Assessing Data Center Policy Design: An Analysis of Variation across US States

• In Event: Assessing data center policy design and impacts

Abstract

Data centers are proliferating across the U.S. with the expanding need for data storage and processing capacity. Along with this proliferation, is a growing attention to the financial, environmental, and social benefits and impacts of data centers. In response, while state governments have historically championed data center development with various policy incentives, they are now shifting toward heightened scrutiny and oversight.  A growing number of states are proposing and enacting a range of policies to govern key aspects of data centers, including data center siting, design, energy consumption, water usage, environmental reporting, electricity tariffs, taxation, among others. States’ data center policies vary substantially in design and showcase a wide spectrum of policy instruments that policymakers can use to support or regulate different aspects of data centers. This paper evaluates the designs of data center policies that states have  proposed and enacted to systematically catalogue: (i) states’ data center policy priorities, as articulated in the aspects of data centers that policies are designed to address; (ii) common and unique policy instruments used across states; and (iii) temporal evolution in policy stance, capturing how states shift over time from growth-oriented support toward more regulatory or conditional measures, and revealing the heterogeneous stages state occupy along this trajectory.

The paper relies on a novel dataset that includes all data center bills proposed and enacted by all 50 states between 2010 and 2026 (n=816). Initial findings from an analysis of the bills shows that: (i) states differ in both the number of policies they are proposing and enacting, as well as in ways that data centers are being supported or regulated; (ii) as states increasingly pursue policies for data center regulation and incentivization, they  are prioritizing definition of data centers and fiscal measures; and (iii) many proposed data center bills fail to be enacted. 

This study provides one of the first comprehensive, nationwide mappings of state data center policies, offering a systematic account of policy priorities and instruments in an emerging policy domain. It contributes to policy research and practice by offering guidance on ways that states are variably designing policy in a nascent regulatory domain. In so doing, it offers guidance for further academic inquiry and a reference for current policymakers.

Authors

• Saba Siddiki, Syracuse University
  Presenting Author

• Fengxiu Zhang, George Mason University
  Non-Presenting Co-Author

• Ryan Westwood, Syracuse University
  Non-Presenting Co-Author

• Elan Quinn Kyser, Syracuse University
  Non-Presenting Co-Author

• Tanzia Amreen Haq, George Mason University
  Non-Presenting Co-Author

• Shuping Wang, University of Illinois, Chicago
  Non-Presenting Co-Author

• Jie Xu, George Mason University
  Non-Presenting Co-Author