DATACENTERS multistate federal vs state
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Energy Cost Legislation Across States
Twenty-seven states are currently considering legislation targeting "large load" customers. Comparable legislation has already been enacted in California, Ohio, and Utah, spanning the ideological spectrum. Most of this legislation requires data center developers to bear the costs of new energy infrastructure, mirroring the goals of the Ratepayer Protection Pledge but with legal force behind them. And states are taking a look at data centers of all sizes: while the federal executive order applies only to data centers above 100 MW, many state bills establish reporting requirements for facilities with energy loads as low as 10 MW.
Water Usage Reporting Requirements
Many states are also advancing bills requiring data centers to report water usage, an issue the federal executive order does not address. Although the order directs EPA review of the Clean Water Act, that law governs discharge of pollutants into water, not water consumption or conservation. States, on the other hand, have been increasingly focused on gathering data related to water consumption by data centers.
State and Local Construction Moratoriums
The starkest departure from the federal position is the growing number of states and localities pursuing data center moratoriums. Maine is likely to become the first state to enact one, pausing new data center construction until November 2027 to allow the legislature time to study community impacts. Several other states and many localities are considering similar measures. Critically, these efforts are not driven by a single political persuasion. Local resistance to data center development has emerged in both heavily Democratic and Republican-leaning jurisdictions.
Federal permitting streamlining is also unlikely to resolve one of the most persistent bottlenecks: interconnection delays. Getting new data centers connected to the grid remains a lengthy process largely outside the scope of the executive order.
Unless the federal government chooses to attempt to exert control over issues that have historically been controlled by state policymakers, there will continue to be tension between the goals of the federal government and local communities as these projects expand.
Track State Data Center Policy
Last year, states considered hundreds of data center bills, and we expect activity to continue growing in 2026. To stay on top of this rapidly evolving landscape, we've launched MultiState Policy Watch: Data Centers – a subscription featuring legislative analysis, trend summaries, and expert insights across energy, tax, water, zoning, and other policy areas impacting data centers. Sign up here.
Authors
Morgan Scarboro
Vice President
Kim Miller
Associate General Counsel
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