By: Druta Bhatt
Data centers are rapidly expanding across southwestern Pennsylvania. At least 11 new facilities have been proposed in proposed in Allegheny, Beaver, Lawrence, Washington and Westmoreland Counties — and more are expected as demand for artificial intelligence (AI) and cloud computing continues to grow.
Data centers are large warehouse-like facilities that house servers and other computing equipment, providing the digital infrastructure that powers everything from online banking and streaming services to cloud storage and AI applications.
As more businesses move online, become more data-driven, and AI technologies become increasingly common, the demand for larger, more powerful data centers has grown dramatically.
While these facilities support economic growth and technological innovation, their rapid expansion isn’t business as usual. New facilities are larger, and far more energy-intensive. Their development raises important questions about energy use, water consumption, land use, and impacts, often detrimental, on surrounding communities.
Allegheny County has 22 existing data centers, but the proposed facility in Springdale represents a new generation of development. It’s a hyperscale data center which is expected to require 180 megawatts (MW) of electricity — compared to 1 to 20 MW for a typical small- or medium-sized data center — and it can expand significantly as demand grows.
A single large AI-focused data center can consume as much electricity each year as 100,000 households. Because electric grids weren’t designed for this rapid increase in energy demand, utilities must invest in new generation, transmission, and distribution infrastructure. Those costs can ultimately be passed to households and businesses through higher utility bills.
In Pennsylvania, where much of the electricity grid still relies on fossil fuels, higher electricity demand can also contribute to increased greenhouse gas emissions.
Communities may also experience increased noise and possible depletion of water resources with those sustaining the data centers’ cooling systems. In 2024, a single large data center in Council Bluffs, Iowa used more than one billion gallons of water from the Missouri River, roughly the annual water use of 13,300 people.
Because local communities often bear many of these impacts, they should have a meaningful voice in how data centers are developed — and share in the economic benefits they generate.
Local zoning is one of the most effective tools municipalities have to regulate data centers, keep them out of residential areas, set limits on noise and keep them accountable for their water and energy use.
PennFuture has developed a model zoning ordinance for Allegheny County municipalities that outlines approaches for establishing building and operational standards that reflect local priorities.
Another, arguably less stringent tool, is negotiating a Community Benefits Agreement (CBA) between developers and the host community. Beyond mitigating societal costs of data centers, CBAs can help ensure communities receive direct investment and benefits for hosting these facilities.
Examples include AI partnerships with state and local governments, investments in local sustainability projects, and community development research funding for state universities.
Though data centers are fueling the national economy, the profits, benefits and burdens aren’t shared equally. Without thoughtful planning, the costs — including higher utility bills and environmental impacts — can disproportionately affect residents, particularly lower-income households.
Strong regulations should ensure data centers, like other businesses, support economic growth, while protecting communities and natural resources.
An informed public and meaningful community participation are essential to ensuring these projects serve the public interest.
PCRG and Pennsylvania Policy Center have partnered to produce a three-part Data Center Fact Sheet Series that:
Debunks common myths about data centers,
Examines proposed Pennsylvania legislation relating to them,
Explores how local governments can responsibly regulate data center development.
Stay tuned for the series launch in the coming weeks to learn how communities can prepare for and shape responsible data center development here at home.