Why better-off cities and towns see more benefits from data centers than rural regions
A new study examines the economic impacts of data centers, finding varied benefits based on location and operator type, and potential increases in electricity prices. The article highlights growing national opposition to data center development, including legislative efforts like Maine's vetoed statewide moratorium bill and enacted tax incentive eliminations.
Across the United States, public backlash against data center development is intensifying, with over 1,200 public actions recorded by the Data Center Tracker since early 2024. Common grievances include strain on electrical grids, high water consumption, and lack of transparency.
Researchers studying technology and business strategy analyzed data center economic impacts, finding measurable benefits such as increased employment (up to 3.5%), wages (5%), and business growth (4.7%) over longer periods. However, these gains were significantly stronger in metropolitan counties with skilled workforces and existing infrastructure, while less-populated rural areas saw minimal economic improvements. The study also revealed that retail electricity prices increased by approximately 5% after a data center became operational in localized utility territories.
States are responding to the growing controversy. In Maine, lawmakers passed a bill for a statewide moratorium on new data centers, but Governor Janet Mills vetoed it, citing potential harm to a planned $550 million data center redevelopment in Jay. Mills, however, signed separate legislation eliminating state tax incentives for data centers and announced plans for a statewide council to study the industry's impacts. At least 10 other states are also considering legislation to regulate or limit future data center development.