(This paper is part of the series Data Centers and the Next Era of Energy Regulation. Find an overview and all the related resources on the series page here.)
While data centers can bring tax revenue and economic development, they can also drive up electric rates and pollute surrounding air and water. Communities experience these impacts holistically, even though the agencies that regulate them are siloed by topic (e.g., air, water, energy). This paper focuses on how policymakers can improve cross-agency collaboration and transparency to regulate data center development more effectively.
Key takeaways include:
- Expert agencies’ narrow focus on their specific area creates challenges for regulating data centers. Siloed agencies lack a holistic view of impacts, may not engage effectively with the public and miss opportunities to improve community outcomes.
- States can and should develop collaborative regulatory frameworks. They should develop and communicate a clear, comprehensive approach, involve all agencies early in the process, ensure agencies have the authority and resources they need and establish clear and consistent transparency requirements.
- States need “coordination champions” to take charge and advocate for reform. Champions can include governors, economic development agencies and other policymakers. Data center developers also have a responsibility to demonstrate how they are proactively coordinating review across agencies.
- Several states are already taking steps to improve cross-agency collaboration and transparency. This paper explores case studies in Oregon, New York, Pennsylvania, Massachusetts, Missouri and Minnesota. While these states have different policy goals, their actions help their agencies build public trust, improve outcomes and promote the public interest.
