Project Focus: Data Centers (U.S. and Pennsylvania)
Overview: Data centers – the massive facilities housing computer servers that power everything from cloud storage to artificial intelligence – saw explosive growth in 2025, and with it came intense scrutiny. Nationally, the U.S. is in the midst of a data center construction boom driven by surging demand for cloud computing and AI processing. Hyperscale data centers (often requiring 100+ MW of power each) are rising in clusters, bringing both economic investment and local impacts. Pennsylvania emerged as a significant new hub for data centers in 2025, attracting multi-billion-dollar commitments from tech firms and developers. This section examines trends in data center siting and development, with special focus on Pennsylvania’s experience, including environmental and energy implications, regulatory debates, and public-private infrastructure strategies.
U.S. Data Center Development Trends in 2025
Across the United States, 2025 was a record-setting year for data center expansion – and for community pushback against these projects. Major cloud providers (Amazon Web Services, Microsoft, Google) and colocation companies raced to build new server farms to meet escalating digital demand, particularly for AI computing. The scale of investment was enormous: data center construction spending was so high that it “singlehandedly drove GDP growth in the first half of 2025,” according to analysts 92 . By one count, there were 3,779 data centers in the U.S. (operational, under construction, or planned) by late 2025, including 770 in the pipeline; of those, at least 99 projects faced active local opposition 93 94 . Environmental Impacts: Data centers consume vast amounts of electricity and water, raising environmental concerns. Communities near new sites reported tangible effects – for example, some residents experienced water shortages and dry wells, which they attributed to the high water usage of nearby data centers for cooling 95 96 . Power demand is another key issue: large data centers can strain local electric grids, sometimes necessitating new power plants. Indeed, it’s estimated that U.S. data centers’ energy use grew ~22% in the past year and could double or triple in the next decade if unchecked 97 . A Cornell University study in 2025 quantified the AI-related data center boom’s projected footprint: by 2030, at current growth, AI data centers could annually emit 24–44 million tons of CO₂ (equivalent to 5–10 million cars) and use over 700 million cubic meters of water – potentially derailing tech companies’ net-zero pledges 98 99 . This research underscores why environmental groups are sounding alarms. In December 2025, a coalition of over 200 organizations (led by groups like Greenpeace and local activists) petitioned Congress for a nationwide moratorium on new data centers until regulations address energy, water, and climate impacts 59 60 . They highlighted that some utilities plan to build new natural gas plants solely to power data centers, or that data firms are installing on-site fossil generators, increasing carbon emissions 60 .
Community Opposition and Cancellations: 2025 witnessed a sharp rise in community resistance to data center projects. Concerns ranged from noise (the hum of giant cooling fans), to water use, to higher electricity rates passed on to residents. According to research by Heatmap (an energy intelligence platform), at least 25 data center projects were canceled in 2025 due to local opposition, a fourfold increase from the number of cancellations in 2024 100 101 . Those scrapped projects represented an astonishing 4.7 gigawatts of potential power demand – roughly equivalent to five big power plants – that local communities successfully blocked 100 102 . The wave of cancellations grew as the year went on (21 of the 25 occurred in the second half of 2025), indicating momentum in grassroots pushback 101 . The primary motivator cited was water usage, mentioned in over 40% of contested cases, followed by energy consumption and fear of higher utility bills 103 104 . One noteworthy political ripple: in Virginia’s November 2025 elections, a Democratic candidate flipped a traditionally Republican state legislature seat by campaigning on curbing unchecked data center growth and its burdens on the community 105 . This suggests data center siting had become a bipartisan voter issue in key areas. Even tech-friendly leaders took note: President (Donald) Trump, whose administration embraced AI and data centers, publicly acknowledged the complaints, stating “I never want Americans to pay higher electricity bills because of Data Centers,” and signaled efforts to ensure tech companies bear their power costs 106 107 . In response to mounting scrutiny, some tech companies rolled out community relations initiatives. Microsoft, for instance, announced a “Community-First AI Infrastructure” plan in January 2026 with steps to mitigate local impacts (such as investments in grid upgrades, noise reduction, and community benefit funds) 106 108 . Additionally, a few states began pioneering regulations: Minnesota passed laws in 2025 limiting energy and water consumption for new data centers (essentially setting eficiency or usage standards), and New York’s Governor was expected to propose charging data center operators higher electricity rates to fund grid improvements 109 110 . These moves at state levels represent early attempts to create a policy framework for an industry that largely had a free siting hand until now.
Siting Trends and Land Use: Traditionally, Northern Virginia (“Data Center Alley” in Loudoun County) has been the epicenter of U.S. data centers. By 2025, that region remained huge but began reaching saturation and facing local moratoria due to the very issues discussed. This led developers to fan out to new locales with cheaper land and available power. Clusters have been growing in places like central Ohio, Texas, Arizona, and increasingly the Midwest. Industry experts stress “location, location, location” – ideally low-cost energy (and increasingly renewable energy), cooler climates or ample water, tax incentives, and proximity to fiber-optic networks 111 112 . Interestingly, Cornell’s study found that many current data centers are going into water-scarce regions (Nevada, Arizona) or over-concentrated hubs (northern Virginia), which is suboptimal 111 113 . They suggest shifting future siting to water-rich, renewables-rich areas like certain Midwestern and Plains states (the “wind belt” – e.g. Texas, Montana, Nebraska, the Dakotas) to ease environmental strain 112 114 . The industry, for its part, is also exploring technological fixes: advanced cooling methods (such as liquid cooling that recycles water or uses none), on-site solar and storage to offset grid load, and more energy-eficient server hardware. However, these improvements only go so far if growth continues unabated – as one expert noted, even if each data center becomes greener, “total emissions can rise if AI demand grows faster than the grid decarbonizes” 115 116 . Hence, calls for smart planning are growing louder: encouraging data centers in regions that can support them sustainably, requiring community impact studies, and aligning them with broader infrastructure planning rather than letting market forces alone decide locations.
Pennsylvania Data Center Developments in 2025
Pennsylvania exemplifies the dual nature of data center development – huge economic opportunity coupled with significant community and environmental challenges. Rise of Pennsylvania as a Data Center Hub: In 2025, Pennsylvania catapulted into the ranks of major data center destinations. Government and private sector leaders announced an unprecedented $110 billion investment in AI, energy, and data centers for the Commonwealth 117 118 . This headline figure (which may aggregate multiple announcements, including energy infrastructure) underscores the scale: Pennsylvania is aggressively positioning itself as a leading location for the AI-driven data center industry 119 117 . Tech giants like Amazon Web Services (AWS) and investment firms like Blackstone publicized plans to spend “tens of billions of dollars” on data centers across Pennsylvania 120 . A notable deal: In 2025, AWS committed to at least a $20 billion multi-year expansion of data center capacity in PA – a move celebrated by Governor Shapiro as a win for making the state a key player in AI infrastructure 121 122 . These facilities are planned in various regions, from former industrial sites in the southwest to greenfield campuses in the east. For example, a large campus is planned outside Philadelphia comprising eight buildings and over 1.4 million square feet of server space 123 . Another venture: PowerHouse Data Centers (a developer) entered a joint venture to build three hyperscale campuses in south-central PA (Carlisle area), taking advantage of the region’s logistics infrastructure and electric grid connectivity 124 . Pennsylvania’s appeal includes relatively affordable land, abundant water resources in many areas, a mix of energy sources (including nuclear and natural gas for reliable power), and state/local incentives. Indeed, Pennsylvania has a Computer Data Center tax abatement program (sales and use tax exemption) which 2025 legislation aimed to tweak – more on that soon. The state’s rich supply of large, flat industrial sites – such as shuttered coal plants, steel mills, and logistics parks – also provides ready locations. Five of the pre-approved sites being eyed for data centers are decommissioned power plant sites, which come with existing grid infrastructure capable of handling high loads 125 126 . This strategy of reusing old power plant grounds is particularly clever: it turns brownfields into high-tech hubs, potentially easing greenfield development pressure.
Environmental and Community Concerns in PA: As data center plans proliferated, Pennsylvania residents and oficials confronted the same issues seen nationally – sometimes even more acutely. Concerns about rising electricity prices emerged front and center. The regional grid operator, PJM, saw unusual spikes in power capacity prices over two years, “largely attributed to rising power demand from data centers,” affecting 13 states including PA 87 127 . Residential customers started seeing higher bills, and in New Jersey’s and Virginia’s 2025 gubernatorial races, data center-related energy costs became a talking point 128 . In Chester County, PA, homeowners like Steve Hacker experienced wells running dry during a drought
and feared new data centers’ planned “millions of gallons” of water usage would worsen water stress 95 96 . From Allegheny County (Pittsburgh suburbs) to Lackawanna County (Scranton area), communities raised concerns in 2025 about noise, diesel backup generators’ air pollution, and potential rate hikes 129 130 . A statewide poll found 42% of Pennsylvanians did not want a data center built near their
community 131 – a striking figure illustrating public hesitation. Yet, many oficials saw data centers as inevitable or even desirable. As one state senator put it, “Let’s not go burning books; we can’t just ban data centers outright”, reflecting a view that Pennsylvania must embrace tech progress while managing downsides 132 133 . Indeed, proponents touted thousands of construction jobs and hundreds of permanent IT and maintenance jobs, plus the boost to local tax bases and indirect jobs. Pennsylvania’s leaders, including Governor Shapiro, generally welcomed data center investment – Shapiro celebrated Amazon’s massive AI infrastructure plans, framing PA as a beneficiary of the tech economy 121 122 . However, even supporters acknowledged the need for guardrails. “The number [of data centers] is likely to increase,” said one lawmaker, “so the legislature should create regulatory bodies or incentives to prioritize environmental safety” 134 135 . This captures Harrisburg’s 2025 stance: not to stop the surge, but to guide it responsibly.
Pennsylvania’s Regulatory and Policy Response: Pennsylvania moved swiftly in late 2025 to craft a comprehensive legislative response to the data center boom – arguably positioning itself as a national leader in data center regulation. In September and October 2025, legislators introduced a suite of bills collectively aiming to balance economic growth with community and environmental protection 136 137 . Key proposals included:
• Data Center Act (HB 1834): Introduced by Rep. Rob Matzie, this would empower the PA Public Utility Commission (PUC) to regulate commercial data centers as a utility-like sector, including setting minimum service contract terms and assessing fees 138 . It even proposed annual fees on data centers to fund an enhancement of LIHEAP (energy assistance for low-income households) 139 – essentially making data centers contribute to offsetting any burden on vulnerable consumers.
• Data Center Siting and Permitting Act (SB 991): Led by Sen. Camera Bartolotta, this bill aims to streamline approvals while planning smartly. It directs the Department of Environmental Protection (DEP) to pre-select at least 15 “preapproved sites” around the state ideal for data centers (including 5+ at closed power plants) and then fast-track those locations 125 126 . Under this act, data center developers at a preapproved site pay a $10,000 fee and get a notice to proceed within 3 days for site prep, with a second phase for final design approval 140 141 . Essentially, it’s a two-phase accelerated permit process to attract projects to optimal sites, reducing delays and encouraging reuse of existing industrial land.
• Load Forecasting Accountability (HB 1924): Proposed by Rep. Danilo Burgos, this would bolster the PUC’s authority to scrutinize and validate electric load forecasts that utilities submit to PJM, to prevent overestimation or “double counting” of future data center projects 142 143 . This addresses fears that utilities might over-build expensive infrastructure for anticipated data center demand that might not fully materialize – costs that could otherwise be passed to ratepayers. It’s about transparency and realistic planning for grid upgrades.
• House Six-Bill CED Package (circulated Oct 14, 2025): A group of House members drafted memos for a package focusing on community standards and impacts 144 145 . The package includes: a) requiring local ordinances on noise, setbacks, and design to mitigate data center nuisances 145 ; b) mandating water usage reporting for any data center with large water draw, with coordination through state agencies and river basin commissions to safeguard water supplies 146 147 ; c) linking state tax breaks to energy eficiency certifications (LEED, Energy Star, etc.), so only the greenest data centers get incentives 148 149 ; d) transparency requirements for operators to report energy and water use, enabling the state to publish an annual impact report 150 151 ; e) emergency preparedness mandates, like meeting fire safety standards and coordinating with local emergency services (important after some high-profile data center fires nationally) 152 ; and f) requiring prevailing wage for construction on any data center receiving the existing state sales tax exemption, to ensure those construction jobs are good-paying 153 154 .
• Protecting Ratepayers (memos by Rep. Melissa Otten, Oct 2025): These proposals would create a separate utility rate class for hyperscale data centers so that they bear the full cost of any grid upgrades they necessitate – no hidden cross-subsidies from residential customers 155 156 . They also call for annual reporting of all data center-related infrastructure costs and require that if a data center shuts down (leaving “stranded” grid investments), the company – not the public – must cover those costs 157 158 . Essentially, “data centers – not residential customers – are responsible for stranded costs” 159 . Additionally, Otten’s memo pushes the PUC to formally include “the public interest” in its review criteria, weighing reliability, affordability, and equity, not just pure cost, in decisions 160 157 .
• Green Data Center Tax Incentive (memo by Sen. Tim Kearney): Proposed tightening the state’s generous sales tax exemption: by 2030, only data centers procuring 100% of their power from renewable (Tier 1) energy would qualify, and they must meet high energy eficiency benchmarks 154 161 . This aligns incentives with the state’s climate goals.
• Local Pre-Application Meetings (memo by Senators Brown and Argall): This would require any prospective data center developer to meet with local planning, zoning oficials, and community representatives at least 30 days before formally applying 162 163 . The idea is to improve communication, let communities raise concerns early, and ensure developers have all “will-serve” letters (from water, sewer, electric providers) ready to demonstrate infrastructure readiness 164 165 . It essentially forces transparency and early community engagement.
By year’s end 2025, while these bills were in various stages (some just in committee, others in hearings), Pennsylvania had clearly signaled a path toward the most comprehensive data center governance in the nation. This balanced approach – welcoming the industry but with strong guardrails – drew “measured praise” from grid experts and even some data center proponents 166 167 . It showed in action during a January 2026 multi-state accord: Governor Shapiro and the White House agreed on measures to cap capacity prices in PJM and have tech companies fund new generation, potentially saving consumers billions and directly charging data center users for the infrastructure they require 167 89 . This unprecedented step, effectively born out of PA’s 2025 stance, represents a new model of public-private infrastructure strategy: the tech industry must partner in strengthening the grid, not just plug in and leave the public with the tab.
Pennsylvania’s Heavy Focus on PA-Specific Developments: Within the state, certain regions are hotbeds. In Northeastern PA (around Scranton/Wilkes-Barre), several proposals popped up to take advantage of cheaper land and proximity to New York’s markets. One Scranton-area resident, Emilia Doda, even built a public online map of all data center proposals in PA to keep communities informed 168 169 . Her map, launched in August 2025, garnered attention as a tool for transparency and helped link activists across counties. In Central PA, as mentioned, the Carlisle area and I-81 corridor are slated for big campuses. In the Southeast, Chester County’s East Vincent Township faced a controversy over a proposed multi-building campus in 2025 – residents like Mr. Hacker raised alarms about water withdrawal from local aquifers and urged oficials to slow down and study cumulative impacts 170 171 . Their plea echoed across town halls: “I want [the state] to slow down… I would want a moratorium on building these things,” Hacker said, encapsulating community sentiment 172 173 . Meanwhile, local leaders often saw tech investment as a boon. Many counties actively courted data centers via their economic development agencies, marketing Pennsylvania’s “abundant land, water, and energy” – indeed the state’s diverse energy mix (nuclear, gas, renewables) and relatively cool climate can be advantages 174 175 . Governor Shapiro’s administration, while regulating, also quietly worked on attracting projects to preferred sites (for example, hinting that some shuttered coal plants could be ideal with proper environmental review). This carrot-and-stick approach is designed so that Pennsylvania doesn’t lose out to states like Ohio or Virginia, but also doesn’t repeat others’ mistakes.
Environmental Mitigation and Opportunities: Pennsylvania’s engagement with data centers also opens opportunities. For instance, reusing decommissioned power plant sites for data centers could facilitate remediation of those brownfields, turning eyesores into tax-generating facilities. The requirement for renewable energy usage could, if enacted, drive more solar and wind development in PA to supply these centers, aligning with clean energy goals. Additionally, local oficials are considering district heating concepts – capturing waste heat from data centers to warm nearby buildings, which some European cities do. While not yet reality in PA, a pilot discussion was noted in 2025 in Pittsburgh about using data center heat for a university campus. If these ideas progress, data centers could integrate more into community infrastructure rather than stand apart.
In summary, Pennsylvania in 2025 embraced the data center boom but on its own terms. The state is poised to become a major data center hub thanks to massive investments and strategic location, particularly for AI-related computing. But unlike some earlier boom states, Pennsylvania is proactively setting rules to protect its residents and resources: from ensuring data centers pay their fair share for grid upgrades and don’t hike locals’ bills 89 , to mandating water use disclosures and sound barriers, to channeling projects to suitable sites (e.g., old power plants) with expedited permitting 125 176 . This heavy focus on Pennsylvania’s experience shows a microcosm of the broader debate: how to harness the economic development potential of high-tech infrastructure while safeguarding environmental sustainability and community well-being. As 2025 closed, Pennsylvania’s model of negotiation and legislation could well inform other states and federal policy as the data center trend continues into the latter 2020s.
