A growing number of U.S. states are moving toward sweeping restrictions on new data center construction, as the explosive growth of facilities needed to power artificial intelligence collides with electricity shortages, water stress, rising utility bills, and intensifying political scrutiny.
What began as a series of local zoning disputes has now escalated into a statewide legislative fight, with Georgia emerging as the epicenter. Lawmakers in Maryland and Oklahoma have also introduced statewide moratorium bills in recent days, reflecting how concerns about data centers have rapidly shifted from municipal planning offices to state capitols.
In Georgia, Democratic state legislator Ruwa Romman has introduced House Bill 1012, which would halt approvals for new data centers until March next year. The pause, she said, is intended to give state, county, and municipal governments time to develop clear regulatory frameworks for an industry that “permanently alter[s] the landscape of our state.” If enacted, it would be the first statewide moratorium on new data centers in the United States.
The proposal lands at a moment when Georgia’s data center growth has reached unprecedented levels. The Atlanta metropolitan area led the nation in data center construction in 2024, driven by a convergence of cheap land, generous tax incentives, historically low power costs, and proximity to major fiber routes. That expansion, however, has placed extraordinary pressure on the state’s power grid and water systems.
Just last month, Georgia’s Public Service Commission approved Georgia Power’s request to plan for an additional 10 gigawatts of electricity generation over the coming years, the largest such request in the commission’s history. The utility cited surging demand from data centers as the primary driver. Ten gigawatts is enough to power roughly 8.3 million homes, and much of the proposed capacity is expected to come from fossil fuel sources, raising alarms among environmental advocates.
The scale of that expansion has sharpened public concern about who benefits from the data center boom and who pays the costs. Electricity rates in Georgia have risen by roughly a third over the past several years, even as data centers continue to receive tax abatements and infrastructure support. For many residents, the link between AI infrastructure and higher utility bills has become increasingly difficult to ignore.
Charles Hua, founder of PowerLines, said public perception has shifted decisively. In Georgia, he noted, the state’s regulatory structure allows Georgia Power to earn profits on new capital investments, creating incentives to build more generation capacity rather than focus on grid efficiency measures that could lower costs.
“Datacenters and utility bills are inextricably linked in the public’s mind,” Hua said, adding that efficiency improvements often lack the same financial appeal for utilities despite their potential to reduce prices.
Water use has emerged as another flashpoint. Data centers rely heavily on water for cooling, and their rapid concentration in certain regions has intensified competition with residential, agricultural, and industrial users. Local officials and residents worry about long-term water availability, particularly during drought conditions, as well as the impact of large cooling facilities on surrounding ecosystems.
The backlash has already translated into local action. At least 10 municipalities in Georgia have passed their own moratoriums on data center construction, including Roswell, an Atlanta suburb that moved earlier this month. Nationwide, municipalities in at least 14 states have enacted similar pauses, according to Tech Policy Press, signaling a broad-based resistance that extends well beyond Georgia.
The issue has also attracted national political attention. Vermont Senator Bernie Sanders proposed a nationwide moratorium last month, framing unchecked data center growth as a case study in corporate power overwhelming public interest. While the proposal faces steep hurdles, it underscores how AI infrastructure has become a mainstream political issue rather than a niche concern.
In Georgia, the debate is taking on a distinctly political edge. Romman is running for governor, and her bill explicitly ties the moratorium to upcoming elections for the Public Service Commission. Georgia is one of only 10 states where utility regulators are elected. Voters last November elected two progressive Democrats to the five-member commission, ending its all-Republican composition for the first time in nearly two decades. Another seat will be contested later this year, potentially shifting the balance of power.
Romman has argued that a pause on data center approvals would allow voters to weigh in on the direction of energy policy before the commission locks in long-term generation investments driven by tech companies. Her bill has drawn bipartisan support, with Republican lawmaker Jordan Ridley co-sponsoring the measure. Ridley said local governments need time to update zoning codes and gather public input, even as he acknowledged that data centers can bring tax revenue and high-paying jobs.
That tension runs through the entire debate. Supporters of data centers argue they anchor the digital economy, attract investment, and reinforce Georgia’s status as a technology hub. Opponents counter that the facilities employ relatively few people once built, consume disproportionate amounts of power and water, and leave local communities bearing the environmental and financial costs.
Republicans in the Georgia legislature have introduced bills aimed at protecting consumers from utility bill increases linked to data center expansion and eliminating tax breaks for the facilities. A separate Democratic proposal would require operators to publicly disclose annual energy and water consumption, a move supporters say would bring transparency to an industry that has expanded largely out of public view.
Peter Hubbard, one of the newly elected Democratic commissioners, recently captured the growing frustration in an opinion piece, writing that voters see data centers receiving incentives as their own power bills rise, communities compete for water supplies, and transmission lines depress property values. He argued that the commission’s past habit of approving every request from Georgia Power has fueled public distrust.
Environmental advocates say the stakes extend beyond Georgia. Paul Glaze of Georgia Conservation Voters said the debate could serve as a preview of future statewide elections, particularly in communities facing new data center projects.
“Anyone serious about statewide office should have a clear position on this,” he said.
The broader issue confronting states is structural. AI has dramatically increased demand for data centers at a pace that outstrips planning norms, regulatory frameworks, and infrastructure timelines. Power grids built for incremental growth are now being asked to absorb sudden, massive loads. Water systems face similar stress. As states weigh moratoriums, they are effectively grappling with how to reconcile the promise of AI-driven economic growth with finite public resources and rising voter unease.
What is unfolding in Georgia and other states suggests that the era of unchecked data center expansion is nearing its end. The political, environmental, and economic costs are now front and center, and lawmakers are signaling that the digital economy will no longer be allowed to grow without stricter oversight.
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