Across the United States, the rapid expansion of data centers has become a flashpoint in local politics. Residents and businesses alike complain about skyrocketing utility bills and strained water supplies, and in some areas, voters have even tried to block new facilities outright. Yet the reality is that data centers are not optional—they are the backbone of the digital economy and a prerequisite for American leadership in artificial intelligence.
The tension is real: a single data center can consume as much electricity as tens of thousands of homes, and the local impact is far more acute than national averages suggest. As of 2023, data centers used about 3 percent of U.S. electricity, but that share is projected to hit 9 percent by 2030. For host communities, the concern is not the global picture but the immediate hit to their own grids and water systems.
Making Data Centers Pay Their Way
The solution is not to halt construction but to change how facilities are built and operated. Sheldon H. Jacobson, a computer science professor at the University of Illinois Urbana-Champaign, argues that developers should be required to co-invest in utility-scale renewables and dedicated microgrids. State utility commissions and local permitting authorities must enforce these conditions before construction begins, rather than relying on voluntary commitments that may never materialize.
Water is equally critical. Jacobson advocates mandatory closed-loop or reclaimed-water cooling systems, along with developer funding for local water upgrades. In the interim, impact fees tied to actual energy and water usage could offset costs for residents—either by lowering utility bills, cutting property taxes, or financing infrastructure improvements.
Community Agreements as a Trust-Building Tool
Beyond finances, communities want a say in how their land is used. Jacobson suggests that city councils and developers negotiate community benefit agreements before approval, covering traffic, noise, local hiring, and how the facility will integrate into the surrounding landscape. Without such preemptive discussions, relationships can quickly become adversarial.
Residents are right to be skeptical of promises that may outlast the officials who made them. Binding agreements signed before construction can provide the assurance that commitments will be honored. The Meta data center in northeast Louisiana offers a positive example: it pays for its power consumption with no negative impact on residents and contributes meaningfully to local tax revenue.
A National Imperative, a Local Solution
Some lawmakers, like Rep. Maxine Waters, have clashed with Treasury Secretary Scott Bessent over the administration's AI approach, highlighting the political stakes. But the core challenge remains at the local level. As Jacobson notes, the choice is not whether to build data centers—it is whether we build them right. By mandating that developers address the energy and water demands they create, we give them an incentive to become better partners with host communities, and we give communities a reason to welcome them.
This approach also aligns with broader energy policy debates. Closing or discouraging wind and solar would be a mistake, especially as data centers drive demand for power. Instead, co-investment in renewables and microgrids can help meet that demand without worsening local emissions. For communities, the promise of jobs and tax revenue—combined with enforceable safeguards—could turn opposition into support.
Ultimately, the future of AI depends on infrastructure that communities can live with. With careful planning and mandatory conditions, data centers can be both engines of innovation and good neighbors.
