Before Approving a Data Center, Experts Say Communities Should Ask Tough Questions

Residents should examine water sources, drought restrictions, peak power demand, tax incentives, permanent jobs, noise limits, expansion plans, and enforceable decommissioning requirements before approving a project.

NASHVILLE, TENN. (RFD NEWS) — Massive data centers can bring tax revenue and new investment to rural communities, but their water and electricity needs may compete with farms, homes, and existing businesses during drought and peak summer demand.

Cooling design largely determines direct water use. Evaporative systems can consume substantial water, while dry, hybrid, recycled-water, and closed-loop systems may reduce freshwater demand. Electrical needs can also require new substations, transmission lines, and generation capacity.

For producers, added industrial demand could affect utility rates, groundwater access, irrigation reliability, and local infrastructure costs. Noise from cooling equipment, transformers, backup generators, and construction may also affect nearby residents and livestock operations.

Artificial intelligence can still offer farms useful tools, including irrigation scheduling, crop monitoring, equipment diagnostics, and input management. The issue is not whether rural communities should accept or reject technology, but whether local benefits outweigh long-term resource costs.

Residents should examine water sources, drought restrictions, peak power demand, tax incentives, permanent jobs, noise limits, expansion plans, and enforceable decommissioning requirements before approving a project.

Questions Rural Communities Should Ask About Data Center Development

Water

  • How much water will the facility use annually and during peak summer demand?
  • Will it use groundwater, municipal supplies, surface water, or recycled wastewater?
  • What cooling system is planned, and how much water will it consume?
  • What restrictions apply during drought?
  • Who will verify and publicly report water use?

Electricity and Infrastructure

  • What will the facility’s peak electrical demand be?
  • Could agricultural pumps, homes, or existing businesses face higher rates or reduced reliability?
  • Who pays for new substations, transmission lines, pipelines, roads, and emergency services?
  • Will backup power require regular generator operation or additional fuel storage?

Community Impact

  • How many permanent jobs will remain after construction?
  • How much tax revenue will remain after incentives and abatements?
  • What noise levels are expected at nearby homes, farms, and property lines?
  • Are nighttime noise limits and generator-testing schedules enforceable?
  • Could the facility expand without another public review?

Closure and Accountability

  • Is a decommissioning plan required before construction?
  • Will the owner post a bond or other financial assurance?
  • Who pays to remove buildings, batteries, generators, transformers, and utility connections?
  • What happens if the company sells the facility or declares bankruptcy?
  • Can the property be returned to farming, grazing, or another productive use?
  • Are company promises written into permits, contracts, or development agreements?
Farm-Level Takeaway: Rural communities need enforceable plans for water, power, noise, and closure before approving large data centers.
Tony St. James, RFD News Markets Specialist

Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

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