For years, Ohio officials have rolled out the red carpet for data centers, the massive, cavernous buildings that house rows and rows of expensive computer equipment that’s powering the AI boom.
State and local leaders offered huge tax breaks to attract billions of dollars in investment from big tech companies like Amazon, Google and Meta. Today, Ohio is a national data center leader.
But increasingly, local officials are reassessing the projects in the face of growing public opposition.
“You hear a murmur of the word ‘data center,’ and it is standing room only in a township trustee meeting,” said Wezlynn Davis, a township trustee in Jerome Township, outside Columbus, where officials became the first local government in September to impose a moratorium on the projects.
Data centers have drawn criticism for years – namely, that they use too much water, and don’t deliver many permanent jobs in exchange for the generous tax breaks they’ve traditionally received.
But public opposition has intensified recently, according to local news accounts and developers, residents, lawyers and government officials who spoke with Signal Ohio for this story. NIMBY-style community organizing in some cases has given way to adversarial actions from local governments.
“I’ve never seen the citizens of this county so universally upset and perturbed about something as I have this particular issue,” said Gene Krebs, a former Republican state lawmaker from Preble County, where residents at least temporarily blocked a proposed data center project in October by threatening a referendum effort.
The topic has yet to cross over from a local issue to a full-blown statewide political issue in Ohio. But concerns over the facilities played a major role in the midterm elections in Virginia and Georgia last month, and political figures on the left and right increasingly are challenging them.
Rising electricity prices could explain backlash
One of the likely concerns driving the shift: rising electricity prices. PJM, the multi-state electricity market that includes Ohio, saw wholesale electrical capacity prices rise 22% in July after an 800% spike the previous year, according to Reuters. The July increase is expected to translate to a $16 monthly increase for an average residential customer in Ohio, according to the Institute for Energy Economics and Financial Analysis.
Meanwhile, tech companies have invested hundreds of billions of dollars building data centers as they compete for leadership in cryptocurrency and AI. Depending on the scale, data centers can be the size of a football stadium and require as much electricity as a small city.
The resulting boom has driven up demand for power and strained the nation’s electric grid – which many argue is responsible for the price increases.
Data centers accounted for 4.4% of all U.S. electricity usage in 2023, according to the most recent U.S. Department of Energy’s Report on U.S. Data Center Energy Use, more than double what they accounted for in 2018. In Ohio, the number was 1.58% in 2023, according to the Electric Power Research Institute.
In response to the rapid growth in construction, utilities have had to invest billions to upgrade their power grids.
Within PJM, the multi-state electricity marketplace that includes Ohio, utilities spent $4.3 billion on electricity transmission upgrades in 2024, according to Mike Jacobs, a senior energy analyst with the Union of Concerned Scientists, a national advocacy group.
This includes $1.3 billion for 37 projects in Ohio. The costs are passed on to electricity customers via higher rates, Jacobs said in an interview.
“There’s been this persistent promise from the utilities that this does not cause some part of the bills to go up,” Jacobs said. “I would submit for most of these promises, that actual experience doesn’t look anything like we thought they were.”
The data center industry pushes back
Data center companies push back on these concerns.
Amazon released a study this week that the company said showed its data centers actually drove down prices. By introducing a massive new customer, the company argues it helps spread out the cost of maintaining existing infrastructure.
The industry also says the backlash is hypercharged by broader controversy about how artificial intelligence may disrupt society. This overshadows how crucial data centers are for everyday Internet use.
“I think there’s sometimes focus on what could or couldn’t be the harms of AI throughout the economy,” said Dan Diorio, vice president of state policy for the Data Center Coalition, a trade group. He said data center companies aren’t weighing in on that debate.
“But I think that factors into some of the overarching narratives and overarching concerns with ‘’How is this facilitating a service that I’m not quite sure I think we’ll benefit from?’” Diorio said.
Industry representatives also argue recent efficiency improvements in water usage have helped lessen the facilities’ environmental impact.
Other community concerns
Other local pushback reflects typical opposition to large-scale construction projects. Wezlynn Davis, the Jerome Township trustee, said residents complain about the facilities’ noise and effect on their property values. Jerome Township is home to two huge Amazon data centers that are served by local police and fire. But they won’t pay any property taxes for years under the tax break Amazon got when the facilities were built, Davis said.
“They feel like they’re footing the bill for a mega-corporation,” Davis said.
Jerome Township passed the moratorium, which is set to expire in January 2026, as residents began discussing a referendum campaign, Davis said. A few projects are pending in the meantime, and Davis said she hopes the extra time will help air out any community concerns.
“What we’re trying to do is set the table and negotiate some items so that we don’t experience standing room-only hearings around their business plan,” she said.
Davis, a Republican who’s running for an open Ohio House seat, said she has fielded questions about her township’s moratorium from officials in communities across the state and wider region. Subsequently, Lordstown, near Youngstown, and Washington Township, also in the Columbus area, have passed similar policies.
Some concerns raised by residents veer into conspiratorial territory and reflect misunderstandings about what data centers do, according to Cary Snyder, a lawyer representing developers behind a proposed $3.6 billion data center in Lordstown.
In an interview, Snyder said he’s received emails claiming the project will result in a company selling “America’s secrets to foreign nations.” The underlying reason for the claim seems to be that developers haven’t yet disclosed the site’s potential end user, Snyder said.
“I think that’s an indication of a rush to judgment that people would think any data center is going to house high-level government secrets and sell them to enemy nations,” Snyder said. “I don’t have a response to that.”
Lordstown village council originally banned all data centers in response to the proposal in November. After the developer sued, the village changed course and dropped the ban in favor of a temporary moratorium earlier this month.
Why Ohio?
Ohio is home to 217 data centers, the fifth-most of any U.S. state, ranking behind Virginia, Texas, California and Illinois, according to DataCenterMap, a widely-used resource that tracks the industry.
Developers have been attracted here because Ohio has plenty of what data centers need: electricity capacity; flat, undeveloped land; and relatively low costs for real estate and workers.
Ohio also has passed laws to encourage these kinds of projects.
Since at least 2013, Ohio has exempted data center companies from paying sales taxes on the pricey computer equipment that makes the facilities work. These tax breaks added up to $2.5 billion from 2017 through 2024 in avoided taxes, according to an industry-backed study released by the Ohio Chamber of Commerce. Data centers also regularly receive long-term tax abatements from local communities. In exchange, the projects pumped more than $3.7 billion into Ohio’s economy during the same time, the study said.
The Ohio legislature voted over the summer to eliminate the state sales tax break – in an early sign of data centers’ emerging political vulnerability – to help pay for a broader income tax cut. But Republican Gov. Mike DeWine preserved the tax break, writing in a veto message that Ohio needs the exemption to compete “with other states for technology jobs and capital investment.”
Initially, data centers clustered near Columbus, thanks to the ready availability of farmland and proximity to Ohio State University, which helps provide the workforce needed to run the facilities once they’re built. Today, there are 133 data centers in Central Ohio, by far the most of any region of the state.
But so many data centers were built or proposed in the Columbus area that American Electric Power, the local utility, paused approvals for new projects in March 2023 after concluding it couldn’t keep up. AEP then proposed a new rule that requires data center operators to sign contracts agreeing to buy a minimum amount of electricity for a certain number of years. The change is supposed to reduce the risk that the utility will pay for expensive upgrades that never get used.
The Public Utilities Commission of Ohio approved the new rule over the summer, although the Ohio Manufacturers Association is now challenging it in court.
Data center companies look to build outside Columbus
As Columbus has become increasingly saturated with data centers, developers have started to look outside of Central Ohio for new projects.
Proposed data center projects have popped up in places like Lima, Wilmington and Ashville, a village of 4,600 people in Pickaway County, an hour south of Columbus.
In Ashville, data center company EdgeConneX wants to build a data center on 680 acres of farmland – just over a square mile – on the edge of town. Company officials haven’t detailed the exact scale of the project, but planning documents published by the Circleville Herald show the project will include 18 buildings. This includes an on-site 200-megawatt natural gas-fired power plant – a step more data center developers are taking in an attempt to bypass the electricity capacity issues faced by power companies like AEP.
The project provoked community backlash. A recent open house organized by company officials had to move to a larger venue to accommodate large public demand.
Bert Cline, the village administrator, said in an interview that EdgeConneX is seeking a property tax abatement. But it’s also offering to give the city between $35 million and $50 million to help pay for EPA-mandated upgrades to the village’s stormwater sewage system, he said.
Cline acknowledged some in the community don’t like the project.
But, he estimated paying for the sewer upgrades otherwise would require the village to charge each household around $127 a month. He also said he believes, based on deals with other communities, the company would contribute something like $10 million directly to the village and the local school system.
“It is an amazing opportunity,” Cline said. “But it’s got to be deemed safe to make sure everybody has a comfort level.”
Residents block data center project near Indiana border
In Preble County, data center developer Patrick Scanlon had sought to rezone 300 acres of farmland for limited industrial use. There was no end user lined up, which concerned local residents, according to Susan Mills Wasnack, a local farmer who actively opposed the project.
But Scanlon withdrew his rezoning application in October as residents organized a referendum campaign. Residents raised concerns about the facility’s water use, its potential long-term impact on local electricity rates and the effect the redevelopment would have on the community’s character, among other issues.
“If you look it up, agriculture is the top, or at least it was very recently, Ohio’s top industry,” Mills Wasnack said. ”Why are we saddling agriculture with something that we don’t know what’s going to be the end product?”
Scanlon, who’s based in Virginia, said he first grew interested in the site because of its proximity to electricity lines that the local utility, AES, plans to upgrade. He said the site technically was speculative, but he called it a “good bet” that a company would grow interested if the site were approved.
“I’ve yet to see a powered, zoned data center site sit on the market unattended for more than five days, and I’ve been doing this for four years,” he said, describing the intense demand for suitable locations.
Scanlon rejects the idea that data centers are being overbuilt as part of a larger financial bubble.
“I love that conversation. It keeps people out of it,” he said.
As for the opposition, Scanlon said he expects communities will become more open to data centers as they better understand improvements in modern facilities, which he said have lessened their noise and environmental impact.
He said these advances lessen the burden on residents and, in turn, help accentuate the community benefits, like tax revenue and community investment.
He remains in touch with county leaders and plans to reintroduce his project in the future.
“We live in a world where people can’t exist without data centers. They have to go somewhere,” he said.
Signal Ohio reporter Jake Zuckerman contributed to this story