DATA CENTERS

Courtesy: Harvard Gazette

DATA CENTERS. In 2026 Dubuque joined the national debate centered on whether to construct a data center. Interest / concern resulted in a questionnaire mailed to each household in the community asking for input before the city council and county supervisors made a decision.

What is a Data Center? The Energy Independence and Security Act of 2007 defined a data center as "any facility that primarily contains electronic equipment used to process, store, and transmit digital information." This includes "a free-standing structure" or "a facility within a larger structure, that uses environmental control equipment to maintain the proper conditions for the operation of electronic equipment." According to IBM, data centers date back to the 1940s; the U.S. military's Electrical Numerical Integrator and Computer (ENIAC) was an early example. (1)

Over the years, computers became more size-efficient, requiring less physical space. In the 1990s, microcomputers drastically reduced the amount of space needed for IT operations. Microcomputers that began filling old mainframe computer rooms became known as “servers.” The rooms became known as “data centers.”

The advent of cloud computing in the early 2000s significantly disrupted the traditional data center landscape. Cloud services allowed organizations to access computing resources on-demand, over the internet, with pay-per-use pricing—enabling the flexibility to scale up or down as needed. In 2006, Google launched the first hyperscale data center in The Dalles, Oregon. This facility by 2025 occupied 1.3 million square feet of space and employed a staff of approximately 200 data center operators.

A study from McKinsey & Company projects the industry to grow at 10% a year through 2030, with global spending on the construction of new facilities reaching 49 billion U.S. dollars. (2)

There are different types of data center facilities. A single company might use more than one type, depending on workloads and business needs.

This Enterprise Data Center hosts all IT infrastructure and data on-premises. This model provides have more control over information security and can more easily comply with regulations like the European Union General Data Protection Regulation (GDPR) or the US Health Insurance Portability and Accountability Act (HIPAA). The company is responsible for all use, monitoring and management tasks.

Cloud data centers (also called cloud computing data centers) house IT infrastructure for shared use by multiple customers—from scores to millions—through an internet connection. Many of the largest cloud data centers—called hyperscale data centers—are run by major cloud service providers (CSPs), including Amazon Web Services (AWS), Google Cloud Platform, IBM Cloud and Microsoft Azure. These companies have major data centers in every region of the world. For example, IBM operates over 60 IBM Cloud Data Centers in various locations around the world.

Hyperscale data centers are larger than traditional data centers and can cover millions of square feet. They typically contain at least 5,000 servers and miles of connection equipment. They can sometimes be as large as 60,000 square feet.

Cloud service providers typically maintain smaller, edge data centers (EDCs) located closer to cloud customers (and cloud customers’ customers). Edge data centers form the foundation for edge computing, a distributed computing framework that brings applications closer to end users. Edge data centers are ideal for real-time, data-intensive workloads like big data analytics, artificial intelligence (AI), machine learning (ML) and content delivery. They help minimize latency, the time it takes for data to travel from one point to another, improving the application performance and customer experience. (3)

Clean Energy Group hosted a webinar on the hazards of rapid data center development and what community groups can do to mitigate harmful data center proposals. KD Minor from the Alliance for Affordable Energy in Louisiana, Julie Bolthouse from the Piedmont Environmental Council in Virginia, and Matthew Shorraw from Physicians for Social Responsibility in Pennsylvania discussed strategies and case studies from their respective states and provided crucial information on how and where to push back.

What Problems Have Been Associated with Data Centers? The main takeaways from the discussion were summarized in three points: 1) data center energy use is increasing pollution from fossil fuel power plants, 2) data center development is raising utility bills from power plants and transmission, and 3) data centers use massive amounts of water.

In Louisiana, the development of a Meta hyperscale data center called “Hyperion” led the local utility to propose three new natural gas power plants. These plans were then expedited by the Louisiana Public Service Commission, skipping the typical proposal review process. The increased gas capacity will be used to meet up to 5 gigawatts (GW) of energy demand from Hyperion, which is twice the amount of electricity used by the entire city of New Orleans on a hot summer day.

In Virginia, data centers are the main driver behind 28 GW of predicted load growth by 2050. In addition to new baseload gas plants proposed in the region, data centers generally have backup diesel generators on site. In Virginia alone, 9,000 diesel generators spewing harmful pollutants into the air are being used as backup power for data centers.

Pennsylvania leads the regional grid in energy exports, supplying electricity to data centers both in Pennsylvania and other states in the PJM region. The state’s energy portfolio is dominated by natural gas, with renewable energy only representing 4 percent of generation. Recent initiatives enacted by PJM and Pennsylvania continue to prioritize gas to meet data center-driven demand.

The current electricity rate structure doesn’t reflect the new phenomenon of data center-driven load growth. Data centers often receive discounted energy and tax rates brokered through private negotiations and strong leverage and influence because of their size. The hopes of increasing jobs has been frequently used to get support for construction. The construction of data centers requires work because these are large construction projects, but that lasts a year or two; sometimes that labor is local and unionized, and sometimes that labor is trade professionals who come in from other states. Once the data center is up and running, it requires very few people, often just 20 to 50 staff members, because the building is not an office for software developers, product managers, or marketing experts. It is a warehouse of servers. (4)

New transmission lines built to connect data centers to the massive amounts of energy they use are shared among all utility customers, leaving households and businesses with rising utility bills. In Virginia, transmission lines built for data centers cost $12 billion. New transmission lines can also jeopardize trails, riparian buffers, parks, and sometimes homes as utilities call on public and private rights-of-way and utilize eminent domain.

In Louisiana, Meta initially promised to pay 15 years of the capital costs of the new gas plants and some of the transmission upgrades necessary to power Hyperion. They later lowered their commitment to just four years, even though ratepayers will be paying back the costs of these investments for over 30 years.

In Loudon County, Virginia, data centers make up 10 percent of all water use. Their demand spikes during the hottest months, when rivers are already running low. To cool the Hyperion hyperscale data center in Louisiana, Meta requested to withdraw a total of 5.6 million gallons of water every day from local sources. (5)

Large data centers require significant energy to power their operations, leading to concerns about the large use of energy. The International Energy Agency (IEA) estimated that electricity consumption from these data centers amounts to around 415 terawatt hours (TWh), about 1.5% of global electricity consumption in 2024, at a growth rate of 12% per year over the last five years. The IEA projects this amount could double to reach around 945 TWh by 2030, growing by around 15% per year. [11] In the U.S. alone, power consumption by data centers will be "almost half of the growth in electricity demand between now and 2030." According to Terry Nguyen and Ben Green of the Michigan Environmental Justice Coalition, a single data center can "consume up to 2 megawatt hours (MWh)," the same as "the equivalent power consumption of a small town." This includes increased electricity costs.

According to a study in the academic journal Npj Clean Water, it was estimated that data centers consumed about 1.7 billion liters of water per day in 2021, with 57% drawn from potable supplies, noting that fewer than one-third of operators measured their water use. A 100-megawatt (MW) data center can use up to 2 million gallons daily. Evaporated water is not returned to the local water system. Water is also necessary to cool the power plants that provide electricity to data centers. Concerns over environmental impacts, energy and water use, and other costs have led to opposition to new data centers during the AI boom. These movements have been seen in parts of Europe, the U.S., and South America. The first report of Data Center Watch covered a period from May 2024 to March of 2025, where it was discovered that "local opposition had blocked or delayed a total of $64 billion in data center projects (six projects were blocked entirely, while 10 were delayed)." (6)

Reaction to Data Center Construction

Courtesy: Data Center Moratoriums. Online: https://www.datacenterbans.com/

Since early 2024, more than 1,200 public actions – including zoning fights, public campaigns and temporary moratoriums – have been logged by the Data Center Tracker, a public U.S. database of community responses to data center site selection. This momentum is leading to political action. In Maine, lawmakers passed a contested bill in spring 2026 that would have imposed the nation’s first statewide moratorium on new data centers. Gov. Janet Mills later vetoed the measure on grounds that it would scuttle a $550 million conversion of the closed Androscoggin Mill in the town of Jay into a data center. Mills said, however, she supported in principle a pause in development and signed separate legislation barring state tax incentives going to data centers. She also pledged to create a council to study the industry statewide. Up to 10 other states are considering similar measures to contain their expansion. (7) On July 14, 2026 Governor Kathy Hochul of New York State signed the first statewide moratorium on new hyperscale data centers. (8)

Data Centers Development in Iowa. Tech leaders like Google, Facebook and Microsoft have invested billions in data centers in Iowa. Often cited as attractions Iowa offers these companies includes the state ranking 1 in the nation in wind energy as a percentage of total power output (AWEA, 2020), a stable poower grid, a high density of telecommunications infrastructure, the state ranking 18% lower construction costs than national average (NAI Global), and its rank of #2 in lowest cost of doing business in the country (Business Facilities, 2017) Iowa is in the "Safe Zone" for low earthquake and blackout risk in Iowa. (9)

Low earthquake and blackout risk in Iowa. USGS Earthquake Hazard Program A map of the United States showing Iowa -based consultant of most earthquake and blackout risks, most of which exist in the south and west of the state of Iowa.Courtesy: Iowa Economic & Finance Authority

As of July 17, 2026 Dubuque County Supervisors remained skeptical. A study commissioned by the GREATER DUBUQUE DEVELOPMENT CORPORATION employed an Arkansas consulting firm to evaluate the economic impact locally of a data center. The firm's numbers seemed high--a center with a $12 billion capital investment would create 400 permanent jobs, 1,000 construction jobs, generate $6.2 billion of economic impact for the county and just over $200 million in state and local taxes. These were considered a 'conservative' estimate according to Jason White, the president and CEO of GDDC. (10)

A 2026 study of data center employment effects supported by the Brookings Institute found that data centers do create local jobs, with special considerations. (11) Counties that receive their first large data center see total private employment rise by 4%-5% over five to six years. Construction employment jumps 11%, and information sector employment—IT services, telecommunications, software—grows by 22%. Wages rise by 3%-4% for both existing workers and new hires, without a significant increase in home prices. At a typical treated county with 98,000 workers, these estimates imply roughly 2,000 to 4,000 additional jobs after six years, depending on facility type.

The most policy-relevant finding is that the employment effects depend on facility type. We classify facilities into two types: hyperscale (built by cloud and AI companies—Amazon, Google, Microsoft, Meta—to run their own workloads) and colocation (built by data center landlords—Equinix, Digital Realty, CyrusOne—who lease space to remote tenants). This distinction, absent from prior research and current policy, turns out to be critical.

Hyperscale counties see large information sector gains while colocation counties do not (Figure 2). A hyperscale campus creates demand for local fiber installers, network operations centers, managed service providers, and IT contractors, firms that set up nearby to serve the campus. A colocation facility leases space to remote tenants who may have no local operational presence.

Importantly, the largest information sector gains don’t come from a single facility. Specifically, counties with a single data center see modest total employment effects but no significant information sector growth. However, counties with four or more facilities see an impressive 23% increase in information sector employment, indicating that the technology ecosystem that drives these gains takes time and scale to develop. Takeaways

Communities have legitimate concerns about energy costs, water use, and environmental impact, and those concerns deserve evidence-based answers of their own. But the labor market dimension of this debate has been conducted largely without data, and our findings suggest several things policymakers should know:

• Data centers do create local jobs, though fewer than industry advocates claim. Naive estimates that fail to account for preexisting growth trends overstate the effect by a factor of three.

• Not all data centers are equal. The technology ecosystem effects that distinguish data centers from warehouses are concentrated in hyperscale investment. Colocation facilities generate construction activity but not the IT agglomeration that makes data centers a distinctive economic development tool.

• Clusters generate the largest effects. Single facilities produce modest employment gains. The information sector benefits require multiple facilities in the same area.

• Workers see modest real gains. Wages rise 3%-4% for both existing workers and new hires, with no significant effect on home prices.

• Incentives may be poorly targeted. Overall, state incentives are small relative to private investment. In hyperscale counties, incentives represent about 2% of total construction investment. Location decisions for these facilities are driven by power availability, land, and fiber infrastructure, not by tax breaks. In colocation counties, incentives represent a much larger share of total investment (62%), meaning subsidies may matter more for precisely the facilities that generate the smallest employment benefits.

Source:

1. "Data Center," Wikipedia

2. "What is a Data Center?" IBM, Online: https://www.ibm.com/think/topics/data-centers

3. Ibid.

4. Mineo, Liz, "Why are Communities Pushing Back Against Data Centers?" The Harvard Gazette, Online: https://news.harvard.edu/gazette/story/2026/04/why-are-communities-pushing-back-against-data-centers/

5. Morgan, Eva, "Three of the Biggest Harms from Irresponsible Data Center Development—and What Communities Can Do to Fight Back," Online: https://www.cleanegroup.org/data-center-development/ November 20, 2025

6. "Data Center

7. Yue, Daniel and Yiyang, Zeng,"Why Better‑off Cities and Towns See More Benefits From Data Centers Than Rural Regions " theConversation.com Online: https://theconversation.com/why-better-off-cities-and-towns-see-more-benefits-from-data-centers-than-rural-regions-286750

8. "First Statewide Moratorium on New Hyperscale Data Centers Launched by Governor Kathy Hochul," https://www.governor.ny.gov/news/first-statewide-moratorium-new-hyperscale-data-centers-launched-governor-kathy-hochul

9. "Data Centers," Iowa Economic Development & Finance Authority Online: https://opportunityiowa.gov/business/iowa-advantage/key-industries/finance-insurance/data-centers

10. Burwell, Grace, County Candidates Skeptical of Data Center Estimates," Telegraph Herald, July 17, 2026, p. 1

11. Bahar, Dany and Greg Wright, "New Evidence on Data Center Employment Effects," Brookings Institute, Online: https://www.brookings.edu/articles/new-evidence-on-data-center-employment-effects/