Dangerous Thoughts

Part 1: Know Before You Negotiate

A community's guide to understanding what a data center is, what it actually costs, where your leverage lives, and how to decide whether to fight, pause, or deal.

Why this chapter comes first

The single greatest advantage data center developers hold over communities is information asymmetry. They arrive with site selectors, utility consultants, land-use attorneys, and economic impact studies commissioned to their specifications. Most communities get two weeks' notice before a rezoning hearing, a glossy rendering, and a jobs number nobody can verify.

This chapter exists to flip that asymmetry. Before your community demands anything, you need to know four things:

  1. What the facility actually is — because "data center" describes everything from a 2 MW server room to a 1,000 MW campus that draws more power than a major city.
  2. What it actually consumes and produces — energy, water, noise, tax revenue, and far fewer jobs than the press release implies.
  3. Where your leverage lives — the specific legal and procedural veto points where the developer needs your yes.
  4. What your real options are — outright opposition, a moratorium to buy time, or a negotiated agreement with enforceable terms.

A community that understands these four things negotiates from strength. A community that doesn't gets a ribbon-cutting, an NDA, and a utility bill.

1.1 What a data center actually is

A data center is an industrial facility housing computer servers, storage, and networking equipment, plus the electrical and cooling infrastructure required to keep them running 24/7/365. The building itself is mostly empty of people — it is, functionally, a power-conversion and heat-rejection machine wrapped around racks of computers.

The three categories that matter to your negotiation

Hyperscale facilities. Built by cloud and AI giants — Amazon (AWS), Google, Microsoft, Meta, and AI-specialized operators like CoreWeave — to run their own workloads. These are the monsters: individual buildings of 100,000–1,000,000+ square feet, campuses drawing 100 MW to over 1,000 MW (a gigawatt — roughly the output of a nuclear reactor), often built in multi-building phases over a decade. The May 2026 Brookings study "Data Centers and Local Labor Markets" (Bahar & Wright) found these are the only category that produces meaningful local tech-sector job growth, because they create demand for local fiber installers, network operations staff, and IT contractors.

Colocation ("colo") facilities. Built by data center landlords — Equinix, Digital Realty, CyrusOne, Vantage, QTS — who lease rack space, cages, or whole suites to remote tenants. A bank in New York renting server space in your county hires nobody in your county. The same Brookings study found colocation counties see construction activity but no significant information-sector job growth — and that state incentives represent roughly 62% of total investment in colocation counties versus only ~2% in hyperscale counties. Translation: the facilities most dependent on your subsidies are the ones that deliver the least.

Edge and enterprise facilities. Smaller installations (1–20 MW) serving local latency needs or a single company. Lower impact, lower stakes — but the definitions in your zoning ordinance should still capture them, because "small" projects have a habit of phasing into large ones.

Key vocabulary for the hearing room

Term What it means Why it matters
MW (megawatt) Unit of power demand. 1 MW ≈ continuous demand of ~750–1,000 homes The single most important number in any proposal. Always demand it in writing, at full buildout
Critical IT load vs. total load IT load is the computers; total load includes cooling and overhead Developers quote the smaller number. Demand total facility load
PUE (Power Usage Effectiveness) Total facility power ÷ IT power. Industry average ~1.56; best-in-class ~1.09 A contractual efficiency benchmark you can demand
WUE (Water Usage Effectiveness) Liters of water per kWh of IT load The water equivalent of PUE — demand disclosure and a contractual cap
Evaporative cooling Cooling that consumes water by evaporating it (cooling towers, swamp coolers) The water-intensive option. Cheap for the operator, costly for your aquifer
Closed-loop / air / immersion cooling Cooling that recirculates fluid or uses outside air; minimal ongoing water draw The alternative you can demand in water-stressed regions
Substation / interconnection The grid connection point; new facilities often require new substations and transmission lines Where utility costs get socialized onto ratepayers — unless your state or contract says otherwise
Behind-the-meter generation On-site power (gas turbines, fuel cells, solar) not drawn from the grid Can mean on-site combustion, emissions, and noise — a permitting hook
Phase 1 / full buildout Projects are approved in phases; impacts are usually disclosed only for Phase 1 Always negotiate against the full buildout number, never the opening phase

The phasing trap

The most common bait-and-switch in data center development: a developer seeks approval for a modest first building, then expands under by-right zoning or administrative approvals that never return to public hearing. Lancaster, Pennsylvania residents and Virginia communities alike have learned that the project you approve is rarely the project you live with. Rule one of Part 1: every demand, every study, and every mitigation in this handbook must be scoped to full buildout, with re-opener clauses for any expansion.

1.2 The resource footprint: what the facility consumes

Energy: the defining issue of the decade

The scale is genuinely without precedent in American land-use history:

  • Lawrence Berkeley National Laboratory's 2024 report to Congress estimated U.S. data centers consumed about 176 TWh of electricity in 2023 — roughly 4.4% of all U.S. electricity — and projected consumption could reach 6.7%–12% of national electricity by 2028.
  • A January 2026 Bloom Energy analysis projects U.S. data center power demand nearly doubling from 80 GW to 150 GW between 2025 and 2028 — the equivalent of adding the entire electricity demand of Spain in three years (Consumer Reports, March 2026).
  • A single hyperscale campus can exceed the consumption of a large city. Clean Wisconsin noted one proposed campus would use more energy than one million Wisconsin homes — more than the city of Milwaukee (WJFW, May 2026).

Why this lands on your electric bill. New large loads require new generation, transmission, and substations. Under traditional utility ratemaking, those capital costs are spread across all customers. The results are already measurable:

  • In the PJM grid region (65 million people across 13 states), capacity costs jumped from $2.2 billion to $14.7 billion in a single year, with data centers responsible for nearly two-thirds of the increase (IEEFA; Brookings, May 2026).
  • U.S. residential electricity rates rose roughly 32% between July 2020 and July 2025 (S&P Global), with three PJM states — including Virginia, the densest data center market on earth — seeing rate increases of 11–16% attributed in legislative analyses to data center load (California SB 886 support letters).
  • Oregon's regulatory overhaul ended what was estimated at over $210 million in ratepayer subsidies flowing to tech companies before the state shifted to a "cost-causer pays" framework (EnkiAI policy analysis, June 2026).

This is why Part 2 of this handbook (Energy & Ratepayer Protection) is the longest: the largest single transfer of wealth from your community to the developer doesn't happen at the negotiating table — it happens silently, on every resident's monthly bill, unless you stop it.

Water: the issue developers least want to discuss

Data centers use water two ways — directly (cooling water pumped through and around the equipment, typically evaporated away in cooling towers) and indirectly (the water consumed generating their electricity, which is enormous when the power comes from fossil or nuclear steam plants).

The numbers communities should know:

  • Lawrence Berkeley National Laboratory estimated U.S. data centers directly consumed about 17 billion gallons for cooling in 2023, with projections that this could double or even quadruple by 2028 (The Conversation, Aug 2025).
  • Indirect consumption through electricity generation added an estimated 211 billion gallons in 2023 (The Network Installers compilation of LBNL data, 2026).
  • An average facility consumes roughly 300,000 gallons per day; a medium facility can use 110 million gallons per year (equivalent to ~1,000 households); a large hyperscale site can draw up to 5 million gallons per day — about 1.8 billion gallons annually, the consumption of a town of 10,000–50,000 people (EESI; Indiana University OneWater).
  • The concentration risk is real: one Google facility in The Dalles, Oregon consumed 29% of the town's entire water supply in 2022 (The Network Installers, 2026).
  • Cooling water is treated with anti-corrosion and anti-bacterial chemicals, making the evaporated and discharged portions unavailable for drinking or agriculture — it leaves your local water cycle (Indiana University OneWater fact sheet).

The disclosure problem. Companies rarely tell the public exactly how much water a specific facility uses; a 2016 survey found fewer than one-third of operators even tracked it (EESI). Operators increasingly tout fleet-wide efficiency averages (Amazon cites a 2024 fleet WUE of 0.15 L/kWh and expanding reclaimed-water use) — but a fleet average tells you nothing about your site, your aquifer, your drought year. Industry comparisons to car washes and golf courses are marketing, not hydrology: what matters is your watershed's capacity, your utility's supply contracts, and who gets curtailed first in a shortage. Part 3 of this handbook turns each of these into a specific contractual demand.

Noise, air, light, and land

  • Noise. Cooling fans, chillers, and backup generators produce a continuous low-frequency hum, 24/7. It is the most common quality-of-life complaint near operating facilities (documented extensively in Loudoun and Prince William Counties, Virginia) and the issue experts flagged when Lancaster's CBA limited residents' ability to sue over it (LancasterOnline, April 2026).
  • Diesel backup generators. A hyperscale campus may permit dozens to hundreds of diesel generators, tested regularly and run during outages — a regulated air-pollution source and your air district's permitting hook.
  • Behind-the-meter gas generation. As grid interconnection queues lengthen, developers increasingly propose on-site gas turbines — converting a "data center" into a de facto unregulated power plant. Treat any on-site combustion as a separate, fully-permitted industrial use.
  • Light and visual impact. Campus lighting, massing, and 60+ foot windowless walls adjacent to homes and farmland.
  • Land. Hyperscale campuses consume hundreds to thousands of acres, frequently farmland or forest, with impervious-surface and stormwater consequences your county engineer should model before any vote.

1.3 The truth about jobs

This is where developers' numbers are softest and communities most often get sold. The evidence base improved dramatically in May 2026, when Brookings published the first rigorous causal study of data center employment effects (Bahar & Wright, "Data Centers and Local Labor Markets" — ~770 U.S. facilities, 93 treated counties, 2003–2024, synthetic control method). What every community should internalize:

1. Permanent on-site jobs are few. A typical operating data center employs 10–30 permanent staff; large projects promise "dozens to a few hundred." For comparison, the average paper mill employs around 355 people (BLS, via WJFW/Clean Wisconsin). Construction jobs are real — often 1,000–2,500 at peak — but they are temporary, typically 18–36 months, and frequently filled by traveling specialty crews unless your agreement mandates local hiring.

2. Industry job claims are inflated roughly threefold. Brookings found that naive comparisons of data center counties to other counties — the method used in industry-sponsored economic impact studies — overstate employment effects by a factor of three, because data center counties were already growing faster before the facility arrived. When properly measured, counties receiving their first large data center see total private employment rise 4–5% over five to six years (roughly 2,000–4,000 jobs in a typical 98,000-worker county, including all spillovers).

3. Facility type determines everything. Hyperscale campuses generate real information-sector growth (up to 22%) because they create demand for local fiber, networking, and IT-services firms. Colocation facilities generate no significant information-sector growth at all — their tenants are remote. Ask which type yours is before believing any jobs claim.

4. Clusters, not single buildings, create tech ecosystems. Counties with one facility see modest total gains and no significant information-sector growth; counties with four or more see ~23% information-sector growth. A single building will not make your town a tech hub.

5. The subsidies are worst-targeted exactly where they're biggest. Hyperscalers site facilities based on power, land, water, and fiber — incentives are ~2% of their investment and almost certainly not decisive. In colocation counties, incentives are ~62% of investment — meaning your community's money matters most to precisely the facilities that deliver the least.

The negotiating implication: never accept a raw jobs number. Demand: permanent FTE count at full buildout (in writing, with clawbacks); construction job-months; local-hire percentages with verification; and wage floors. Lancaster's CBA was criticized precisely for "vague promises about jobs for locals" (LancasterOnline) — the NAACP's 2026 CBA template counters that "temporary construction contracts or outsourced tech work do not replace stable, living-wage employment."

1.4 The fiscal picture: real revenue, real giveaways

Both things are true: data centers can become a county's largest taxpayer, and the subsidy programs attached to them have grown indefensible.

The revenue side. A hyperscale campus generates substantial property tax on land, buildings, and (where taxed) computer equipment — equipment that is refreshed every 3–5 years, renewing the tax base. Northern Virginia counties fund significant portions of their budgets this way. West Des Moines' agreements with Microsoft are projected to generate over $2 billion in tax revenue (Brookings, Jan 2026). This is the genuine prize, and it's why a community with discipline can extract real value.

The giveaway side. Virginia's data center sales-tax exemption alone cost an estimated $1.6 billion in fiscal year 2025 (Cardinal News) — and Virginia, Georgia, and Oklahoma, the states that competed hardest on incentives, are now all reconsidering those programs (Brookings; MultiState). Good Jobs First and others have documented abatements granted with no clawbacks, no disclosure, and no per-job cost analysis. The 2026 legislative wave — over 300 data center bills filed in 30+ states in the first six weeks of the year (MultiState) — is largely a correction of this era.

The fiscal questions to answer before any hearing:

  • What is the net fiscal impact — revenue minus abatements, minus infrastructure costs (roads, water, fire/EMS capable of handling battery and electrical fires), minus ratepayer cost-shifting?
  • Who performed the economic impact study, and who paid for it? Demand an independent study at developer expense (the NAACP template includes exactly this provision).
  • What happens to revenue projections if the facility is decommissioned, sold, or never fully built out? (Stranded-asset risk is real: state policy analyses now explicitly warn of communities holding the bag "if the AI speculation bubble bursts" — Sierra Club, Data Center State Policies 2026.)

1.5 The leverage map: where your community holds power

Developers need things only your community can give. Each one is a veto point — and a negotiating table. In rough order of power:

1. Zoning and rezoning. Most hyperscale sites require rezoning (agricultural/residential → industrial) or a conditional/special use permit. These are discretionary acts of your elected board. No rezoning, no project. This is the master leverage point, and it is why developers spend heavily on land-use counsel and why they push counties to make data centers a by-right use — the single concession your community should never grant. Conditional use permits let you attach enforceable conditions (noise limits, water caps, setbacks, generator restrictions) that survive in perpetuity.

2. Moratoria. A temporary pause while you write rules is legal in most states, increasingly common, and powerful. As of mid-2026: more than 100 localities have enacted data center moratoria (Troutman Pepper; Sanders/AOC bill findings); at least 12 states had moratorium bills filed this cycle (Good Jobs First, April 2026); Reno extended its moratorium into 2027 after approving three facilities (Nevada Independent, June 2026); Prince George's County, MD imposed a 180-day pause after a 20,000-signature petition (TechPolicy.Press); Denver moved toward a pause to rewrite zoning, energy, and water rules (Data Center Watch, Feb 2026). A moratorium is not necessarily opposition — it is the procedural tool that converts developer urgency into community leverage. South Dakota's SB 135 explicitly affirmed local authority to regulate or ban data centers (MultiState, May 2026).

3. Water service. If the facility needs municipal water or a new well permit, your water utility or groundwater authority holds an independent veto. Water service agreements are contracts — negotiate them like contracts.

4. The state Public Utility Commission (PUC/PSC). The biggest ratepayer protections happen here, not at city hall. As of May 2026, twenty-three states have approved at least one large-load tariff requiring data centers to bear the incremental grid costs of serving them, with seven more pending (Edison Electric Institute, via Columbia Climate Law Blog, June 2026). Communities can intervene in rate cases, file comments, and demand their utility seek a protective tariff before the load arrives. At least 18 states have introduced special rate-class legislation (ArentFox Schiff; MultiState).

5. Local permits and districts. Air quality permits (those diesel generators), stormwater, building, fire code, noise ordinances, dark-sky ordinances. Each is a compliance obligation you can strengthen by ordinance before an application lands.

6. Time itself. Developer economics run on speed — interconnection queue positions, customer commitments, financing windows, GPU delivery schedules. Every month of delay costs them real money. This is why credible, organized opposition wins concessions: in the first six weeks of 2026 alone, at least four projects were cancelled in the face of local opposition (Uptime Institute), and in Pacific, Missouri a developer withdrew a $16 billion rezoning request minutes before a packed public hearing (Data Center Watch). The Uptime Institute — an industry organization — now warns developers that project approval "will hinge on local benefit guarantees."

7. Public legitimacy. Over 230 advocacy organizations signed a January 2026 letter to Congress urging a national construction moratorium (American Prospect; Uptime Institute), and Senator Sanders and Representative Ocasio-Cortez introduced the AI Data Center Moratorium Act in March 2026 (Brookings). The political environment has shifted decisively: developers know it, which is why they are investing in "trust-focused rebranding" campaigns (Uptime Institute). Your community's organized voice is leverage they now price into every deal.

Know the developer's counter-playbook

Forewarned is forearmed. Document and expect:

  • NDAs and code names. Projects arrive as "Project Sapphire" with officials sworn to secrecy and end clients never disclosed (American Prospect, Dec 2025). Demand your officials refuse NDAs that survive the application filing; "no secret deals" is now a rallying cry from Michigan to Missouri.
  • The shell LLC. The applicant is rarely the operator. Demand disclosure of the ultimate parent and end user before any discretionary approval — your enforcement rights are worthless against an empty LLC.
  • Phase 1 framing (see §1.1) and fleet-average environmental stats (see §1.2).
  • Jobs-first messaging — increasingly met with skepticism the industry itself acknowledges (Uptime Institute).
  • The "we'll go elsewhere" bluff. Sometimes true, often not: hyperscale siting is constrained by power, fiber, water, and land. If your site has those, you have more leverage than they will ever admit. And per Brookings, if the project is incentive-dependent, it's likely a colocation facility delivering minimal benefit anyway — the deal you can most afford to lose.

1.6 The decision framework: oppose, pause, or negotiate

There is no universally correct answer — a data center on a shuttered paper mill site in a town that lost hundreds of jobs is a different proposition than a gigawatt campus on prime farmland beside a subdivision (Maine's experience illustrates exactly this split — MultiState, May 2026). What's universal is the sequence:

Step 1 — Buy time. If an application is moving faster than your community's understanding, a moratorium or continuance is the first demand. You cannot negotiate what you haven't studied. Prince George's County's task-force model — pause, then study risks, benefits, and revenue potential — is replicable (TechPolicy.Press).

Step 2 — Decide honestly whether you'd take any version of this project. Good Jobs First states it plainly: communities may want to prevent data centers from being built at all, and a CBA is the compromise when a project cannot be stopped. If the answer is no — wrong site, wrong watershed, wrong scale — then organize for denial and don't be drawn into negotiating mitigations for an unacceptable project. The 2026 cancellation record proves denial is achievable.

Step 3 — If you negotiate, negotiate as a coalition with legal teeth. A Public/Community Benefit Agreement is "a legally binding agreement negotiated between a developer and local government with meaningful representation and input from a coalition of residents and community organizations" (Connect Humanity, March 2026). The standard arc: public education → community negotiation → contract drafting → implementation and enforcement (Columbia Climate Law Blog). Communities that prepare, take a regional view, and demand enforceable terms "are far more likely to secure durable gains" (Connect Humanity). Those that don't get Lancaster: real money ($20M, renewable commitments) undermined by vague job promises and limits on residents' right to sue.

Step 4 — Check your state's rules before relying on any tool. Local CBA authority varies by state, and some states (Texas among them) statutorily limit how CBAs can be used (Columbia Climate Law Blog). Other states are moving to preempt local authority entirely — track your legislature. Where local power is constrained, the PUC route and water authority route become primary.

The negotiation-readiness test

Your community is ready to negotiate when it can answer yes to all of the following:

  • We know the total MW load and water demand at full buildout, in writing
  • We know whether this is hyperscale or colocation, and who the ultimate operator and end user are
  • We have an independent fiscal and environmental analysis, paid for by the developer, controlled by us
  • We have a coalition (residents, labor, environmental, faith, business) with negotiators at the table — not just the city attorney
  • We know our state's CBA authority, large-load tariff status, and preemption landscape
  • We have identified our veto points (rezoning? CUP? water service? air permit?) and the developer's clock
  • We have agreed internally on walk-away conditions — the terms under which we organize for denial instead

1.7 The first-hearing question checklist

Bring these to the first public meeting. Refusal to answer any of them — or an NDA invoked against any of them — is itself an answer.

Identity & scale

  1. Who is the ultimate parent company and intended end user? Will you commit to disclosure before any discretionary approval?
  2. What is total facility load (MW) at full buildout — not Phase 1, not IT load?
  3. How many buildings, phases, and acres at full buildout? What approvals will each future phase require?
  4. Is this hyperscale (own workloads) or colocation (leased to tenants)?

Energy 5. Which utility will serve the facility, and has an interconnection request been filed? For how many MW? 6. What new substations, transmission lines, or generation will be required, and who pays for them? 7. Will you commit, in writing, that no infrastructure or capacity costs will be recovered from other ratepayers? (The March 2026 White House ratepayer pledge committed developers to pay for all new power delivery infrastructure their projects require — Utility Dive. Make them sign yours.) 8. Will you support our utility filing a large-load tariff at the PUC? 9. Is any on-site generation planned — gas turbines, fuel cells, diesel beyond backup? What are the run-hour limits?

Water 10. What is the cooling technology, projected daily/annual water consumption, and contractual WUE at full buildout? 11. What is the source — municipal, wells, surface water? Will you accept metering, public disclosure, a hard cap, and drought-curtailment priority below residential users? 12. Will you fund independent aquifer/watershed monitoring?

Jobs & fiscal 13. Exactly how many permanent FTEs at full buildout? Put it in the agreement with clawbacks. 14. What local-hire and prevailing-wage commitments will you make for construction, with third-party verification? 15. What incentives are you seeking, at what total cost, and will you accept clawbacks tied to verified performance? 16. Who will pay for the community's independent technical, legal, and financial experts? (The NAACP template makes this a standard demand.)

Quality of life & enforcement 17. What are the noise levels (dBA and low-frequency) at the property line, modeled at full buildout, and what continuous independent monitoring will you fund? 18. How many diesel generators, with what testing schedule and air permits? 19. What decommissioning bond will you post for end-of-life or abandonment? 20. Will every commitment you've made tonight appear in a legally binding agreement that residents — not just the city — can enforce, with no waiver of residents' right to sue?

1.8 References

Jobs and economic evidence

Energy and ratepayer protection

Water

CBAs, organizing, and legal tools

Moratoria and the political landscape

All figures current as of June 2026. State law, tariff status, and pending legislation change monthly — verify your state's status before relying on any tool described here.

Energy & Ratepayer Protection →