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The state is poised to join a chorus of states with BYO energy policies.

With the backlash to data center development growing around the country, some states are launching a preemptive strike to shield residents from higher energy costs and environmental impacts.
A bill wending through the Washington State legislature would require data centers to pick up the tab for all of the costs associated with connecting them to the grid. It echoes laws passed in Oregon and Minnesota last year, and others currently under consideration in Florida, Georgia, Illinois, and Delaware.
Several of these bills, including Washington’s, also seek to protect state climate goals by ensuring that new or expanded data centers are powered by newly built, zero-emissions power plants. It’s a strategy that energy wonks have started referring to as BYONCE — bring your own new clean energy. Almost all of the bills also demand more transparency from data center companies about their energy and water use.
This list of state bills is by no means exhaustive. Governors in New York and Pennsylvania have declared their intent to enact similar policies this year. At least six states, including New York and Georgia, are also considering total moratoria on new data centers while regulators study the potential impacts of a computing boom.
“Potential” is a key word here. One of the main risks lawmakers are trying to circumvent is that utilities might pour money into new infrastructure to power data centers that are never built, built somewhere else, or don’t need as much energy as they initially thought.
“There’s a risk that there’s a lot of speculation driving the AI data center boom,” Emily Moore, the senior director of the climate and energy program at the nonprofit Sightline Institute, told me. “If the load growth projections — which really are projections at this point — don’t materialize, ratepayers could be stuck holding the bag for grid investments that utilities have made to serve data centers.”
Washington State, despite being in the top 10 states for data center concentration, has not exactly been a hotbed of opposition to the industry. According to Heatmap Pro data, there are no moratoria or restrictive ordinances on data centers in the state. Rural communities in Eastern Washington have also benefited enormously from hosting data centers from the earlier tech boom, using the tax revenue to fund schools, hospitals, municipal buildings, and recreation centers.
Still, concern has started to bubble up. A ProPublica report in 2024 suggested that data centers were slowing the state’s clean energy progress. It also described a contentious 2023 utility commission meeting in Grant County, which has the highest concentration of data centers in the state, where farmers and tech workers fought over rising energy costs.
But as with elsewhere in the country, it’s the eye-popping growth forecasts that are scaring people the most. Last year, the Northwest Power and Conservation Council, a group that oversees electricity planning in the region, estimated that data centers and chip fabricators could add somewhere between 1,400 megawatts and 4,500 megawatts of demand by 2030. That’s similar to saying that between one and four cities the size of Seattle will hook up to the region’s grid in the next four years.
In the face of such intimidating demand growth, Washington Governor Bob Ferguson convened a Data Center Working Group last year — made up of state officials as well as advisors from electric utilities, environmental groups, labor, and industry — to help the state formulate a game plan. After meeting for six months, the group published a report in December finding that among other things, the data center boom will challenge the state’s efforts to decarbonize its energy systems.
A supplemental opinion provided by the Washington Department of Ecology also noted that multiple data center developers had submitted proposals to use fossil fuels as their main source of power. While the state’s clean energy law requires all electricity to be carbon neutral by 2030, “very few data center developers are proposing to use clean energy to meet their energy needs over the next five years,” the department said.
The report’s top three recommendations — to maintain the integrity of Washington’s climate laws, strengthen ratepayer protections, and incentivize load flexibility and best practices for energy efficiency — are all incorporated into the bill now under discussion in the legislature. The full list was not approved by unanimous vote, however, and many of the dissenting voices are now opposing the data center bill in the legislature or asking for significant revisions.
Dan Diorio, the vice president of state policy for the Data Center Coalition, an industry trade group, warned lawmakers during a hearing on the bill that it would “significantly impact the competitiveness and viability of the Washington market,” putting jobs and tax revenue at risk. He argued that the bill inappropriately singles out data centers, when arguably any new facility with significant energy demand poses the same risks and infrastructure challenges. The onshoring of manufacturing facilities, hydrogen production, and the electrification of vehicles, buildings, and industry will have similar impacts. “It does not create a long-term durable policy to protect ratepayers from current and future sources of load growth,” he said.
Another point of contention is whether a top-down mandate from the state is necessary when utility regulators already have the authority to address the risks of growing energy demand through the ratemaking process.
Indeed, regulators all over the country are already working on it. The Smart Electric Power Alliance, a clean energy research and education nonprofit, has been tracking the special rate structures and rules that U.S. utilities have established for data centers, cryptocurrency mining facilities, and other customers with high-density energy needs, many of which are designed to protect other ratepayers from cost shifts. Its database, which was last updated in November, says that 36 such agreements have been approved by state utility regulators, mostly in the past three years, and that another 29 are proposed or pending.
Diario of the Data Center Coalition cited this trend as evidence that the Washington bill was unnecessary. “The data center industry has been an active party in many of those proceedings,” he told me in an email, and “remains committed to paying its full cost of service for the energy it uses.” (The Data Center Coalition opposed a recent utility decision in Ohio that will require data centers to pay for a minimum of 85% of their monthly energy forecast, even if they end up using less.)
One of the data center industry’s favorite counterarguments against the fear of rising electricity is that new large loads actually exert downward pressure on rates by spreading out fixed costs. Jeff Dennis, who is the executive director of the Electricity Customer Alliance and has worked for both the Department of Energy and the Federal Energy Regulatory Commission, told me this is something he worries about — that these potential benefits could be forfeited if data centers are isolated into their own ratemaking class. But, he said, we’re only in “version 1.5 or 2.0” when it comes to special rate structures for big energy users, known as large load tariffs.
“I think they’re going to continue to evolve as everybody learns more about how to integrate large loads, and as the large load customers themselves evolve in their operations,” he said.
The Washington bill passed the Appropriations Committee on Monday and now heads to the Rules Committee for review. A companion bill is moving through the state senate.
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The American climate movement is beginning to look a lot like AI doomers versus the techno-optimists. It’s a dynamic that is winning local bans – and very little else for now.
On one side, you’ve got the left-leaning insurgent grassroots movement against data centers. In many cases this push is in the name of climate action and environmental justice, with activists citing the risks of pollution from gas-fired power and the potential for strain on existing electricity supplies. But in many, many other cases, this movement is decidedly not about climate action; instead it’s a movement addressing everything from energy prices and power over large corporations to AI use generally.
Or, perhaps the anti-data center movement’s big tent is best summarized in this quote from comedian and activist Ilana Glazer: “The thing that is genuinely waiting for us on the other side of AI and data centers is the collective.”
On the other end of the spectrum, you have a raft of data center-curious centrists, liberals, and, for lack of a better term, capitalists. This diametrically oppositional political force wants to ensure data centers continue being built as states and the federal government figure out how to make policy surrounding them. Yes, they want regulations, but they’ll have to qualify even supporting the idea of a single full state – any state – pausing data centers.
“I tend to find myself in the middle of all of this AI and data center policy, because I don’t think a heavy-handed approach in either direction is smart or productive,” said Tre Easton, vice president of public affairs for the Searchlight Institute, a policy think tank geared toward pushing Democrats into positions more broadly popular in the general electorate. “If you’re doing moratoria in one state and Meta says, okay, fine, they’ll go to a different state where they’ll run roughshod.” He added: “This buildout is happening. Let’s just make the rules. Put out rules of what this should look like.”
I spent weeks talking to activists fighting data centers to better understand their end goals. Right now what folks want to talk about most is moratoria, until industry-specific regulation is in place governing all things energy, water, noise, and labor.
“Our motto is ban, legislate, regulate,” said Ben Dziobek, founder of Climate Revolution Action Network, which is fighting data center expansion in New Jersey. Dziobek’s organization is one of roughly five dozen in the Garden State that have called on newly-elected Democratic Gov. Mikie Sherill to institute a moratorium on data centers, including state representatives from The Nature Conservancy and ACLU.
When I asked Dziobek what he’d like to see after a moratorium, the answer was clear: he wants to see Big Tech pay for the energy transition. “It would be beneficial if we could get companies who are using more load than entire states to build out the clean energy future. Someone’s gotta pay for this. The largest companies in the world have to come in.”
Undoubtedly this movement is increasingly influential and rooted in a now bipartisan concern about data centers founded in valid concerns about data center impacts and the rise of AI. But at least right now, In New Jersey, and so many other Democrat-controlled states, this movement has won little ground outside the local level and no statewide Democratic leader (e.g. governor) has made a data center moratorium their raison d'être. Neither have I seen the push for a moratorium pick up steam in any state known as a deep blue bastion for climate policy. Its greatest achievements by the numbers are the cancellation rate of projects that have faced local pushback (37%, according to Heatmap Pro), the city-wide moratoria in large left-leaning bastions like Denver, and the sheer existence of a federal data center moratorium bill led by progressive celebrities like Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez.
In fact, what I am seeing is Democratic statewide leaders rejecting efforts to curtail their development or regulate energy and water usage. In California last year, Gov. Gavin Newsom vetoed a bill requiring data center developers to report their water use. In New York, Gov. Kathy Hochul has so far shrugged off a push for her to back a three-year moratorium on new data centers. In Massachusetts, Gov. Maura Healey supports continuing to foster the state’s data center buildout and the state is preserving its data center sales tax exemption at a time when GOP leaders in other states want to repeal similar subsidies. Colorado legislators abandoned a push to regulate data centers earlier this month, after Washington state did the same.
Perhaps infamously in Maine, the Democrat-led state legislature nearly enacted a two-year moratorium on data center development only to be vetoed by Gov. Janet Mills. Democrats then failed to override the veto.
Some Democratic leaders are taking up the light-touch approach. On Wednesday, Pennsylvania Gov. Josh Shapiro released long-awaited principles for data center developers seeking fast-track permitting processes with state agencies. Under these policies, companies can get permitted more quickly if they abide by a number of energy, water, and labor standards.
On a granular level, even this policy quietly represented a disappointment for climate activists. One of the principles called for data centers to get at least one third of their power from “clean” sources by 2035 – which sounds nice until you realize Shapiro only two years ago was calling for utilities to get at least half of their electricity from carbon-free sources by then. Food & Water Watch, a national group calling for country-wide data center moratoria, blasted a press release going after Shapiro to the media after the principles were released: “[This] is a naive effort to placate widespread data center opposition. It won’t work.”
For climate activists, the best case scenario right now may be blue states taking up bills to regulate the sector as opposed to a blanket moratorium, where the push for a pause functions as leverage. Often these bills are focused on energy costs for consumers, not environmental protection, like in Oregon where last year legislators enacted a measure requiring data center companies to pay for their share of electricity demand. In Vermont this week, the state legislature passed a similar bipartisan data center bill focused on energy affordability, with some restrictions on fossil fuel generation. (Republican Gov. Phil Scott is expected to sign it.)
Indeed, the climate movement’s smartest play could be to push legislation requiring facilities not only pay for their power but ensure it is zero-carbon emissions. So far, Democrat-led bills that would accomplish this goal gained steam this year in other states but struggled to become law before the end of the legislative session too (Washington, for example).
In Illinois, the bill is known as the POWER Act, but despite lots of Democratic support behind it, it’s languishing in committee limbo ahead of the end of legislative session this week. One can imagine Illinois Gov. J.B. Pritzker getting a bill like the POWER Act into law and then running for president as The Guy Who Made Data Centers Cleaner. Heaven knows that’s why folks like Hannah Flath, climate communications manager for the Illinois Environmental Council, are so bullish on the bill. “I think it’ll eventually become law. Just not this session.”
I asked Flath why her organization was so focused on this bill as opposed to a data center moratorium. “We just don’t think it is politically feasible. Especially given how attractive these things are to our governor and some state lawmakers,” she said. “Currently, I view climate work as harm reduction work. This is perhaps a cynical view to have but that’s unfortunately where we’re at. How can we ensure changes happening in the world bring more benefits than they do harms?”
But Flath said that as a push for moratoria grows, it provides pressure on state policymakers to act: “What we’re offering state legislators now is a middle ground solution.”
I suppose for now, we’ll have to see if this side can come together on any solution – let alone a middle ground.
And more of the week’s top news around development fights.
1. Jefferson County, Alabama – A law firm is alleging that police in the city of Birmingham retaliated against a woman for suing developers of a data center. It might just be a wake-up call for data center developers.
2. Mason County, Kentucky – This county is the site of yet another eminent domain debacle and I suggest you pay attention to it because it’s now represented by an outgoing congressman with nothing left to lose: Thomas Massie.
3. Montgomery County, Missouri – A Google data center project celebrated by the White House is facing harsh local backlash.
4. Iron County, Utah – Yet another county is banning data centers and solar energy.
5. Oconto County, Wisconsin – At least one developer is definitely thanking their lucky stars for state primacy over renewable permitting in the Badger State.
A conversation with Travis Fisher of the Cato Institute.
This week’s conversation is with Travis Fisher, an energy policy analyst with the Cato Institute and one of my favorite people to chop it up with on Energy Twitter. I reached out to Fisher for a conversation about how he’s approaching the data center boom as a free market-minded wonk at a time when other figures on the so-called Right are calling for strict regulations on the sector. What I learned is that folks like Fisher are concerned about the scale of the buildout too, but their ideas and approaches wildly differ from the Tucker Carlsons of the world.
As always, our conversation was edited for length and clarity.
What’s your approach to the data centers debate in the Republican camp right now?
My bias is towards free markets. So as long as we’re talking about voluntary exchanges with property rights, it's fair game.
The sticking points for me are: is cost being socialized? Is there too much special treatment, like tax credits or overt subsidies or eminent domain? All of that stuff is problematic to me.
There is a world where we have massive expansion and it's still very consistent with my view of how things ought to go. But I’m not sure I love the approach I’ve seen on the siting end of things. There’s stories of private land takings, or private companies taking land, and that’s very problematic for me.
I see this as a huge growth area and a huge opportunity, so the idea of pausing even for a year feels like the wrong way to go about it. There’s a lot of parallels where folks want to slow things down but in hindsight it feels like a silly thing to stop progress.
[And] it really shines a light on conservatives versus free-market people. They’re not always the same.
How do you view data centers as an opportunity for building out the energy grid?
There’s two conversations here, really: improving the grid as we know it and expanding access to power off-grid.
Data centers are very large customers if we can free up supply to increase the quantity on the grid and then reduce average costs. That’s a whiteboard approach. But I can spend all day on why the whiteboard approach to economics on the power grid does not show up in reality. If you reduce average costs, what incentives do utilities have to pass lower costs onto consumers? They’ll just maximize shareholder returns. I don’t like the status quo utility model but there is a white board approach where if we believe in a natural monopoly thesis, then an expansion on the demand side moves you further down a downward sloping supply curve.
If you buy this argument, there’s an opportunity to cut costs. But I’m skeptical of that argument.
You’ve advocated for consumer regulated electricity reform in this situation. How does that relate?
This is the second prong, the off-grid solution. We have customers that want to move faster than the grid allows. We have a very regulated grid which is not compatible with the fast growth these customers want. And they have an enormous willingness to pay for that speed-to-power, so in terms of their opportunity cost, this sets up an opportunity to essentially build new power networks. If you’re a private utility and not a public utility, public utility regulations should not apply to you. And if you can build a private utility without oversight from Public Utility Commissioners or FERC, you’re free to innovate. Then this all becomes a new sector we can transfer learnings from back to the grid.
This idea – which I’ve seen you describe to my colleague Matthew Zeitlin – does it require policy change?
Yes, but it depends on what state. Ohio, Utah, and Oklahoma, maybe West Virginia… Those states already have systems kind of like this. It’s why you may be seeing private [energy and data center] networks there. In Ohio, at the New Albany site. In Utah, which is its own thing. But there are already state laws trending in this direction.
My view on this is you need a reform at the state level saying if you’re a private utility, you’re not under the jurisdiction of the PUC. At the federal level, it would mean the regs that do not apply to the bulk system do not apply to you.
So then, is your goal to create “power islands” here off grid using the free market?
The goal is to be as pro-consumer and free market and fast-moving as possible. This policy change would open that avenue and make it clear this is a greenlit activity. A thing that can happen and investors have certainty they won’t be side-swiped later.
I think we’re approaching the point where a lot of observers recognize the status quo is untenable. They say we had [utility] restructuring and now the status quo is untenable after restructuring, so let’s re-vertically integrate utilities or nationalize them. Those are all terrible, terrible, awful options. But the moment is so dire that a lot of bad ideas are on the table. I’m trying as hard as I can to parse the free market ideas from pro-utility ideas.
Vertical integration – where’s the momentum against that situation? I understand you’re trying to combat monopoly here, without being too heavy-handed from a regulatory level.
Even in a vertically integrated space, there’s pro-consumer reforms and consumer choice. Consumer-regulated electricity would do that in a clean and aggressive way but there is plenty you can do to tinker. How do we fight back against incumbent utilities? There’s many answers to that question but the last thing we should do responding to data centers is give them more control.
For example, the one thing we absolutely cannot do is reintrench the franchise. If a state says nobody else can be a utility in this state, why is that even a thing in the year 2026? That is backwards thinking, 100-year-old thinking we need to move on from.
My last question, since you keep bringing this conversation to utilities, is… why are we seeing so much upset in the utility sector?
I can only answer on my own behalf: They are monopolies. Since when was a monopoly industry friendly to free-market thinking? It’s historically been friendly to conservatives, because of the status quo bias, and I’m trying as best as I can to cleave the conservatives off being pro-utility because if you’re free market and conservative you shouldn’t like what they’re doing.
If you’re pro-consumer, you don’t like whatever the incumbent set up is. There’s an element of both the left and the right seeing this.
As rates go up, and as problems persist, we’re not getting anything more even though we’re paying more. It’s not a good environment for the utilities, who want to keep things the way they are.