AI Infrastructure, Data Center Regulations, and Moratoriums
Seattle Floats a Moratorium
In March, Washington State's legislative effort to comprehensively regulate data centers failed to pass during session. As we previously reported, House Bill 2515 would have required data centers to absorb their own grid costs, implement curtailment protocols, and publish sustainability reports. Governor Ferguson's Data Center Workgroup is expected to draft renewed legislation, but that will not happen until 2027. With the pace of data center expansion, there is pressure for local governments to act before then.
Around the time House Bill 2515 died, reports emerged that four major companies were seeking to build five large-scale data centers within Seattle city limits with a combined maximum draw of 369 megawatts (about one-third of the city's daily energy usage). This triggered a public backlash over fears of skyrocketing electricity rates and strain on the region's drought-vulnerable hydropower supply. (Two of those companies subsequently withdrew their plans.) This led local activist groups to send more than 54,000 letters to City Hall. In response, Mayor Katie B. Wilson released a statement confirming that the City of Seattle has not authorized or permitted any new data centers, and that her office is actively "exploring a moratorium on siting new [data] centers." City Councilmember Debora Juarez, Councilmember Eddie Lin, and Council President Joy Hollingsworth are planning to propose a one-year moratorium in order to study the potential effects and develop policies to "reduce or mitigate any deleterious effects and enhance beneficial impacts of data center development and operation in Seattle."
A National Wave With International Implications
This is a trend that is playing out all over the country. This past March, Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez introduced the AI Data Center Moratorium Act, which would impose an immediate federal pause on new AI data center construction everywhere in the U.S. until Congress enacts legislation protecting workers, consumers, and the environment. While the bill is widely viewed as unlikely to advance in either chamber, it signals the depth of concern about the sector's growth and challenges faced by broader legislation. According to Good Jobs First, at least 12 states have moratorium bills pending this session, and more than 54 local moratoriums have already been adopted at the county or municipal level, often as short "time-out" freezes while zoning rules are updated.
On the other side of environmental and infrastructure concerns are real geopolitical stakes. Epoch AI's data shows that the United States has the largest share of data centers globally, currently hosting approximately 74.5% of global GPU cluster performance, with China a distant second at 14.1%. Critics of broad moratoriums argue that restricting data center construction amounts to a strategic concession to China. Meanwhile, proponents counter that unchecked expansion is not a neutral act either, and that communities have a legitimate interest in controlling their own energy, financial, and environmental futures before the boom in hyperscale AI data center construction becomes overwhelming.
Some Places Are Building, Not Banning
Not every jurisdiction is reaching for the blunt instrument of a moratorium, and absent federal legislation, we expect a diversity of approaches to governing the siting of data centers. This takes the form of governors and legislators carving out economically critical projects, imposing cost-sharing requirements, and using administrative tools rather than outright bans.
We recently provided an update that Anchorage adopted Ordinance AO 2026-27—a conditional use permitting framework that limits data center siting to commercial and industrial zones, requires demonstration of utility capacity, and imposes noise and visual screening standards. Alaska's strategic positioning between North America and Asia, cooler ambient temperatures, and emerging renewable energy profile have made it an increasingly attractive destination for hyperscale development. Anchorage's framework positions Anchorage to capture that opportunity responsibly. New Jersey's pending A796/S731, which recently passed the Assembly, is another example of targeted cost-shifting that would require data centers using over 100 megawatts to bear at least 85% of their service costs for a period of 10 years. These types of laws would enable data center construction with governance and oversight.
Maine Governor Janet Mills vetoed LD 307 on April 24, 2026, which would have been the first statewide data center moratorium in U.S. history. The veto was not due to actual opposition to the moratorium, but the lack of a carveout for a $550 million project in the town of Jay, a former mill community that she said "needs those jobs." Instead, Mills simultaneously signed legislation removing data centers from Maine's business development tax incentives and announced plans for an executive order creating a study council. Other states, such as Georgia, included a grandfathering exception for projects with prior approvals in proposed House Bill 1012.
Takeaways for Business
- Site selection strategy should include regulatory climate. For projects not yet committed to a location, evolving state and local legislative frameworks and the national patchwork of moratoriums all factor into determining long-term operating certainty. As reception and public opinion of data centers is rapidly evolving, contingency locations are a must.
- Clear documentation helps establish eligibility for pipeline carveouts. Carveouts in moratorium legislation are often written for projects already in process. Ensure your project timeline, utility coordination, and approval correspondence are well documented.
- Utility coordination should happen early. Both proposed and passed frameworks require proof of grid capacity. Early engagement with the regional utility—if not the very first step—is increasingly critical.
- The cost-allocation question is not going away. Across the country, ratepayer protection is the dominant political issue for data center regulation. Understanding the applicable electric rate structure and cost-sharing structure is a business planning imperative.
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Wendy Kearns is a partner, Zach Allen is a partner, and Elyse Sparks is an associate in the Seattle office of DWT. For more insights, reach out to Wendy, Zach, Elyse, or another member of our data centers & digital infrastructure team, or sign up for our alerts.