Anchorage Adopts Framework for Data Centers and Energy-Intensive Uses

On March 27, 2026, the Anchorage Assembly adopted Ordinance AO 2026-27, establishing a new land use and permitting framework for data centers and similar energy-intensive facilities. Anchorage currently only has one sizable colocation datacenter and does not have any major hyperscaler datacenters. The new ordinance amends Title 21 of the Anchorage Municipal Code by creating a new land use category for "data centers" and subjecting those facilities to conditional use review and use-specific performance standards. It also directs further regulatory development for energy-intensive uses, signaling that Anchorage's framework may continue to evolve.

The new ordinance demonstrates the Anchorage Assembly's efforts to proactively legislate and is reflective of a broader trend among jurisdictions to take action in light of increasing energy demand driven by artificial intelligence, coupled with concerns regarding energy, water, and community impacts. While Alaska has no statewide legislation specifically addressing data centers, and Washington recently delayed consideration of statewide data center legislation to 2027, MultiState reported that as of February more than 300 state data center bills had already been filed in 2026 across more than 30 states.

What the New Ordinance Does

Creates a new data center use category: The ordinance defines "data center" as a facility housing multiple computer servers that requires at least 20 MW of electrical demand at peak operation (even if geographically dispersed). Two thousand servers is the cut off between "small" and "large" datacenters. This replaces prior reliance on legacy "data processing" categories that did not fully capture modern, significantly larger high-load facilities.

Limits where data centers may be located: Data centers are limited to commercial and industrial zoning districts and are not permitted in residential zones.

Requires conditional use approval: Data centers are not permitted to be constructed and located as of right. Instead, projects must obtain a conditional use permit, triggering a discretionary review process that includes public notice and the opportunity for community input.

Imposes design and siting standards: The ordinance establishes development standards and mitigations intended to address visual, noise, and compatibility concerns. These include requirements for building entrances, screening and enclosure of equipment, landscaping buffers, and setbacks of approximately 200 feet from residential or other noise-sensitive uses, subject to limited flexibility.

Requires utility capacity confirmation: Applicants must demonstrate that sufficient electrical, water, and wastewater capacity exists to support the proposed facility. Data centers can generate a great deal of heat that requires cooling to protect the electronics operating in the facility, typically water-based cooling systems that either recycle water and dispose of waste heat or discharge heated water into the larger water system. Where sufficient capacity is lacking, the ordinance contemplates that upgrades may be required as a condition of approval, including developer-funded infrastructure improvements. Documentation must also be provided of any anticipated onsite power generation and mitigations on the surrounding community.

Directs further rulemaking: The ordinance requests that the Planning Department recommend revised or additional land use regulations and develop additional use-specific criteria for energy-intensive uses, indicating that further regulatory refinements are likely.

Why It Matters

Anchorage adopted Ordinance AO 2026-27 before receiving any large-scale data center applications, learning from the concerns of other jurisdictions regarding the potential for data centers to impose significant demands on electrical grids, water systems, and wastewater infrastructure, as well as ongoing operational impacts such as noise and visual scale.

It also behooves Anchorage to be prepared for data center applications and to establish expectations in advance. Local officials have identified potential economic benefits, including tax revenue and infrastructure investment, and have framed the ordinance as an effort to balance those benefits against community impacts. The State of Alaska has an opportunity to help meet the increasing demand for data center capacity that other states are struggling to satisfy. Alaska also presents a distinctive set of opportunities for data center development that help explain Anchorage's decision to act early.

Strategic Considerations: Alaska's Emerging Role

From a geographic perspective, Alaska sits at a strategic location between North America and Asia, offering shorter connections and potential advantages for applications sensitive to latency and lag time concerns, and international connectivity. Subsea cable routes across the North Pacific, including recent and proposed investments, are expected to enhance Alaska's role as a digital transit corridor.

The state also offers natural attributes that are increasingly relevant to data center siting. Cooler ambient temperatures can support more efficient cooling strategies, potentially reducing operating costs, energy consumption, and wastewater impacts. In addition, Alaska's resource base of natural gas, hydroelectric potential, and emerging renewable energy projects, creates opportunities for long-term power supply arrangements, including lower-carbon options that are increasingly important to hyperscale operators.

At the same time, Alaska's relatively undeveloped data center market presents a first-mover opportunity. Developers may find fewer legacy constraints and the ability to shape infrastructure buildout, like colocation with new electric generation or transmission investments.

These advantages are balanced by the practical challenges of infrastructure constraints, higher construction costs, and the need for coordinated investment in transmission, generation, and telecommunications. Anchorage's ordinance directly addresses several of these considerations by requiring proof of infrastructure capacity and alignment with municipal systems.

Key Considerations for Developers and Investors in Anchorage

• Project siting will be more constrained, with data centers limited to specified zoning districts and subject to setback and buffering requirements.
• Project timelines will need to account for conditional use permitting, which involves public process and discretionary review.
• Early coordination with utilities will be critical, given the requirement to demonstrate capacity and the potential for infrastructure upgrades.
• Upfront diligence will be more intensive and may require technical studies addressing noise and operational impacts.
• The potential for additional rulemaking creates some regulatory uncertainty, particularly for other energy-intensive uses that may be addressed in future amendments.
• Despite these hurdles, Anchorage's (and Alaska's) strategic position and resource profile may present opportunities for developers willing to navigate these constraints and engage early in infrastructure planning.

Looking Ahead

Anchorage's ordinance aligns with a broader national shift toward more structured regulation of data centers, particularly in regions facing infrastructure constraints or rapid growth in demand for computing capacity.

As interest in Anchorage and Alaska generally as a potential data center location is expected to grow, further policy development at both the municipal and state level is likely. Stakeholders should monitor these developments and consider early engagement with municipal staff, utilities, and telecommunications providers to position projects effectively.

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Wendy Kearns is a partner and Elyse Sparks is an associate in the Seattle office of DWT, and Elizabeth Hodes is a partner in the Anchorage office of DWT. For more insights, reach out to Wendy, Elyse, Elizabeth or another member of our energy and technology or Anchorage teams or sign up for our alerts.