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By Joe Edwards
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Following a “blue tsunami” during last week’s midterm elections in which Democrats wrested control of both chambers of Congress, attention is turning to how the party could use its new majorities to pursue tougher rules for the rapidly expanding data center industry.
Data centers emerged as a significant issue in races and ballot contests across the country, and several prominent Democrats campaigned on proposals to restrict development or make operators bear more of the costs associated with their facilities.
While development of such sites can create jobs, attract infrastructure investment and increase tax revenue, residents nationwide have raised concerns about their potential impact on electricity bills, water consumption and noise disrupting nearby neighborhoods.
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Newsweek spoke with several experts to explore how congressional Democrats could respond, and which measures they may prioritize. Newsweek has also contacted House and Senate leadership for both parties for comment.
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‘New Political Reality’
“Americans have expressed clear concerns over data center development,” Kathryn Kline Tyndall, associate director of the Washington, D.C.-based think-tank Bipartisan Policy Center's Energy Program, told Newsweek.
Such concerns appear to have been reflected in last week’s results. A post-midterm Newsweek analysis found that lawmakers who had most strongly supported accelerating data center development were the most likely to lose their reelection bids.
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As Newsweek reported, data centers were featured in 41 ballot measures in 10 states—including California, Florida, Illinois and New Jersey—in the midterms. In all but one measure, voters supported some form of restriction or ban.
“After last Tuesday, it is inescapable the data center industry will need to grapple with a fundamentally new political reality in months to come,” John Ashford, CEO of public affairs and public relations firm Hawthorn Group, told Newsweek.
“It will be essential that they learn to work collaboratively with communities, communicate effectively with these new lawmakers and demonstrate the crucial role they play in our everyday life. It’s a tough task, and not one they can afford to ignore and find new ways to execute.”
How Democrats Could Tighten the Rules
“While it’s too early to make sweeping predictions about what the new Congress is most likely to pursue on data center development, particularly with divided government, what some congressional Democrats have already proposed can offer some valuable insight,” Ed Tarnowski, a resident fellow in technology and innovation with the free market think tank R Street Institute, told Newsweek.
Tarnowski said that Vermont Senator Bernie Sanders—an independent who caucuses with the Democrats—and Democratic New York Representative Alexandria Ocasio-Cortez had introduced legislation that would halt the construction of new AI data centers, while New Jersey Representative Frank Pallone Jr., the top Democrat on the House Energy and Commerce Committee, had also supported a moratorium.
“A similar proposal is likely to be put forward again in the new Congress, but it is unclear how much steam it will gain,” Tarnowski said.
He also pointed to Senate Democrats blocking the Ratepayer Protection Act, which would have required states to consider standards for allocating data center electricity costs, after Minority Leader Chuck Schumer of New York called it “toothless.” Tarnowski said Democrats had instead backed stronger proposals, including the GRID Savings Act, which would require data centers demanding at least 150 megawatts to cover associated grid costs, and the bipartisan GRID Act, which would prevent new facilities demanding at least 20 megawatts from connecting to the grid.
“Actions in the current Congress paired with campaign rhetoric around data centers all suggest voluntary standards will not be enough for many congressional Democrats, making a push for more federal mandates around data centers more likely,” Tarnowski said.
Lauren Bridges, assistant professor of media studies at the University of Virginia and faculty co-lead of its Digital Technology for Democracy Lab, said the infrastructure projects represent a “multi-level governance challenge in which local, state and federal government all have a role to play.” She told Newsweek that Democrats are likely to push for reform in three areas of voter concern.
The first could involve protecting ratepayers by setting separate rate structures for data centers, “prohibiting cost-shifting,” imposing direct taxes or removing or revising tax incentives, she said.
Environmental protections could also be strengthened, Bridges said, such as via monitoring and reporting standards, water impact assessments or increasing oversight of air quality and emissions.
Increased Democratic oversight of data center approvals, including the elimination of non-disclosure agreements, forcing public disclosures and independent impact studies are another possibility, she said.
Tim Profeta, an executive in residence at Duke University's Nicholas Institute for Energy, Environment & Sustainability told Newsweek: “I would not be surprised if new Democrat leaders pause data center development so that they can evaluate how to balance community, environmental and economic needs.
"But if recent gubernatorial actions in Virginia and New Jersey are any indication, I’d expect they will seek pathways that enable responsible development.”
The Democratic governors of both states have announced frameworks for stricter accountability on the projects.
“The infrastructure investment driven by AI is a once-in-a-generation moment," he added. "Done right, it can spur investment in clean energy and grid strengthening technologies that will address our environmental and affordability challenges while allowing speed to power for data centers.
“This new generation of leaders will need time to implement policy and market strategies that will enable us to grasp this opportunity.”
Contact Newsweek editors on this story: Matthew Robinson and Dave Siminoff.
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