Local data center moratoriums may carry statewide consequences
Over 30 North Carolina local governments have enacted temporary moratoriums on new data center development, driven by resident concerns over electricity demand, water use, and noise. While critics warn these bans could deter investment and fail to resolve larger infrastructure questions, proponents view them as crucial for community protection. State lawmakers have also considered and taken some actions regarding statewide data center regulation, including repealing a sales tax exemption.
More than 30 local governments across North Carolina have implemented temporary moratoriums on new data center development since February, a trend spreading from rural to urban areas. Residents are organizing through social media, protests, and petitions, primarily citing concerns about data centers' high electricity and water consumption, noise pollution, and impact on local neighborhoods.
While environmental groups like the North Carolina Environmental Justice Network support these moratoriums as a means to prevent communities from being exploited by "Big Tech," critics, including Republican state Representatives David Willis and Jeff McNeely, argue that such bans are counterproductive. They contend that blocking data centers through moratoriums could lead to lost jobs and tax revenue, pushing essential AI infrastructure to other states or overseas. Business leaders, like Gary Salamido of the North Carolina Chamber, echoed these concerns, emphasizing that regulatory uncertainty could deter long-term investment in the state.
Jon Sanders from the John Locke Foundation's Center for Food, Power, and Life suggested that local moratoriums might have limited practical effect, as data centers naturally gravitate to areas with robust infrastructure, including reliable electricity, transmission lines, and water. He noted that even where viable, moratoriums might only delay projects or redirect them to neighboring jurisdictions without addressing the fundamental demand or infrastructure challenges.
North Carolina lawmakers have also addressed data center development during the 2026 legislative short session. The House passed Senate Bill 730, the Ratepayer Protection Act, which proposed sound assessments, water-use standards, and utility contract protections for data centers over 100 megawatts, but it stalled in the Senate. A House Bill (1189) for a two-year statewide moratorium on large data centers failed to advance. Ultimately, lawmakers opted for a narrower measure within the state budget, repealing the sales-and-use tax exemption on electricity consumed by data centers, a move expected to generate $21.4 million. Sanders believes statewide policy on power grid impacts is more critical than fragmented local bans.