Who Actually Controls Data Center Development?
Before attending a town hall, writing to a representative, or casting an informed vote, it helps to know which level of government holds power over which decision — and what questions cut through the noise. This guide maps the chain of authority from city hall to Congress.
The first line of contact for most communities. City and county governments control zoning and land use — whether a data center can be built in a given location at all. Town halls happen here. So do the initial permit approvals. Dozens of municipalities have already passed local construction pauses in 2026 as community opposition grows.
- Zoning and land use designation
- Local building permits and site approvals
- Environmental impact reviews at the local level
- Can pass local moratoriums on new construction
- Negotiates community benefit agreements with developers
Often the most consequential and least watched body. PUDs control electricity and water rates and access. When a data center wants 100 megawatts of power, the PUD decides whether — and at what cost — to provide it. In Washington and Oregon these boards are directly elected. Most residents don't know they exist, let alone who sits on them.
- Approve or deny large power connection requests
- Set rate structures — who pays for grid upgrades
- Negotiate long-term power agreements with developers
- Control water supply access in many districts
In 2025 alone, more than 200 bills were introduced across all 50 states regulating data centers — covering energy pricing, water usage, environmental standards, zoning, labor, and security. More than 40 were enacted into law. State legislatures set the rules utilities must follow, determine tax incentives for developers, and can pass statewide moratoriums or impact study requirements.
- Tax incentives — can offer or revoke property and sales tax breaks
- Statewide moratoriums on data center construction
- Mandate that developers pay for grid upgrade costs
- Require water use disclosure and permitting
- Set renewable energy requirements for large power users
Regulates utility rates and practices statewide. Oregon's POWER Act directed the Oregon PUC to create a separate rate class for data centers using 20 MW or more, ensuring infrastructure costs are paid by developers — not passed to ordinary ratepayers. Washington's equivalent is the Utilities and Transportation Commission (UTC).
- Set utility rate structures for large-load customers
- Require cost-of-service studies before approving connections
- Enforce power-purchase agreement requirements
- Protect residential ratepayers from subsidizing industrial growth
Signs or vetoes state legislation. Sets the executive tone on development vs. regulation. Controls state environmental agencies that issue water and air permits. A governor who treats data center development as economic growth vs. one who treats it as an infrastructure and environmental challenge will produce very different regulatory environments.
- Veto or sign all state legislation
- Directs state environmental and water agencies
- Sets enforcement priorities for existing law
- Can issue executive orders on permitting timelines
Oversees wholesale electricity markets and grid reliability. A November 2024 FERC order deemed it unjust for power to be diverted from the bulk market to serve a single private data center. Advocates are pushing Congress to codify this into permanent law before a future administration reverses it.
- Sets rules for wholesale electricity markets
- Governs grid reliability standards nationally
- Oversees transmission infrastructure planning
- Can require large loads to pay for their grid impact
In July 2025, President Trump issued an executive order to accelerate data center construction, easing federal regulatory burdens for facilities requiring more than 100 MW. However, these directives do not override state authority on land use, zoning, or utility regulation — and even states politically aligned with the president have advanced their own oversight bills.
- Executive orders on permitting and environmental review timelines
- Directs federal land use for data center siting
- Appoints FERC commissioners
- Can pursue federal preemption to override state and local law
No comprehensive federal data center law exists yet — which is precisely why states have rushed to fill the vacuum. Congress could establish national standards, codify grid protection rules, prohibit NDAs between developers and communities, or use federal preemption to override state and local control. Which direction Congress moves will shape everything below it.
- Can codify or nullify FERC orders into permanent law
- Set national energy efficiency standards for data centers
- Federal preemption — can override state and local zoning
- Controls federal tax treatment of data center investment
- Oversight of AI and surveillance through committee hearings
Questions Worth Asking Every Candidate
These questions apply at every level. A city council candidate and a U.S. senator should both have answers — and the quality of those answers tells you a great deal.
"Should data center developers pay for the grid infrastructure upgrades their facilities demand — or should those costs be shared by existing ratepayers?"
"Do you support requiring full public disclosure of data center proposals before approval — and prohibiting non-disclosure agreements between developers and local governments?"
"Would you support a temporary construction moratorium or mandatory environmental and water impact study before approving new large-scale data center projects in this community?"
"How will you ensure that a surge in industrial power demand from data centers does not raise electricity rates for residential and small business customers?"
"Do you support Oregon's POWER Act model — requiring large energy users to fund their own grid costs and commit to long-term power purchase agreements?"
"Should the state maintain authority over water rights and environmental review for data centers, or do you support federal streamlining that could reduce that oversight?"
"Do you support or oppose using federal preemption to override state and local zoning laws in order to accelerate data center construction?"
"Should Congress codify the 2024 FERC order protecting grid reliability from single-facility power diversion — or allow it to be reversed by a future administration?"