the administration handles both horizontal and vertical mergers. Horizontal mergers, when two similar companies merge to create one company, are likely more familiar to the average American. But vertical mergers, which involve partnerships of companies across several layers of a supply chain, have the potential to have truly expansive power. 

One possible example is a recent $100 billion deal between AI giant OpenAI and computing powerhouse Nvidia. Nvidia’s investment into OpenAI includes the ability to build out its data center capacity and computing chip needs, tying the companies’ growth and success together. The deal immediately raised antitrust concerns. 

“How much control do you have over every piece of the process? To the point where there’s no innovation in product and competition leading up to that final product?” Mozaffar said.  “And then how much are you controlling as far as protecting labor rights and best practices, because you can always cut corners to be able to make sure that the final product serves the profit that it’s supposed to serve.” 

Amid conflicting federal antitrust cases, Jones advised corporate lawyers to pay attention to their state’s antitrust laws, as state attorneys general are some of the biggest enforcers of antitrust law in the country. 

She said although letting tech businesses operate unfettered may meet some of Trump’s short-term goals, a lack of enforcement will ultimately make the United States a less competitive, less innovative place. 

“Antitrust philosophy believes the only way to get genuine benefits for consumers, to get people to race to get to the finish line of your dollars — and you choosing them with your dollars — is to compete with each other,” Jones said.  “And then we, the consumers, enjoy the fruits of those competitions.”

As AI Energy Demands Grow, Improved Power Electronics Will Be Needed As AI becomes integrated into daily processes and data centers are built...

The post Reducing Energy Consumption From Data Center Cooling By Eliminating Heat-Generating Components appeared first on Cleantech Group.

This article was originally posted by South Dakota Searchlight.

Massive data centers used for cloud computing and artificial intelligence are consuming enormous amounts of energy, and developers are eyeing South Dakota as a potential location, regulators say.

These “hyperscale data centers,” or “hyperscalers,” are designed to handle immense computing demands and are often operated by tech giants. The centers are characterized by their large size — often tens of thousands of square feet — and thousands of computer servers that require significant energy to operate.

Nick Phillips with Applied Digital in Texas, a developer of the centers, highlighted South Dakota’s appeal: a cold climate that cuts down on cooling a room full of hot servers, and abundant wind energy that’s considered one of the most cost-effective renewable energy sources, which can help keep operating costs down.

State regulators are not aware of any hyperscale data centers currently operating in South Dakota. 

“There isn’t a requirement to report hyperscale data centers to the commission, so we don’t have a formal method to track that information,” said Leah Mohr with the Public Utilities Commission. 

Commissioner Kristie Fiegen noted that the state’s largest proposed data center is a 50-megawatt facility in Leola.

“We don’t know what’s coming,” she said. “But the utilities are getting calls every week from people trying to see if they have the megawatts available.”

The commission recently hosted a meeting in Pierre with representatives from regional utilities, regional power grid associations and data centers. The goal was to understand the emerging demands and facilitate an information exchange.

Bob Sahr, a former public utilities commissioner and current CEO of East River Electric Cooperative in Madison, emphasized the scale of energy needed.

“We’re talking loads that eclipse some of the largest cities in South Dakota,” he said.

A single data center campus can require anywhere from 300 to 500 megawatts of electricity to operate. One megawatt can power hundreds of homes. By one estimate, there are over 1,000 hyperscalers worldwide, with the U.S. hosting just over half of them.

Ryan Long, president of Xcel Energy, headquartered in Minneapolis, illustrated the extreme nature of the demand.

“We now have, I would say, north of seven gigawatts of requests across the Xcel Energy footprint for data centers to locate in one of our eight states,” he said. “And I’ll be very frank that there’s no way that we’re going to be able to serve all of that in a reasonable amount of time.”

Protecting existing customers from potential costs or energy shortages is another shared concern. Utility representatives emphasized the need for coal and natural gas to maintain a reliable “base load” when renewable sources like wind and solar are unavailable. Arick Sears of Iowa-based MidAmerican Energy underscored the point, noting that costs for each data center should depend on how much energy it consumes. 

“We need to ensure that large-scale energy users are paying their fair share,” he said.

Utilities also flagged the risk of “stranded costs,” referring to a data center ceasing operations, leaving a utility with added infrastructure to meet a demand that no longer exists. They said financial safeguards will need to be written into power agreements with hyperscalers.

Speed of deployment is another pressing issue. Representatives from Montana-Dakota Utilities, headquartered in North Dakota, and NorthWestern Energy, headquartered in Sioux Falls, noted that some facilities expect to be operational within months of making a deal, straining infrastructure, planning and resources.

Grid managers Brian Tulloh of Indiana-based Midcontinent Independent System Operator and Lanny Nickell of Arkansas-based Southwest Power Pool echoed those concerns. They warned that data center growth is outpacing the grid’s ability to meet demand and cautioned against decommissioning coal power plants too quickly. Setting aside how much it would cost to produce the required energy, Tulloh estimated that MISO needs $30 billion in electric transmission infrastructure to support the demand from hyperscalers.

“The grid wasn’t designed for that,” Public Utilities Commissioner Chris Nelson told South Dakota Searchlight after the meeting.

Nelson was glad to hear the data centers will include backup generators, similar to hospitals, for power outages or when homes need prioritization. He said some even aim to have huge batteries to power the plant until the generators get going. They would consume massive amounts of diesel and natural gas until the outage is over. 

Nelson said all of this makes modern nuclear energy facilities more attractive. He said few alternative “base load” options remain, and the public has little appetite for ramping up coal power. 

NorthWestern Energy is exploring the possibility of constructing a small nuclear power plant in South Dakota, with an estimated cost of $1.2 billion to $1.6 billion for a 320-megawatt facility. The plant would be the first in the state since a test facility near Sioux Falls in the 1960s. 

The company is conducting a study, partially funded by the Department of Energy. Details about the study and potential plant sites remain confidential. 

Additionally, South Dakota’s Legislature has shown interest in nuclear energy, passing a resolution for further study on the topic that led to the publication of an issue memorandum by the Legislative Research Council.

Massive data centers consuming large amounts of energy have eyes on South Dakota is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

A top executive with Minnesota’s largest utility says data center growth will not prevent it from meeting the state’s 100% clean electricity law, but it may extend the life of natural gas power plants into the next decade.

“As we take all of that coal off the system — even if you didn’t add data centers into the mix — I think we may have been looking to extend some gas (contracts) on our system to get us through a portion of the 2030s,” said Ryan Long, president of Xcel Energy’s division serving Minnesota and the Dakotas. “Adding data centers could increase the likelihood of that, to be perfectly honest.”

Long made the comments at a Minnesota Public Utilities Commission conference this fall exploring the potential impact of data centers on the state’s 2040 clean electricity mandate.

The expansion of power-hungry data centers, driven by artificial intelligence, has caused anxiety across the country among utility planners and regulators. The trend is moving the goalposts for states’ clean electricity targets and raising questions about whether clean energy capacity can keep up with demand as society also tries to electrify transportation and building heat.

Minnesota PUC commissioner Joe Sullivan organized last month’s conference in response to multiple new data centers projects, including a $700 million facility by Facebook’s parent company Meta that’s under construction in suburban Rosemount. Microsoft and Amazon have each acquired property near a retiring Xcel coal plant in central Minnesota. 

“We need to ensure that our system is able to serve these companies if they come,” Sullivan said, “and that it can serve them with clean resources consistent with state law.” 

Alongside concerns about whether clean energy can keep up with new electricity demand, there’s also an emerging view that data centers — if properly regulated — could become grid assets that help accelerate the transition to carbon-free power. Several stakeholders at the Oct. 31 event shared that view, including Xcel’s regional president.

A 100-megawatt data center could generate as much as $64 million in annual revenue for Xcel, enough to help temper rate increases or cover the cost of other projects on the system, Long said. He said the company wants to attract 1.3 gigawatts worth of data centers to its territory by 2032, and it thinks it can absorb all of that demand without harming progress toward its 2040 clean energy requirement.

Long said data center expansion will not change the company’s plans to close all of its remaining coal-fired power plants by 2040, but it may cause them to try to keep gas plans operating longer. Ultimately, meeting the needs of data centers will require more renewable generation, battery storage, and grid-enhancing technology, but rising costs and supply chain issues have slowed deployment of those solutions.

Other utilities echoed that optimism. Julie Pierce, Minnesota Power’s vice president for strategy and planning said the company has experience serving large customers such as mines in northeastern Minnesota and would be ready to serve data centers. Great River Energy’s resource planning director Zachary Ruzycki said the generation and transmission cooperative “has a lot of arrows in its quiver” to accommodate data centers.

Ruzycki noted, too, that much of the interest it has received from data center developers is because of the state’s commitment to clean energy. Many large data center operators have made corporate commitments to power them on 100% carbon-free electricity, whether from renewables or nuclear power.

Pete Wyckoff, deputy commissioner for energy at the Minnesota Department of Commerce, expressed doubts about the ability to meet unchecked demand from data centers. Even with the state’s recent permitting reforms, utilities are unlikely to be able to deliver “power of any sort — much less clean power — in the size and timeframes that data centers are likely to request.”

He sees hydrogen, long-duration batteries, carbon capture, and advanced nuclear among the solutions that will eventually be needed, but in the short-term the grid could serve more data centers with investments in transmission upgrades, virtual power plants, and other demand response programs.

“These solutions can be deployed faster and cheaper than building all new transmission and large clean energy facilities, though we’ll need those, too,” Wyckoff said.

Aaron Tinjum, director of energy policy and regulatory affairs for the Data Center Coalition, said data centers provide the computing power for things like smart meters, demand response, and other grid technologies. The national trade group represents the country’s largest technology and data center companies.

“We can’t simply view data centers as a significant consumer of energy if they’re all helping us become more efficient, and helping us save on our utility bills,” Tinjum said. 

He also pointed to data centers’ role in driving clean energy development. A recent report from S&P Global Commodity Insights found that data centers account for half of all U.S. corporate clean energy procurement. 

The true impact of data centers on emissions and the grid is complicated, though. Meta, which participated in the recent Minnesota conference, says it matches all of its annual electricity use with renewable energy, but environmental groups say there is evidence that its data centers are increasing fossil fuel use and emissions in the local markets where they are built.

Amelia Vohs, climate program director with the Minnesota Center for Environmental Advocacy, raised concerns at the conference about whether data center growth will make it harder to electrify transportation and heating. She pointed to neighboring Wisconsin, where utilities are proposing to build new gas plants to power data centers.

“This commission and the stakeholders here today have all done a ton of work and made great progress in decarbonizing the electric sector in our state,” Vohs said. “I worry about possibly rolling that back if we all of a sudden have a large load that needs to be served with fossil fuels, or [require] a fossil fuel backup.” 

The Minnesota Attorney General’s Office argued that state regulators need to scrutinize data center deals to make sure developers are paying the total cost of their impact on the system, including additional regulatory, operational and maintenance work that might be required on the grid.

In an interview, Sullivan said he was impressed by tech companies’ interest in having data centers in Minnesota because of the 2040 net zero goal, not despite it. They want to buy electricity from Minnesota utilities rather than build their own power systems or locate in neighboring states, he added, and the October meeting left him confident that “we can deal with this.”

Xcel Energy says data center growth won’t get in the way of 2040 clean energy target in Minnesota is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.