As people protest data centers across the Heartland, lawmakers rush to regulate development
Communities across the Midwest and South are increasingly opposing large-scale data center developments, citing concerns over water and energy usage. In response, several counties have enacted moratoriums on development, while state lawmakers are rushing to introduce and implement new regulations and pause tax incentives for data centers.
Local communities across the Heartland are increasingly protesting the rapid development of data centers, leading to a surge in legislative efforts to regulate the industry. In Champaign County, Illinois, over 100 residents successfully advocated for a one-year moratorium on data center development in April, driven by concerns over massive water and energy consumption, particularly the impact on the Mahomet Aquifer.
This trend is echoed in other areas, with Hill County, Texas; Manitowoc County, Wisconsin; and Huron County, Michigan, also enacting moratoriums on data center construction. However, not all local efforts have succeeded, as the Sangamon County Board in Illinois approved a controversial $500 million data center project despite public opposition, leading to a petition to recall board leaders. Similarly, in Festus, Missouri, half of the city council was voted out after approving a $6 billion data center deal, with new council members now working on ordinances to limit water use for such facilities.
State lawmakers are also beginning to re-evaluate incentives and regulations. Ohio Governor Mike DeWine and Illinois Governor JB Pritzker have both paused state data center tax exemptions, calling for comprehensive reviews and reforms that include electricity rates and efficiency requirements. Legislation to tighten regulations has been introduced in several states, including Illinois, Iowa, Minnesota, Oklahoma, and Wisconsin, while Michigan is considering a full repeal of its data center incentives, despite some gubernatorial support for continued development.
Experts note that local governments often struggle to manage these large-scale projects, and while federal legislation has been proposed, it is unlikely to pass. This leaves local and state governments to navigate the complex issues of water, energy, and land use, resulting in a fragmented regulatory landscape as communities and states try to balance economic development with environmental and community concerns.