Data Center Q&A: Should states adopt new regulations?

Delaware is facing significant debate over proposals to build at least five data centers in New Castle County, prompting concerns about the energy demands straining the regional power grid and leading to substantial political mobilization within the state. Spotlight Delaware recently hosted an event featuring local and regional experts, including legislators from Delaware and Virginia, to discuss the impacts of these facilities. New Castle County Councilman Dave Carter detailed legislation he recently passed, defining data centers as a specific use under the county code. This ordinance restricts them to heavy industry or industrial zoning, removing "by-right" development and requiring special use approvals to impose specific conditions, including aggressive noise studies and mitigation requirements that prevent noise levels from exceeding those of established communities. Carter highlighted a significant disparity in potential tax revenue compared to Loudoun County, Virginia, noting that Delaware's current tax structure would yield substantially less while ratepayers could face increased energy costs. Virginia State Senator Kannan Srinivasan and Loudoun County Board of Supervisors Vice Chair Mike Turner shared Virginia's experience, where over 200 data centers have led to the county's budget becoming heavily reliant on data center tax revenue. Turner described a shift from initial enthusiasm to widespread public discontent, citing noise, environmental concerns, and extreme wait times (10-14 years for hyperscalers) to connect to the grid, forcing some facilities to generate their own power. Delaware Senator Stephanie Hansen emphasized Delaware's energy constraints, importing 60% of its energy, and the state's active debate on balancing potential manufacturing jobs and tax revenue from data centers against the immense energy demands and rising electricity costs for residents.