More transparency, community engagement and ratepayer protections could help allay growing concerns over data center development, as support for the much-needed facilities plummets, experts said on a State Affairs Insider panel on Tuesday.

Data centers — specialized buildings that house servers and other networking equipment needed to support everything from artificial intelligence to video streaming and financial transactions — have become a lightning rod in today’s political landscape.

They can require large amounts of continuous power and hundreds of thousands of gallons of water a day to cool their computing systems, depending on the size of the facility.

For the moment, data center opponents are winning, as more cities and states enact moratoriums on further construction and regulations surrounding water and energy use and transparency.

But more disclosure of power and water use, engaging surrounding communities earlier in the process and taking steps to protect ratepayers could help ease the tension surrounding the facilities, the experts said.

According to a recent Marquette University Law School poll, 76% of respondents said the costs of data centers outweigh the benefits.

That represents a massive swing from last October when only 55% said the costs outweigh the benefits, with 45% believing the benefits were worth the costs.

“It’s truly striking,” Charles Franklin, director of the Marquette Law School poll, said of the shift in opinion.

Opponents typically argue that the massive facilities are being built in neighborhoods, put upward pressure on electricity rates, threaten grid reliability and the environment, are loud and unsightly, and receive tax benefits that subsidize the richest companies that have ever existed, including Amazon, Meta and Microsoft.

Supporters argue that they are increasingly needed to support economic growth and innovation as more and more sectors of the economy depend on digital services, cloud computing, and artificial intelligence.

Franklin said that the opposition appears to be bipartisan, with nearly 70% of Republicans believing costs outweigh the benefits.

The Marquette law school professor attributed that across-the-board opposition to the business community, a natural ally, and political candidates staying mostly silent on the issue of data centers.

“I think one part of this is that a lot of the communications about data centers has been dominated by opponents, and supporters have not been particularly visible, at least here in Wisconsin,” Franklin said. “One clear finding from public opinion research is that when the communication is all on one side of an issue, it tends to move all people in the direction of that one-sided communication.”

Franklin also said he believes that data center opposition stems from a general unease many have with artificial intelligence.

“When we’ve asked whether artificial intelligence will be good for society or bad for society, substantial majorities say bad for society, including a majority of those who use AI at least every month,” Franklin said.

Virginia Del. Irene Shin, a Democrat, said disclosure of energy and water use could go a long way to helping allay concerns. She said that ratepayers need to be protected by creating a new class of large-load users, and developers should pay for the transmission and related infrastructure needed.

Shin championed a bill in 2025 that created a new class of large-load users that would pay higher rates than other ratepayers. Similar legislation was enacted this year in Delaware and New Jersey, and bills were introduced in California, Indiana, New York, Oklahoma and Wisconsin.

Shin said the data center fervor has definitely increased since she was elected five years ago and that has been driven by concerns over the environment and a feeling that local governments have ignored their citizens, spurred, in part, because localities have little recourse to affect development once the land is sold.

“There’s a lot of concern about not feeling like their voices are being incorporated or heard,” Shin said.

She said that some data center developers are better than others and the bad actors “are tainting the whole barrel.”

Shin also called into question the need for tax subsidies for data centers. Virginia is one of 38 states that offer tax incentives for data centers, ranging from sales and use tax exemptions to property tax abatements. Lawmakers have increasingly explored clawing back tax benefits for data centers, with at least 11 states introducing bills this year.

Bill Kleyman, founder of Apolo.us, and a data center development veteran, emphasized the need for early, transparent communication and responsible development.

“The industry’s biggest communication mistake is showing up way too late,” Kleyman said.

Kleyman, who underscored the difficulty for developers of having to work with different regulations between states and towns across the nation, agreed that there are some developers who he equated to “house flippers” that do not care about the communities they build in.

But he said state-level regulations would help the industry and communities work together.

“We’re never going to dismiss the community,” Kleyman said. “That’s certainly, from my perspective and the folks that I get a chance to work with, a non-starter… We, in the data center industry, want to work with communities. “We want to have some more levels of regulation. We want to be able to set good guidelines.”