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.

LATEST STORIES BY THIS AUTHOR:

Wider adoption by ocean carriers could create another demand outlet for U.S. ethanol.
The new process could open the tax credit to newer and less-common biofuels.
A new route to Pacific ports could lower costs and shorten shipping times to Asian markets.
Stronger export and crush demand could help offset pressure from USDA’s record yield forecast.
Producers able to hold grain could find better marketing opportunities after the main harvest window.
Lenders are watching repayment capacity as uncertainty around crop profitability continues
New systems could give producers easier electronic access to acreage records and federal loan information.
Farm income climbed in 2025, but high production expenses continued to limit gains for producers.
EPA is considering when to restore 770 million renewable fuel credits lost through refinery exemptions.
USDA and the FTC are asking producers to share firsthand experiences with equipment sales and repair restrictions.
Charly Cummings of Superior Livestock discusses strong buyer demand, cattle market trends, and fall weaning and marketing decisions for ranchers.
Lower machinery sales reflect continued producer caution toward major equipment purchases as farm margins remain under pressure.
Agriculture Shows
Agriculture is the most important industry in the world, and Ag PhD Daily brings you the information you need to best manage your business only on RFD-TV and RFD+
Hosted by Scott “The Cow Guy” Shellady and RFD News Markets Specialist Tony St. James, Commodity Talk delivers expert insight into the day’s ag commodity markets just before the CME opens. Only on RFD-TV and Rural Radio SiriusXM Channel 147.
A look at the news, weather and commodities headlines that drove agriculture markets in the past week.