Riff Raff: Calling for a data center pause

States and communities around the country have paused or are moving to pause data center developments. Such moves come from growing concerns about electricity demands, water use, water pollution, noise, and heat emissions.

But not in Arkansas. The Natural State has the welcome mat out for the data centers feeding the artificial intelligence (AI) industry.

The demand for data centers has skyrocketed in recent years as the industry races to feed the ever-expanding artificial intelligence machine. Cloud computing and real-time data analysis are also factors in the data center drive.

Arkansas’ rural spaces and relatively low cost of doing business have attracted data center developments. Almost $12 billion will be spent to build four “hyperscale data centers” in central and eastern Arkansas. A data center project is now under construction in Johnson County near Clarksville.  The total could rise to $21 billion when the centers are fully built out.

The state also is attractive because an incentive plan – which includes sales tax exemptions and reducing the time it takes to approve such projects – targeting data centers was approved in 2023.

But the more we learn about data centers, the more questions we should ask, and the more answers we should obtain before permitting more data centers. It doesn’t require deep investigative work to know there is a rising concern about data centers.

And this is not a red state-blue state issue.

A Republican legislator in Oklahoma is pushing for a moratorium on new data centers until late 2029 to learn more about data center impacts. Another Oklahoma legislator is pushing legislation to prevent the cost of data-center related utility expansions from being passed on to ratepayers.

Legislators in Ohio are considering creation of a committee to study data centers, with a focus on environmental impact, electric and water use, and light and noise pollution. The Illinois Farm Bureau is asking state and local governments to create zoning authorities so that a “thorough and transparent” review is conducted before permitting data centers.

The state of New York is considering a three-year ban on data center developments until more is known about power and environmental concerns. Legislators in Georgia are considering legislation to pause data center approvals until March 2027. Maryland legislators are considering a plan to block data center developments until a plan to protect consumers from higher utility rates is in place. Legislators in Vermont and Virginia are considering data center moratoriums.

Entergy Arkansas has said data centers will ultimately reduce electricity rates for consumers. But numerous reports suggest otherwise. John Quigley, senior fellow at the Kleinman Center for Energy Policy at the University of Pennsylvania, recently said the growth in data centers is a driver of higher utility prices.

A Goldman Sachs report indicates that 40% of electricity demand growth to 2030 will be from data centers. Electricity required by large data centers is the same as that required to power 750,000 homes, according to a recent report from consultancy firm BSI and real estate services firm CBRE. According to a September 2025 Bloomberg News analysis, wholesale electricity costs grew 267% more for a single month than it did five years ago in areas with significant data center activity.

According to the Environmental and Energy Study Institute, a medium-sized data center can annually consume up to 110 million gallons of water to keep the center cool. That’s equal to the average water use of 1,000 homes. Larger data centers can use up to 1.8 billion gallons annually, the amount used by a town of up to 50,000 people.

There is a lot we don’t know about data centers. We may, through objective due diligence, learn that data center benefits outweigh the negatives, but let’s be wise and not rush in where angels fear to open an electric bill.

A rising number of state and local governments are pausing data center developments until more is known. Let’s hope Arkansas officials at state and local governments do the same and focus more on what’s right for the Natural State’s environment and the pocketbooks of its citizens than on creating an unfettered environment for data centers and their owners.