One important piece of context for advocates and policymakers in other states is that Minnesota has not been a focus for large-scale data center development until very recently. While the state has dozens of existing data centers, it has no operational hyperscale data centers yet. For states in a similar position, getting protections passed before your state becomes a hotspot is essential.

Regardless of where your state currently stands with data center development, passing legislation with a clear framework for how to deal with their impacts is crucial, even though it may not be an end-all-be-all solution. HF 16 is one step in Minnesota’s continued fight to protect communities. Starting with any level of meaningful guardrails — such as ensuring that the additional load needed to serve data centers meets your state’s pre-existing clean energy targets, as Minnesota did — is an important first step.

Due to the economic value that these large companies purport to bring to states through taxes and jobs — jobs that may not even be created at the scale they’re promised — legislators face the difficult task of weighing potential economic benefits with potential health risks for the communities they represent. Furthermore, these companies have the resources to aggressively lobby lawmakers, providing information that benefits their economic standing. It’s essential that public interest groups and passionate residents participate in the legislative process as fervently as companies to ensure their elected officials understand the effects of data centers.

The average American is not interested in data centers being built in their backyard. These facilities are less popular than nearly all energy projects, including natural gas plants, wind farms, and even nuclear plants. Educating and mobilizing constituents is key to building the power needed to counteract data center companies’ political influence.

In Minnesota, a state with strong environmental review laws, this balance of power was key to building the political will necessary to get data center guardrails passed, rather than just incentives. The legislative calculus meant that data centers couldn’t get away with unfettered buildout at the expense of communities.

Minnesota advocates were able to influence their legislators in favor of public interest by mobilizing residents on the frontline of data center buildout. With issues as new to state legislatures as data centers, it’s essential to use storytelling to prove the on-the-ground reality of adverse impacts and statewide inequities.

The Minnesota PUC had also convened a day-long session on data center issues in late 2024, ahead of the start of the legislative session. Building on that political momentum from the PUC or individual utilities, or lobbying the PUC to initiate something similar, would be a promising first step toward swaying legislators in other states.

Another important political dynamic in the state was the proposed extension of tax breaks for data centers, which was introduced at the same time as major cuts to other public programs were proposed. Connecting those dots, and hearing about it from constituents, was influential for some legislators.

This sentiment was echoed by public sector unions as well, an important voice in this advocacy and power-building work.

States should also look to build on the political momentum in other parts of the country. Understanding what data centers have agreed to in other states, such as Minnesota’s reserved funding from data center fees to deploy low-income weatherization and conservation projects, can help set baseline expectations for what you can achieve in your own state.

Lesson 4: Aim for guardrails and protections that meet concrete standards, and ensure reporting requirements are in place.

Minnesota’s HF 16 is a great first step, but it’s not the end of the process. Some of the bill’s provisions include explicitly enforceable language, such as the elimination of the electricity sales tax exemption and the creation of the conservation and weatherization fee, which secures definite protections for communities. 

Other parts of the bill, however, are less enforceable or are up to the discretion of regulators. The requirements for the consideration of water efficiency technology use and the approval of permits with no adverse health or environmental impacts are not quite so concrete. If every data center considers water efficiency technologies, but doesn’t actually implement them, the law would be satisfied, while communities would suffer. Similarly, the finding of no adverse health or environmental impacts — without the creation of discrete standards against which to measure this impact— might be an opinion that differs between state regulators and communities themselves. 

States should seek to build on these provisions to ensure their regulations have tangible legal weight when it comes to protecting their communities, such as discrete standards for water and energy use.

In addition to strengthening provisions that have made it into bills from previous sessions, states should, of course, seek to bring additional requirements that weren’t present in HF 16, including those related to clean energy buildout, grid reliability, water and energy use reporting, and more.

Ironically, getting the data on data centers’ impacts is particularly difficult. Data center companies across the country are refusing to publicly report their water and energy use, often citing concerns about sharing proprietary information with competitors. While it didn’t make it into the Minnesota bill, advocates and policymakers should seek innovative ways to secure this important piece of the puzzle. 

Without disclosure, both public participation in facility approvals and governmental efficacy in regulating impacts are stymied. In fact, across the country, data center developers are using non-disclosure agreements (NDAs), to bar local officials and landowners from sharing information about proposed developments.

States are only at the beginning of a long process to achieve meaningful data center regulations, and legislatures must move quickly to protect their communities. There are major uncertainties about the scale of future deployment, driven by data center companies submitting speculative or duplicative interconnection requests, alongside unpredictability around how much water and energy future machine learning and related generative models will need — yet still, data center demand is already causing significant load increase. These concerns, at a time when energy costs are already spiking across the country, means that policymakers need to act fast. 

Fortunately, states aren’t alone in this work. Advocates and policymakers across the country should look to lessons learned from other states, diving into both the wins and the challenges. Some conclusions that Climate XChange has reached from the insights shared in this article include:

• States should seek to enshrine explicit requirements that integrate data center resource use into existing climate and clean energy policy frameworks, such as emissions reduction targets and clean energy standards when they are in place.
• Legislatures can build on regulatory momentum from the PUC or utilities related to data centers to inform their efforts. 
• Advocates should mobilize residents and public unions impacted by data center development to tell the real stories of impacts to communities and workers. 
• Policymakers should champion discrete standards and enforceable requirements, especially related to water and energy use, as well as transparency and disclosure.

State policymakers have a responsibility to protect our communities and future generations from adverse impacts related to this industry-driven buildout, but it won’t happen overnight. As with many policy issues, states can lead the way on this issue, and advocates and policymakers will need to work together to build on best practices across the country.