County officials wield significant authority over data center development through zoning, permitting, moratoriums, and standards on noise levels and energy use.

Download the County Officials guide (PDF)

Secure Smart Siting

• Optimize Existing Assets: Externalities such as diesel backup generators, noise, design, and 24/7 lighting are common flashpoints for local communities and can lead to lawsuits and opposition. Prioritize development on pre-zoned industrial, commercial, or brownfield sites to reduce litigation and infrastructure friction.
• Use Appropriate Approvals: Shift from automatic “by-right” approvals to “special-use” permits to ensure the public has a voice in projects and secures the best possible terms for residents.
• Secure Neighborhood Character: Require developers to fully enclose cooling and ventilation systems and screen mechanical equipment from view to maintain local aesthetic and property value near residential zones.
• Siting for Grid Stability: Demand grid reliability assessments before granting permits.
• Use Temporary Pauses: Implement temporary moratoriums to create the political space to develop lasting ordinances that protect communities and to update outdated regulations.

Mandate Transparency

• Standardized Disclosure: To better understand local impacts, require data center developers to provide clear, non-aggregated data on predicted energy demand, backup energy systems, flexible load assurance, and contingency plans in case of power delivery interruptions.
• Avoid Secrecy: Refrain from agreeing to or allowing NDAs. Instead, maintain transparency and trust with constituents, mitigating data center development aversion.
• Implement Sunshine Periods: Adopt mandatory public review periods before public bodies vote on projects covered by NDAs.

• Amplify Public Forum Messaging: Public engagement allows for informed constituents and democratic participation; it eliminates backend opposition and public distrust. Local officials should use communications tools to publicize local forums, including public budget hearings and citizens’ assemblies, to increase citizens’ awareness of avenues for reform. Forums can inform communities about the benefits of data center development and allow officials to explain how they have mitigated externalities and maximized community benefits.
• Follow Generally Accepted Accounting Principles: Publicly disclose local tax abatement revenue losses to data centers under the Governmental Accounting Standards Board’s (GASB) Statement No. 77 on Tax Abatement Disclosures in an Annual Comprehensive Financial Report (ACFR) for economic development projects.

Optimize Incentives

• Know Your Worth: In high-demand data center clusters (with lower-cost energy, a skilled workforce, fiber-optic connectivity, pre-zoned land, and proximity to metropolitan areas), county officials have the leverage to raise taxes on computer equipment and peripherals or to remove existing exemptions, securing higher revenues to fund communities.

• Protect Residential Electricity Consumers: Ensure rates protect residents from bearing the up-front costs of transmission, grid capacity upgrades, and stranded asset contingency funding.
• Review Underperforming Incentives: Periodically assess whether data center tax exemptions (e.g., property taxes) provide a balanced return on investment compared to the community costs they impose.

• Lobby the State: Employ state legislative lobbyists to repeal unproductive state tax exemptions for data centers to increase county funds that flow from the state revenue.

Ensure Quality of Life Protections

• Set Enforceable Development Thresholds: Establish local limits for noise and residential protection distances from developments.
• Enforce Community Benefit Standards: Use agreements with developers that mandate and enforce minimum tax payments and local hiring standards in exchange for subsidies. Establish Community Benefit Agreements (CBAs) with local buy-in and input.

• Translate Technical Impacts: Before approval, require the scale of power demand to be translated into meaningful local terms (e.g., as a percentage of total local power consumption) so that residents can understand the measurable footprint of the data center.

Additional Resources: Data Center Regulation Tracker · Database of Emerging Large-Load Tariffs

State lawmakers hold the highest level of authority to regulate utility mandates, design tax incentives, and establish permanent reforms that protect ratepayers while ensuring responsible industrial growth.

Download the State Lawmakers guide (PDF)

Codify Grid Stability & Ratepayer Protections

Unregulated data center growth can strain the grid and socialize infrastructure costs across all residential users. Lawmakers can act to ensure data centers pay their fair share.

• Create Advisory Boards: Establish expert-led advisory boards to guide lawmakers on policies aligned with their business and constituent goals.

• Implement Grid Impact Assessments: Mandate standardized grid impact assessments for any interconnection request exceeding a specified threshold to mitigate the risk of cascading failures or blackouts.
• Determine Cost Causation: Authorize public utility commissions (PUCs) to assess and publish how the costs of new data center loads will result in cost shifts for other utility customers.

• Recover Capacity and Infrastructure Costs: Assign recovery rates to the large-load customers that are increasing generation capacity and grid modernization costs. Use trackers, such as the Database of Emerging Large-Load Tariffs, to find examples of similar regulations.

Plan for Contingencies

If hyperscalers or developers abandon a project after utilities upgrade the energy infrastructure, the “ghost site” costs can fall on local ratepayers.

• Establish Stranded Asset Contingency Funding: Pass legislation requiring developers to provide financial assurances or “contingency funding” before construction begins to cover infrastructure costs if the project is abandoned or if the limited liability company (LLC) is unable to follow through with commitments on development.

Many AI data centers are not “flexible loads,” so they cannot automatically adjust consumption to help balance the grid.

• Define Flexible Load Standards: Establish state-level requirements for data centers to qualify as “flexible loads,” requiring the ability to raise or lower power consumption in response to grid needs without degrading their own operations.
• Incentivize “Temporal Flexibility:” Encourage AI data centers to shift their energy-intensive workloads to off-peak hours or periods of high renewable availability.

Maximize Benefits

Data centers are among the most subsidized industries, often at a high cost-per-job ratio. States should restructure these deals to ensure they deliver a balanced return on investment.

• Freeze or Restructure Underperforming Exemptions: Audit existing sales and use tax exemptions. If benefits granted to data center developments do not proportionally increase local tech jobs and revenues, consider freezing eligibility, narrowing the scope of exemptions, raising sales taxes, or repealing the incentives altogether.
• Tie Incentives to Community-Enhancing Standards and Long-Term Commitments: Make tax exemptions contingent upon strict employment quotas, specific wage thresholds, environmental baselines for on-site generation, and commitments to remain in operation for 20 or more years.
• Support Community Benefit Agreements (CBAs): Create legal frameworks that encourage or require developers to enter into CBAs, ensuring enforceable commitments for local hiring, job quality standards (e.g., above market wages and paid family leave), apprenticeship programs, infrastructure investments, and environmental safeguards.
• Unlock Industry Development: Make siting agreements contingent on investments in the state’s technology ecosystem, including compute donations to local universities, R&D partnerships, and support for AI startup intermediaries.

• Generate Wealth for Residents: Enable communities to co-invest in new developments and derive profits from successful buildouts.

Mandate Transparency

The use of Non-Disclosure Agreements (NDAs) and the lack of standardized energy consumption reporting leave regulators and the public “flying blind” regarding the true footprint of these facilities.

• Prohibit NDAs: Ban state and municipal government officials from entering into non-disclosure agreements tied to data center projects, ensuring public and legislative scrutiny of all contract details.

• Require Resource Reporting: Require data center owners to report standardized, non-aggregated data on energy consumption and total pollutant emissions.
• Follow Generally Accepted Accounting Principles: Publicly disclose state tax abatement revenue losses to data centers under the Governmental Accounting Standards Board’s (GASB) Statement No. 77 on Tax Abatement Disclosures in an Annual Comprehensive Financial Report (ACFR) for economic development projects.
• Publicize Secured Commitments: Launch online dashboards to publicize the commitments that state and local governments secured from data center developers, including capital and community investments, jobs, and wage and benefit agreements.

Additional Resources: Data Center Regulation Tracker · Database of Emerging Large-Load Tariffs · Multistate.ai

CSOs provide the specialized legal, technical, and regulatory expertise that individual citizens often lack. They can serve as effective advocates for responsible data center buildouts.

Download the Civil Society guide (PDF)

Identify Risks & Leverage Points

• Unpermitted Infrastructure: Monitor data center energy assets, such as natural gas turbines, which operate without permits or leave communities with unmitigated externalities.
• Inadequate Cost-Benefit Analysis: Use the organization’s resources to produce independent analyses on the costs and benefits communities will face as a result of buildouts.

• Technical Translation: Articulate complex impacts–such as how transmission upgrades affect energy rates or how 24/7 operations impact local noise and pollutant standards–into clear terms for citizens and government officials.

Master Technical Foundations

• Commission Expert Studies: Fund independent public health, externality, and cost analyses to examine the effects of co-located power plants, onsite generators, and infrastructure upgrade costs on local citizens.

• Monitor Legislative Trends: Track state bills, such as South Carolina’s H4583, which aim to assign new infrastructure costs to the data centers rather than the public.
• Analyze Data Centers’ Energy Use Metrics: Investigate data centers’ reliance on outdated metrics, such as Power Usage Effectiveness (PUE), which fail to capture how facility components, such as IT equipment efficiency and cooling infrastructure, strain local energy resources.

Ask Questions

• Have the relevant utilities and public utility commissions conducted cost-causation analyses to determine who is bearing the costs of transmission and grid upgrades for data center buildouts?
• Are new data centers classified as “flexible loads,” and if not, what contingency plans exist in case multiple facilities simultaneously disconnect during peak demand?
• Which data collection tools are available to conduct open-source intelligence analysis on data center developments?
• How can state freedom of information laws be used to surface data center contracts, tax incentive agreements, and non-disclosure agreements?
• How can community benefit agreements (CBAs) be structured to enforce commitments, including local hiring, energy use, and public service funding?

Formally Intervene

• Secure Intervenor Status: File as a formal intervenor in public utility commission (PUC) proceedings. Intervenors have the right to cross-examine witnesses and to submit expert testimony as recognized parties, formally amplifying local communities’ voices, and ensuring customers receive the safe, reliable, and affordable service they are entitled to.

Empower Communities

• Draft Community Benefit Agreements: Help local groups negotiate CBAs that include specific, enforceable commitments for local hiring, noise limits, community investments, upfront financial commitments for grid upgrades, and contingency funds in case of project abandonment.
• Develop Coalitions: Form coalitions with organizations that are aligned on specific issues to maximize advocacy impact.
• Coordinate Public Record Requests: Leverage state-level freedom of information laws to request project documentation, identify stakeholders, and ensure communities have the necessary information to make informed decisions about proposed developments.

Additional Resources: Data Center Regulation Tracker · Database of Emerging Large-Load Tariffs · Community Benefit Agreements · Heatmap

While much of U.S. energy and AI infrastructure construction is regulated at the state and county levels, federal lawmakers have levers for securing a responsible nationwide data center buildout in support of their constituents.

Download the Federal guide (PDF)

Distinct state and local approaches to data center regulation and incentivization across the country have led to a race to the bottom, minimizing community benefits while maximizing hyperscaler gains. Even though many of the states in which data centers are currently clustered are the result of choices made by state and local governments, Congress faces increased constituent pressure to act, and twelve relevant bills were introduced between January 1, 2026 to March 31, 2026. This indicates an increased appetite for federal action to address these negative externalities, even though many of these siting decisions traditionally fall within state and local jurisdiction.

There are substantive issues related to federalism at play on this issue, but members of Congress have a number of pre-existing federal authorities they could utilize to help bring relief to their constituents:

Authorities

• The Energy Information Administration (EIA) has information collection authorities for major energy consumption, and has launched pilots to start collecting information on data centers’ energy sources, electricity consumption, and cooling systems. The collection and publication of aggregated energy-use statistics can provide grid planners and lawmakers with insight into data center load behavior and utility needs. EIA also informs the public on energy-related concepts through “Energy Explained.”
• The Federal Energy Regulatory Commission (FERC) regulates the wholesale interstate electricity market. FERC also has a statutory obligation to ensure all rates, charges, and jurisdiction of electric service are “just and reasonable,” though what constitutes these terms is mostly up to the Commissioners’ discretion and prevailing case law.
• The North American Electric Reliability Corporation (NERC) could set mandatory reliability standards to address data center loads’ unique grid demand and novel load behavior. FERC would then approve these standards.
• The Department of Energy (DOE) conducts research into data centers’ grid impacts; produces national resource adequacy and grid risk assessment reports; develops efficiency studies; protects the grid by serving as the Sector Risk Management Agency (SRMA) for energy; and, under recent executive orders, can select specific federal sites for AI data center construction and energy co-location.
• The Environmental Protection Agency (EPA) can set pollution standards in accordance with existing laws, such as the Clean Air Act.
• The Nuclear Regulatory Commission (NRC) licenses and oversees civilian nuclear reactors, which hyperscalers are increasingly considering as power sources for their data centers.

Areas for Potential Action