Data centre construction, once concentrated in northern Virginia, has spread to rural and western regions — including Wyoming, Colorado, and Nebraska — drawing concern from localities that had previously regarded large-scale server infrastructure as outside their immediate purview.
Several factors have been cited as driving Virginia's rise as a prominent data centre destination, including robust fibre infrastructure, proximity to Washington, D.C., accessible land, and competitively priced, dependable power supplies. Comparable land availability and supporting infrastructure have drawn interest across rural states, with project developers extending expansion toward the West and into the Great Plains region.
At a recent webinar on data centres, Penn State Extension's Matt Svetz outlined the key factors behind this geographic shift, noting that access to electrical grid infrastructure — particularly high-voltage transmission lines — ranks as the foremost consideration. Svetz added that developers favour expansive, relatively level parcels of land to allow for future growth, prefer locations with lower exposure to natural hazards, and are increasingly pursuing on-site power generation options to bypass delays in connecting to the electricity grid.
The growth of artificial intelligence stands among the leading factors behind the expansion of data centre facilities, even as developers seek connection timelines that grid operators have so far been unable to match. AI-powered tools such as ChatGPT, which debuted in November 2022, alongside fraud detection systems, healthcare networks, banking platforms, and ride-hailing applications, all rely on artificial intelligence infrastructure that demands extensive data centre capacity to function.
Cleanview data shows that 1,287 data centres were in operation across the United States by August 2026, with additional facilities in the pipeline.
Proposed development of a data centre near Cheyenne, Wyoming, drew regulatory attention after a rare bacterial strain was identified in wastewater released into the city's sewer network. While the bacterium is found naturally in soil, people with weakened immune systems may face elevated health risks from exposure.
The Denver metropolitan area serves as the hub for a collection of mid-sized and smaller data facilities spread across Colorado. Municipal authorities have adopted construction restrictions and development freezes in response to community concerns. The state currently operates multiple data centres, with further facilities in the planning pipeline.
Nebraska Governor Pillen has voiced support for data centre expansion while simultaneously forming a task force to develop regulatory guidelines. LB1261, which requires that data centre operators produce their own power supply, was enacted into law.
South Dakota's SB 135 received legislative approval, prohibiting the state from curtailing municipal authority over the oversight or prohibition of data centres. In North Dakota, Republican primary contender for the Public Service Commission Chris Olon advocated for a statewide moratorium on data centres pending the establishment of a regulatory framework by the 2027 legislative session, noting that technological developments were outpacing the capacity of state residents to adapt.
Montana's SB 212, the Montana Right to Compute Act, was signed into law by Governor Gianforte in April 2025, codifying a legal entitlement to own and operate computational resources, including data centres. Under the legislation, any governmental measure placing limits on computing infrastructure is held to a standard of being demonstrably warranted and precisely scoped, a provision that curtails the authority of municipal bodies to regulate data centre placement or operations through land-use rules.
A persistent challenge in the early phases of data centre construction has involved confidentiality agreements between developers and municipal officials, executed during initial planning talks to keep proposed projects from public disclosure. Residents who discover development proposals only after contracts have been signed tend to raise heightened objections around land use, water resources, noise, and energy demands, which can erode public confidence and fuel organised resistance.
According to Michael Helbling, a staff attorney at the Penn State Center for Energy Law and Policy, local ordinance provisions represent the most accessible regulatory mechanism available to communities looking to oversee data centre expansion. Local regulations of this kind may cover where facilities can be located, permitted uses and exceptions, restrictions on plot or land area, structural setbacks, limits on building height, and requirements for developers to provide comprehensive development plans.
Legislation across numerous states bars exclusionary zoning practices, requiring jurisdictions to accommodate all lawful land uses, data centres among them. Nevertheless, where these facilities are situated and how they operate remains subject to regulatory oversight, with Helbling noting that states are moving to address permitting processes, including questions around tax incentives, zoning, and site placement.
Helbling recommended that objectives be defined with precise, thorough detail, while the question of whether local governments or a centralised state authority would hold jurisdiction over placement decisions remains open. Among the stated aims is avoiding excess capacity by guiding developments toward suitable locations, thereby reducing the need for further transmission networks or data facilities.
Utilities may also face exposure to stranded costs — fixed expenditures that remain unrecovered if a project is reduced in scope or abandoned entirely. Helbling's position is that expenses tied to data centre construction should fall entirely on the project's developers, who would also bear financial responsibility for any future infrastructure requirements. He also stated that home energy customers should not bear the financial burden of funding infrastructure or power usage tied to data centres.
Helbling further proposed mandating or offering incentives for demand response programmes so that during periods of peak grid pressure, electricity users can reduce their consumption and ease the strain on the network. Residents wishing to track data centre construction in their area are directed to review the state and local permitting processes that apply to such developments. Visiting public forums in surrounding towns can help clarify what measures have been put forward, how local authorities have responded, and which regulatory pathways remain open. Current legislation affecting data centres across various states is tracked and catalogued on the platform datacentertracker.org.
