Daily Digest — August 20, 2026
Governors' Races Shaped by Data Center Politics Across Multiple States
Data center development is emerging as a defining issue in gubernatorial races across the country, according to El Dorado News-Times. Pennsylvania Governor Josh Shapiro announced his administration will no longer fast-track data center permits or grant tax exemptions unless projects meet strict standards on electricity costs, water usage, and community engagement. Texas Governor Greg Abbott ordered state regulators to halt projects until steps are taken to prevent data centers from raising electricity costs for residents.
Arizona Governor Katie Hobbs secured a three-year moratorium on the state's sales tax exemption for data centers, while New York Governor Kathy Hochul imposed a one-year ban on large data centers. Illinois Governor JB Pritzker halted new sales tax exemptions pending stricter operational standards. Gubernatorial nominees in Ohio and Wisconsin are also addressing data center policies on the campaign trail.
Pennsylvania Governor Shapiro Issues Executive Order on Data Center Development
Governor Shapiro signed an executive order establishing what he described as the "strictest guardrails in the nation" for data center projects, as reported by Pittsburgh's Public Source. The order requires data centers to cover full electricity costs, demonstrate advanced water-saving technology, and secure local approval before receiving state permits or tax exemptions. The governor stopped short of imposing a full moratorium on permits.
Shapiro specifically criticized "predatory developers" and cited a "community uprising" in Archbald Borough, where a developer has filed a lawsuit against the community and motions for recusal against local council members. His administration noted over 100 proposed data center projects currently in Pennsylvania.
Pennsylvania Lawmakers Target Developer NDAs with Public Officials
Data center developers in Pennsylvania are using nondisclosure agreements with local and state officials, drawing bipartisan legislative action, according to The Latrobe Bulletin and abc27.com. Spotlight PA public records requests revealed at least eight NDAs signed by township, county, and state officials for data center projects across the state.
Key examples include:
- Anthony Township Supervisor Craig High refused to sign an NDA with Talen Energy, later discovering the company planned a data center in Montour County
- Schuylkill County Board of Commissioners Chair Larry Padora signed an NDA for an Amazon project in Kline Township but said it was unenforceable under state transparency laws
- A proposed 1.4 million-square-foot data center in Limerick Township where end-user information has been withheld
Two bills are advancing through the legislature. State Sen. Tracy Pennycuick (R., Montgomery) introduced a bill to ban public agencies from signing NDAs with data center developers. State Rep. Joe Ciresi (D., Montgomery) proposed amending a tax exemption to apply only to data centers that forgo NDAs. Both bills have passed the state House with bipartisan support and await Senate consideration.
Satirical Beer Ad Highlights Data Center Water Consumption Debate
Former Eagles center Jason Kelce stars in a satirical ad for Garage Beer and Liquid Death proposing the use of urine to cool data centers, as reported by PhillyVoice. The campaign references a Gallup poll indicating 70% of Americans oppose AI data center construction in their local areas, with resource use cited as a primary objection. The ad coincides with Governor Shapiro's executive order establishing new standards for data center developers in Pennsylvania.
Indianapolis Enacts Data Center Moratorium Through End of 2027
The Indianapolis Metropolitan Development Commission unanimously approved a temporary ban on new data center construction within Marion County through December 31, 2027, according to IndyStar, Fox 59, WTHR, and WTHR. The 6-0 vote was supported by Mayor Joe Hogsett and Council President Maggie Lewis.
The moratorium follows an 18-month campaign by residents and environmental advocates, fueled in part by opposition to a withdrawn Google hyperscale facility proposal on the city's southeast side. Three data center projects previously approved this year — in Martindale Brightwood, Decatur Township, and on the east side — will proceed under existing regulations.
The Department of Metropolitan Development will hire a consultant and form an advisory committee by September to recommend public engagement steps and future zoning regulations. Councilor Michael-Paul Hart expressed concerns that proposals would simply be delayed until after the 2027 city-wide general election. Fox 59 also noted that U.S. Rep. André Carson (D-IN-7) recently introduced the AI Data Center Moratorium Act at the federal level, joined by Sen. Bernie Sanders (I-VT) and Rep. Alexandria Ocasio-Cortez (D-NY).
Indy halts new data centers through 2027 in rare win for opponents
IndyStar
Metropolitan Development Commission unanimously approves data center moratorium
Fox 59
Indianapolis leaders pass data center moratorium
WTHR
Developers are now banned from proposing new data center projects to Marion County, at least for now
WTHR
Indianapolis Considers $242M in Tax Breaks for Sabey Data Center Campus
Indianapolis economic development officials have proposed nearly $242 million in tax abatements for a data center campus planned by Seattle-based Sabey Data Centers in Decatur Township, according to Mirror Indy. Sabey and an unnamed tenant plan to invest $4.3 billion in the 130-acre, two-building facility.
The proposed incentive package includes:
- Over $49 million in real estate property tax savings over 10 years for Sabey
- $36 million in equipment tax savings over 15 years for Sabey
- Approximately $157 million in equipment tax savings over 15 years for the unnamed tenant
Sabey has committed to paying at least $29.8 million for infrastructure upgrades, including $5 million for road improvements and $24.8 million for a new aquatic center. Seven Decatur Township residents have filed a judicial review to block construction, with a virtual hearing scheduled for August 20. The Metropolitan Development Commission is set to discuss the full incentive package on September 16.
Texas House Holds Nine-Hour Hearing on Data Centers and Transmission Lines
The Texas House Committee on State Affairs held a nine-hour hearing addressing data center expansion and 765-kilovolt transmission line development, as reported by The Texas Tribune, CBS News, and Community Impact. The hearing followed Governor Abbott's early August order for a comprehensive audit of all data centers seeking to connect to the state's power grid.
ERCOT CEO Pablo Vegas told the committee the audit — covering 250 to 300 large facility proposals representing approximately 200 gigawatts of potential demand — would take several months and is expected by December. Developers will be required to provide information on tax breaks, power and water usage, community impact, and ownership.
Key developments from the hearing:
- Lt. Governor Dan Patrick and Sen. Charles Schwertner (R-Georgetown) urged the Public Utility Commission to halt the 765 kV transmission project entirely
- Industry representatives from Oncor, AEP, and CPS Energy warned of disrupted schedules and increased costs if transmission projects are delayed
- Leon County Commissioner Kyle Workman advocated for increased local authority to regulate data centers in unincorporated areas
- Lawmakers appeared committed to repealing the state's sales tax exemption for data centers, projected to cost the state $1.3 billion in uncollected taxes by 2026
- Ben Barkley, CEO of the Office of Public Utility Counsel, outlined proposed rules where large-load customers would bear a greater share of new infrastructure costs
Texas Agriculture Commissioner Calls for Moratorium, Alleges Conflict of Interest
Texas Commissioner of Agriculture Sid Miller is advocating for a one-year moratorium on new hyperscale data centers and the creation of "agriculture Freedom zones" to protect prime farmland, according to The National Desk. Miller argues that data centers, along with solar and wind farms, target productive agricultural land because of existing infrastructure.
Miller claims Texas now hosts over 500 data center facilities and warns that the state's power grid and water resources cannot support escalating demand. He has suggested data centers utilize produced water from oil and gas operations for cooling and advocated for development of small modular reactors. Miller also alleged that Governor Abbott's refusal to impose a moratorium is linked to campaign contributions from the data center industry.
Polling Shows Majority of Texans Oppose Local Data Center Development
A poll conducted by the Texas Politics Project at the University of Texas found that 56% of Texans oppose data centers in their communities, with only 29% in favor, according to KTAL News. Both Republican and Democratic lawmakers in Texas have called for a pause on new data center construction over the summer in response to public sentiment. A political scientist associated with the poll noted it remains premature to determine whether data centers will become a single-issue voter motivator.
