By Mary Barrow, CFA Legal Intern
The first two installments of this blog series revealed how government policies facilitate rapid data center expansion and how the lack of transparency disproportionately impacts vulnerable communities. This third and final installment examines the tangible and deeply personal harms these communities endure: soaring utility prices, water scarcity, disruptive noise pollution, environmental degradation, and significant health threats.
Utility Costs Skyrocket: Who Really Pays for Data Centers?
Across states such as Virginia, Ohio, Pennsylvania, and New Jersey, the rapid buildout of hyperscale data centers is raising electricity costs for households. In the PJM Interconnection region, capacity auction prices have jumped as new demand outpaces supply, and analysts attribute most of that new demand to data centers. Those costs roll into retail bills over the next year and beyond.
Residents are seeing the effects of these new developments on their monthly utility statements. In Columbus, Ohio, typical electricity bills climbed about $27 this summer and in Trenton, New Jersey, the average home paid roughly $26 more per month after June 2025 increases. These increases come as utilities invest in transmission and distribution upgrades needed to serve the large loads of data centers.
In the Southeast, regulators are keeping coal units online longer to meet new energy demand peaks, a decision that carries health and climate costs for nearby communities. Georgia’s latest resource plan extended the life of coal plants and cited data center growth as a key reason.
Ohio, on the other hand, has taken steps to rebalance who pays for growth. In July 2025, state regulators approved a plan that requires new data centers to pay for at least 85 percent of the energy they subscribe to each month, even if they consume less. This requirement protects residents from funding data center growth with their pocketbooks.
Because transmission projects take years, Ohio officials also approved onsite generation at two data centers, and the utility temporarily paused some new large connections. This stopgap underscores how fast demand has arrived relative to grid upgrades.
Water Scarcity Intensified
Communities in drought-afflicted areas like Arizona and Texas face acute risks from the intense water demands of data centers. In Arizona’s Phoenix-Maricopa County region, where 48 data center campuses operate, annual groundwater depletion has reached nearly 28 million acre-feet, equivalent to the total capacity of Lake Mead, as the area experiences prolonged megadrought conditions. A single hyperscale data center in this region can consume up to five million gallons of freshwater daily, enough to support tens of thousands of households. The collective water demand for cooling data centers in Maricopa County surpasses 170 million gallons per day, roughly matching the water consumption of approximately 1.5 million residents annually. Similarly, central Texas data centers consumed approximately 463 million gallons of water in just one year, exacerbating drought conditions that already led counties like Hays to impose severe pumping restrictions.
Nearly 40% of U.S. data centers, are located in regions identified as areas of high- or extremely high-water scarcity. Companies such as Amazon and Microsoft operate dozens of centers in these drought-stricken zones, intensifying competition for limited water resources. In these water-stressed communities, every gallon diverted to data center cooling is water unavailable for residential, agricultural, or tribal use. The reliance of data centers on potable water further exacerbates inequalities, especially in rural and low-income communities already struggling with depleted wells or aging infrastructure.
Corporate initiatives aimed at becoming “water-positive” often fall short of meaningful change, relying on indirect methods like purchasing water credits or offsetting through fallowed agricultural lands, rather than directly replenishing local water supplies or addressing immediate community needs. As climate change intensifies drought conditions and reduces groundwater availability, experts warn that continued unchecked data center expansion could push local water resources past their resilience thresholds, highlighting the urgent need for stringent oversight and responsible resource management.
Noise Pollution: Living Near Constant Noise
Continuous noise from data center cooling systems and backup diesel generators creates a persistent, intrusive sonic landscape that significantly undermines residents’ quality of life. In Northern Virginia, home to the world’s densest cluster of hyperscale data centers, neighbors compare the relentless hum to living beside a perpetually idling airplane. This constant noise leads to chronic sleep disruption, heightened stress, and elevated community anxiety.
Although data centers often operate within local noise regulations, they regularly exceed safe limits during hot weather or generator testing periods, with diesel generators reaching sound levels as high as 100 dB(A) – loud enough to cause hearing damage with prolonged exposure. The cumulative impact of numerous generators compounds these effects, magnifying disturbance in surrounding neighborhoods. Exposure to continuous noise pollution is linked to serious health issues, including hypertension, cardiovascular disease, tinnitus, headaches, and cognitive impairment.
Local communities typically lack the resources or regulatory frameworks to effectively manage this ongoing industrial noise. Existing local noise ordinances often address intermittent disturbances rather than continuous industrial noise, providing minimal enforcement against persistent violators like data centers. Consequently, affected residents are frequently left without adequate protection or recourse.
The strain of persistent noise has led some residents in areas like Loudoun County to seek medical relief or even relocation. Noise mitigation measures such as sound barriers or advanced acoustic technology remain largely voluntary and inconsistently applied by data center operators, leaving residents exposed to chronic noise-related health risks. This issue extends beyond nuisance and represents a substantial environmental justice concern which disproportionately affects communities with limited capacity to challenge powerful corporate interests.
Additionally, diesel generators, essential for data centers during power outages, emit pollutants like nitrogen oxides and fine particulates associated with serious health issues. A recent study estimates that by 2030, annual public health costs from data center emissions could reach $20 billion, disproportionately affecting low-income communities.
Environmental Destruction and Cultural Disruption
Massive data center facilities consume large swaths of land and frequently repurpose farmland, wetlands, and ecologically sensitive areas. In Ohio, Facebook’s data center alone spans 740 acres, displacing agricultural land and raising stormwater runoff concerns. A Virginia legislative analysis confirms that converting rural land into data center campuses creates adverse environmental impacts, including altered water flows, loss of biodiversity, and land fragmentation. Due to their sheer footprint, data centers pose disproportionate negative environmental effects compared to other types of development.
Marginalized Communities Bear the Brunt
People of color and low-income communities disproportionately experience these burdens. Data centers are disproportionately sited in communities which are historically marginalized and already overburdened by pollution. In California, nearly one-third of data centers are located in the top 10% most polluted census tracts. The total public health burden of AI-data centers is projected to reach $20 billion per year, with economically disadvantaged households experiencing a burden 200x higher than their less-impacted counterparts.
Diesel generators at data centers are estimated to cause nearly 20,000 asthma symptom cases annually and $385 million in health burdens, disproportionately affecting marginalized neighborhoods. These inequities mirror broader patterns of environmental racism, with Black communities facing approximately 54% more particulate pollution than the average American, and Latino and Asian populations facing similarly elevated exposure rates.
Restoring Equity
These severe harms are exacerbated by insufficient transparency by the data center industry and state and local governments. Communities often learn about projects only after permits are approved, limiting opportunities for meaningful intervention. Transparency alone is not sufficient, but it is an essential first step towards accountability and justice. Policymakers, community leaders, and everyday citizens can actively participate in reform efforts by advocating for mandatory early project disclosure, supporting comprehensive Environmental Justice Impact Assessments, demanding equitable utility rate structures, insisting on public data availability, strengthening local oversight, joining grassroots advocacy groups, and raising community awareness. By collectively demanding transparency and accountability, communities can reclaim their power and ensure that digital infrastructure development genuinely benefits everyone, not just the privileged few.