Holland & Knight Pro Eyes Data Center Moratorium Bills

Land use attorney Tamsen Plume was featured in a Q&A with Law360 about state moratoriums pausing data center development and the effects of these measures on the broader data center industry. New York became the latest jurisdiction to propose such a freeze, following six other states that previously introduced data center moratorium bills to halt permitting. Ms. Plume explained that these efforts reflect community concerns about grid impacts and water, energy and resource use while also cautioning that lawmakers should expect "a very strong and negative reaction" from developers and investors who have already put millions of dollars into projects and face pressure to deliver on contracts to technology companies that serve as the end users of the space. She added that the moratoriums point to a broader trend in infrastructure development: a greater focus on a process that incorporates community input instead of the top-down approach utilized for previous large-scale projects.

"We want to make sure that people who are going to be impacted by projects have a voice and have a process and a procedure to comment on it, and that is really important," she said. "At the same time, we can go too far in each direction, and you can have so much process, so much procedure, so many rules, that you end up not achieving anything or anything fast."

Ms. Plume, who co-leads Holland & Knight's Data Center Team, also talked about the evolution of technology itself, commenting that companies have increased in size and scale to justify owning multiple properties and the equipment to cool and operate data centers has advanced sufficiently to enable multiple locations. This has also led to pushback, as "the spread is now into places that have absolutely no idea what a data center is," which can "[ignite] the fear and the reaction by the communities that really just don't know what these things are." She concluded by predicting the introduction of federal regulations to aid uniformity and noted that stakeholders are ready to address questions as they pitch projects.

"Everyone working in the space, and particularly those who are working the space from the beginning, are aware of the need to reduce and moderate the perceived and real impacts from data centers," Ms. Tamsen emphasized. "And technology, again, is just catching up very quickly, and will keep pace and will continue to improve as new data centers come online."

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