US Data Center Backlash Puts Billions at Risk as Communities Demand More Control

A $130 Billion Warning for the AI Building Boom

At least 75 US data center projects worth approximately $130 billion were blocked or delayed by local opposition between January and March 2026, according to Data Center Watch. Another 45 projects worth nearly $68 billion faced disruption between April and June, as disputes over electricity bills, water, land and pollution spread into permit hearings, state legislatures and election campaigns.

The figures put a price on a growing problem for the companies financing artificial intelligence infrastructure: a project can attract a customer and financial backing yet struggle to win permission to operate. Banks, private equity investors and developers face uncertainty over construction schedules, power connections and community acceptance.

Data Center Watch, a project of AI intelligence firm 10a Labs, said its first quarter report recorded the largest concentration of blocked and delayed projects since tracking began in 2023. The $130 billion approached the approximately $156 billion tracked during all of 2025, reaching about 83% of that annual value in three months.

Residents are challenging more than the large buildings filled with computers. Their objections extend to the power plants, transmission lines, diesel generators and cooling systems needed to keep those computers running. Developers promote investment and jobs; nearby households want to know who will pay for new infrastructure and how their surroundings will change.

Demand for AI computing continues to draw investment. The immediate change is that access to land and capital increasingly depends on securing public acceptance and workable local rules.

Opposition Has Become a National Network

Data Center Watch counted 833 active opposition groups by March, up from 396 at the end of 2025. That increase of 437 groups represents growth of about 110%. Groups were active in 49 states, with Maryland, Ohio and Texas having the largest numbers through March.

Petition signatures collected during the first quarter nearly matched the total for the entire second half of 2025. Organizers increasingly included statewide organizations and national advocacy groups alongside residents living near proposed developments.

The resistance also began earlier. Some communities organized before developers filed applications, and others adopted temporary development bans before a company had publicly expressed interest in building locally. A moratorium is a pause that gives officials time to consider rules before approving additional projects.

Data Center Watch's second quarter report described opposition becoming more focused on individual permits, infrastructure decisions and local policies. Its count of at least 45 disrupted projects was 40% below the first quarter's 75, while the investment value fell from approximately $130 billion to nearly $68 billion. Previously delayed projects also continued to face resistance.

Communities now have several routes to slow development: challenge a zoning change, contest an air permit, seek a ballot measure or question the costs of a power connection. Each route can affect a different part of the same project's schedule.

Why Lenders Are Looking Beyond Creditworthiness

Karen Fang, Bank of America's head of global infrastructure and sustainable finance, has identified project readiness and credit quality as two considerations in financing. Readiness includes permits, approvals and support from people living near a development.

Credit quality concerns whether a borrower can repay its debt. Project readiness concerns whether the development can move ahead. A financially strong customer still needs a site with permission to build, sufficient electricity and the necessary operating approvals.

A delay can leave developers waiting to use land, buildings or equipment while financing and other expenses continue. Changes demanded during a permit review can also alter the design and cost of a project. Community disputes therefore become financial questions for banks and other investors, rather than matters handled only by local public relations teams.

Investors are adjusting to the possibility of cancellations and longer approval periods. With demand for AI computing still rising, opposition may redirect investment toward different locations or designs rather than bring the national construction boom to a halt.

Statehouses Turn From Incentives to Restrictions

More than 300 state bills concerning data centers were filed during the first six weeks of 2026, according to Data Center Watch. Statewide moratorium proposals appeared in 14 states during the first quarter, with support coming from lawmakers in both major parties.

Senator Bernie Sanders of Vermont and Representative Alexandria Ocasio-Cortez of New York also introduced a federal moratorium proposal. In Maine, Governor Janet Mills vetoed a state moratorium bill in April, showing that demands for a pause can reach a governor's desk without becoming law.

Thirty statehouses introduced legislation, resolutions or executive actions during the second quarter addressing project locations, electricity and water constraints, and how infrastructure costs should be divided. Regulatory scrutiny extended across 49 states.

The developments unfolded through several stages:

• January to March 2026: At least 75 projects worth approximately $130 billion were blocked or delayed, while opposition groups grew to 833.
• April 2026: Maine's governor vetoed a data center moratorium bill.
• April to June 2026: At least 45 projects worth nearly $68 billion faced disruption as states expanded regulatory action.
• August 2026: Pennsylvania changed its approach to permitting, while Texas ordered restrictions and audits concerning data center power connections.
• September to November 2026: Permit hearings, petition campaigns and local ballots brought individual developments into public decision making.

For developers, the rules are changing while projects are being planned. For residents, those decisions offer opportunities to seek protections before buildings and supporting infrastructure become permanent features of their communities.

Electricity Demand Reaches Beyond the Site Boundary

Lawrence Berkeley National Laboratory estimates cited in the debate put data centers at 4.7% of US electricity consumption in 2024, with projections approaching 12% by 2030. Meeting that demand can require new generating plants, substations and transmission lines.

Texas illustrates the scale of proposed connections. The Electric Reliability Council of Texas, which operates the state's main grid, was considering approximately 474 gigawatts of connection requests over the summer, about 90% from data centers. A gigawatt equals 1,000 megawatts. Connection requests describe proposed demand that grid planners must assess before projects can receive power.

Texas had 248 planned data center projects alongside 335 existing facilities. Governor Greg Abbott ordered connection restrictions and audits in August as officials confronted the volume of requests.

Ohio's proposed Ports Technology Campus near Piketon would require 10,000 megawatts, with a planned natural gas plant supplying 9,200 megawatts. Those figures show why a data center proposal can also become a debate about large power stations and their emissions.

The Environmental Integrity Project estimates that more than 80 plants burning natural gas are proposed or under construction nationally to supply data centers. Building generation close to computing facilities can address electricity shortages, while bringing additional air pollution and climate concerns to the surrounding area.

Household costs depend partly on who pays for that expansion. Ohio Representative Adam Holmes, a Republican who cochairs a legislative committee examining data centers, said lawmakers were considering protections against potential electricity and water bill increases. Infrastructure cost sharing has become a central issue because a development's benefits and expenses can reach different people.

Water Claims Depend on How a Facility Operates

Data center water use varies with cooling technology, climate and operating practices. Some facilities consume water directly to remove heat. Electricity generation can also consume water elsewhere, creating an additional demand beyond the site.

Lawrence Berkeley estimates put direct data center water consumption at 66 billion liters in 2023. Water use associated with generating their electricity was nearly 800 billion liters that year. Estimates for direct consumption by the largest facilities range from 60 billion to 124 billion liters by 2028.

Craig Sundstrom, head of energy and sustainability policy for Amazon Web Services, challenged claims of excessive consumption during Ohio legislative testimony. He said an Amazon data center "uses less water than a few car washes do annually". Residents considering a particular project still need its proposed cooling design and expected demand to understand what it would mean locally.

Lower Mount Bethel Township in Pennsylvania offers an example of a developer changing its proposal. The team behind the Lower Mount Bethel Technology Center, including Peron Development, JG Petrucci Company and Talen Energy, sought to rezone approximately 239 acres for industrial use after revising its plans.

The developers removed approximately 350 acres of agricultural land from the proposed project and concentrated the campus near existing power plants. They also proposed cooling that recirculates water in a closed system and said it would draw no cooling water from groundwater or the Delaware River.

John Callahan, Peron Development's director of business development and a former Bethlehem mayor, said the revisions responded to residents' priorities:

We are making meaningful changes to reflect their priorities for maintaining the rural and agricultural character of the community.

A township hearing on a data center ordinance was scheduled for August 17, 2026. The revisions show how opposition can change a project's footprint and engineering, alongside efforts elsewhere to stop construction entirely.

A New Jersey Permit Fight Puts Diesel Under Scrutiny

In South Brunswick, New Jersey, Sentinel Data Centers is developing a building covering 341,000 square feet on the former Princeton Nurseries site. Its draft air permit covers 12 diesel generators for backup power; Princeton officials and residents say the eventual plan includes 20 generators and approximately 400,000 gallons of diesel stored onsite.

About 100 people attended a September 23 hearing. More than two dozen spoke, all opposing the permit. Their central concern was how often the generators could operate and whether the pollution estimate captured that use.

Kip Cherry, a representative of the Sierra Club's conservation committee, challenged the calculation at the hearing:

The current permit assumes only one generator operating at a time for limited testing hours, which does not represent the facility's actual potential to emit.

Critics said the generators could also run during outages, construction, repair work and certain grid events. They sought classification as a major source of air pollution, which could require stricter limits and more extensive review than the proposed minor source classification.

The New Jersey Department of Environmental Protection's public notice described the assessed health risk as "negligible". Proposed conditions included operating hour meters, logs of generator use, fuel records and restrictions on testing during forecasts of unhealthy air.

Princeton officials pointed to nearby neighborhoods and elementary schools. Residents also identified a nursery school, senior housing and the adjacent Mapleton Preserve as places potentially affected by emissions. The building's tenant had not been publicly identified.

State officials extended the written comment deadline from October 7 to November 9. The department said it would publish responses with its final decision; no decision date was given.

Another New Jersey case has sharpened scrutiny. The state fined DataOne's Vineland facility $1.07 million after inspectors found 62 generators installed and operating without required permits. Neighbors also sued over noise. Roughly 100 New Jersey towns have banned data centers.

Pennsylvania's Dispute Extends to Homes and Power Lines

NorthPoint Development's Project Hazelnut in Hazle Township, Pennsylvania, combines a proposed campus covering 1,300 acres with a dispute over who benefits and who bears the disruption. Residents received an offer of a potential $10,000 payment each as part of a proposed $165 million investment in the township.

In neighboring Sugarloaf Township, approximately 30 properties faced threats of eminent domain connected to a proposed power line. Eminent domain is a legal process allowing property to be acquired for an authorized public use, generally with compensation. Residents formed Alliance to Stop the Line and filed 20 formal protests.

Emails identified Amazon as the proposed user. Amazon said it was evaluating several Pennsylvania locations and had no definitive agreement with NorthPoint.

Governor Josh Shapiro, who had promoted data center investment, signed an executive order in August ending accelerated permits and giving local agencies approval authority. The dispute demonstrates how a development's footprint can stretch well beyond the land occupied by its computers.

Ohio Brings the Backlash to the Ballot

Ohio had 21 local ballot measures concerning data centers, including votes on restrictions scheduled for November in 10 communities: Conneaut, Defiance, Granville, Oregon, Pataskala, Piqua, Sunbury, Upper Sandusky, Trenton and Urbana.

Conserve Ohio was also pursuing a statewide moratorium measure. By October 2, organizers had collected approximately 140,000 of the roughly 410,000 signatures needed, about 34% of the target. The earliest possible statewide vote was 2027.

Public surveys illustrate the breadth of resistance. A Gallup poll found 70% opposed construction in their communities, including 75% of Democrats and 63% of Republicans. A Bowling Green State University survey found opposition of 75% locally, 63% anywhere in Ohio and 55% anywhere in the United States.

Companies have responded by stressing economic benefits and community engagement. Thor Underdahl, Meta's data center and energy public policy manager, told an Ohio committee on June 4:

We're committed to being a good neighbor—operationally, economically, and in how we engage with communities across the state.

More than 1,500 data centers were under development alongside approximately 3,000 operating nationally, according to Pew Research Center figures. That pipeline leaves substantial room for expansion, even as individual projects face tougher scrutiny.

For communities, the coming decisions concern specific permits, land and utility costs. For investors, those same decisions determine whether promised computing capacity can open on schedule. The industry still has demand and capital, but local approval is becoming a condition that money alone cannot guarantee.

Key Points

• At least 75 projects worth approximately $130 billion were blocked or delayed in the first quarter of 2026.
• Another 45 projects worth nearly $68 billion faced disruption in the second quarter.
• Opposition groups grew from 396 to 833 by March and operated across 49 states.
• Electricity costs, water demand, diesel emissions, noise and land use are driving disputes.
• Developers face pressure to revise plans, while lenders examine permits and community support.
• New Jersey's South Brunswick permit comment deadline was extended to November 9; Ohio's statewide moratorium campaign could reach voters in 2027 at the earliest.