Data Center Industry Faces Growing Pushback in North Carolina

North Carolina communities are seeing a surge in opposition to new data center developments, as residents and local officials raise concerns about transparency, energy consumption, and the true economic benefits of these large facilities. The debate has intensified following a recent public relations campaign by North Carolina Connects, a group promoting data centers without initially disclosing its backing by the Data Center Coalition, a national trade group representing major tech companies such as Amazon, Microsoft, and Google.

Residents in Vance County, including Mitzi Parrott, Kathie Hamm, and Bobbie Lequire, noticed television and online ads touting the economic advantages of data centers, including claims that these facilities pay their own energy costs so local families do not have to. However, many locals questioned the accuracy of these statements and the lack of disclosure about who was funding the campaign.

Industry Campaigns and Local Skepticism

North Carolina Connects has been running ads across TV, radio, and social media to improve the industry's image amid growing public skepticism. The group is operated by the Data Center Coalition, which has formed similar organizations in other states. Despite the campaign's claims, many residents and officials say the ads omit key facts, such as the industry's previous exemption from sales tax on electricity and the confidentiality surrounding data center operations.

According to federal tax records, the Data Center Coalition's revenue grew from $304,000 in 2019 to $4.6 million in 2024, reflecting the rapid expansion of the data center industry. The coalition argues that data centers generate $1.3 billion in state and local tax revenue in North Carolina, but independent verification of these figures is difficult due to limited public disclosure.

Developers often require local governments to sign non-disclosure agreements, keeping details about energy and water use, as well as wastewater discharges, out of public view. In some cases, companies have sought to keep air permit details confidential, only relenting after regulatory pushback.

Public Resistance and Policy Changes

Recent survey data from the Annenberg Public Policy Center at the University of Pennsylvania shows that 61 percent of U.S. adults now oppose new data centers in their area, up 12 percentage points from earlier in the year. In North Carolina, this resistance has translated into action: ten counties, 17 cities, and the Eastern Band of Cherokee Indians have enacted temporary moratoria on data center development, with terms ranging from one year to 32 months.

Local governments cite unanswered questions about environmental impact, energy use, and the secrecy surrounding negotiations as key reasons for their opposition. Some companies, such as Microsoft, have responded by ending the use of non-disclosure agreements with local governments. However, many residents remain wary, noting that communities often learn about proposed projects only after key decisions have been made.

Until July, most data centers in North Carolina were exempt from paying sales tax on electricity, a benefit recently repealed by the state legislature. The exemption had allowed large projects to avoid millions in annual taxes, though data centers still retain exemptions on certain equipment purchases worth over $45 million annually.

Economic Claims and Job Creation

The data center industry often promises significant job creation and economic growth. For example, Amazon has told Richmond County officials that its planned data center will eventually employ 500 people. However, companies are not required to publicly disclose employment numbers, even when receiving tax incentives. In some cases, job figures are designated as trade secrets, limiting public oversight.

A report commissioned by the Data Center Coalition estimated that the industry created 1 million direct jobs nationwide in 2024, with 24,000 in North Carolina. The report also cited 4.5 million indirect and induced jobs, but did not provide details on pay scales or benefits, and included part-time and contract workers who may not receive full employment benefits.

Despite these claims, many North Carolina communities remain unconvinced. In Vance County, commissioners recently rezoned land to allow for a potential data center near several rural neighborhoods, a school, and a church, despite public opposition and limited information about the project. Similar proposals in other counties have been withdrawn due to local resistance.

Shifting Development and Community Impact

As resistance grows in more populated areas, data center developers are increasingly targeting rural counties with fewer restrictions and simpler permitting processes. These areas may be more receptive to promises of tax revenue and jobs, but residents worry about the long-term impact on water, energy, and land use.

Community advocates and analysts argue that greater transparency is needed to build public trust. They call for the publication of data on energy and water use, tax incentives, and actual job creation. Without this information, many residents feel excluded from decisions that could reshape their communities for decades to come.

In North Carolina, the debate over data centers highlights the tension between economic development and community oversight. As more local governments enact moratoria and demand answers, the future of data center expansion in the state remains uncertain.

Data center projects typically require local government approval for rezoning and permitting. Public hearings may be held, but details are often limited due to confidentiality agreements. Residents can participate in local government meetings to voice concerns or support, but final decisions are usually made by county commissioners or city councils. The recent repeal of the electricity sales tax exemption reflects growing legislative attention to the industry's impact on public finances and infrastructure.