Arkansas data center boom faces scrutiny and calls for local regulations
Data center projects in Arkansas are facing increasing scrutiny and calls for local regulations despite being hailed by officials as an economic boon. Residents and local officials in Conway, Little Rock, and Pulaski County are pushing for stricter rules on power and water usage, public input, and tax incentives. Proposed regulations and a potential moratorium are being discussed at the local level.
Data center developments in Arkansas are generating significant debate, with officials touting economic benefits while residents express growing concerns over the rapid expansion. Following an overhaul of energy permitting laws last year, five data center projects have been announced statewide, with two already under construction. However, the quick pace and secretive negotiations surrounding these projects have led to public outcry.
Key issues raised by opponents include the substantial power and water consumption of large data centers, potential impacts on utility bills, and a perceived lack of public input, often due to non-disclosure agreements with local officials. Environmental fears, such as increased noise and flood risks, are also prominent. In response to these concerns, residents in central Arkansas, including Conway and Little Rock, have actively opposed projects. Pulaski County's Quorum Court has sent proposed regulations, drafted by Democratic nominee Wendell Griffen, for a 90-day review. These regulations would mandate public notice for high-intensity digital infrastructure, disclosure of utility impacts, and a conditional-use permit process for certain data centers. Little Rock Mayor Frank Scott, Jr. also announced support for a regulatory framework for projects within the city, targeting data centers over 250,000 square feet or using more than 50 megawatts of power, requiring water usage reports and other information.
Google, which announced a data center in West Memphis, launched a $25 million “Energy Impact Fund” and is seeking community feedback for projects in the Little Rock area. State lawmakers in 2023 and 2025 expanded sales tax exemptions for data center construction, equipment, and electricity, and passed the Generating Arkansas Jobs Act to allow utilities to recover new power generation costs upfront. These incentives, which include local property tax breaks for projects like Google's in Little Rock and an unnamed center in Conway, require companies to meet minimum annual payrolls to qualify. Utility leaders maintain that costs for serving these data centers will not be passed on to existing customers.