More than 30 North Carolina local governments have temporarily halted new data center development since February, creating a growing patchwork of restrictions as some residents organize against proposed facilities.
The pauses have spread from small mountain towns to major urban centers, as town councils and county boards face growing crowds of residents concerned about the arrival of large-scale computing facilities in their communities.
Facebook groups, protests, and petitions have emerged across the state, with opponents most frequently citing data centers’ electricity demand, water use, noise, and impact on nearby neighborhoods.
The moratoriums, lasting several months to one year, temporarily prevent local governments from accepting or approving new rezoning requests, special-use permits, site plans, or other data-center development applications.
“We are being told that AI data centers are inevitable — that communities must sacrifice their water, land, and health, and their economic future for Big Tech’s greed,” Rania Masri, co-director of the North Carolina Environmental Justice Network, said in support of the moratoriums in June. “But the spread of local moratoriums nationwide proves otherwise. We join others across this country in saying no to extractive industries, no to polluting our lands and treating communities as disposable, and no to ever-expanding corporate subsidies.”
But as moratoriums multiply, so do questions about whether temporary local pauses can meaningfully alter the pace or location of data center development, or whether they simply shift projects to neighboring jurisdictions while creating new uncertainty for communities competing for private investment.
In an April News & Observer opinion piece, Republican state Reps. David Willis, R-Union; and Jeff McNeely, R-Iredell, said residents asking questions about energy, water, noise, and who benefits from the projects deserve answers.
“We understand the impulse. Nobody wants a massive industrial project dropped into their backyard without a real conversation about what it means for their community,” they said.
Willis and McNeely, however, argued that blocking data centers through moratoriums is the wrong answer, as it would leave North Carolina on the sidelines.
“If we don’t build this infrastructure here, it gets built somewhere else,” they said. “Maybe Virginia. Maybe overseas. The AI revolution is not waiting on us to sort out our zoning disputes. Do we want the data from our phones, our doorbells, our kids’ school accounts stored in China? We don’t. And we don’t want the jobs and tax revenue going to Virginia or Georgia because we couldn’t figure out how to say yes responsibly. North Carolina has the workforce, the infrastructure, and the location to lead on this.”
Business leaders also argue that moratoriums can carry consequences beyond the projects they immediately delay, sending a broader signal to investors about whether North Carolina communities are open to long-term development.
Gary Salamido, president and CEO of the North Carolina Chamber, told Carolina Journal that uncertainty can harm communities, even if a moratorium does not immediately block a proposed project.
“Capital flows where it is wanted and stays where it’s welcome, so moratoriums certainly send a message,” said Salamido. “Data centers are the foundation of the modern economy and will be built somewhere. Companies making long-term investments look for communities that provide a clear, predictable path for investment.”
Salamido said companies making long-term investments look for communities offering clear and predictable development processes.
“North Carolina has built a strong reputation as a competitive place to do business, and maintaining that reputation requires continuing to provide the certainty and predictability businesses need to make long-term investment decisions,” Salamido said. “Predictability is one of North Carolina’s competitive strengths. While local governments appropriately make land-use decisions that reflect community needs, any time there is a patchwork of regulations, federally, statewide, and locally, it makes it more challenging for businesses to invest and operate.”
While a moratorium can pause new applications, it cannot create the conditions necessary for a site to be viable, including access to large amounts of reliable electricity, transmission infrastructure, water, and suitable land. Many local governments passing moratoriums would not have been viable locations.
“I’m doubtful local moratoriums will have much practical effect because the market has already narrowed the universe of places where a data center can realistically locate,” said Jon Sanders, director of the John Locke Foundation’s Center for Food, Power, and Life. “These facilities require significant amounts of reliable, around-the-clock electricity along with sufficient transmission infrastructure, water, and suitable land.”
In communities without those conditions, a moratorium may have little immediate effect because a viable project is unlikely to occur there. In communities that do have the necessary infrastructure, the effect may be more significant, but still limited.
“If a community does have the necessary infrastructure, a moratorium may delay a project or push it into a neighboring jurisdiction, but it would not address the underlying demand or infrastructure questions,” Sanders said. “The greater effect may be to create another layer of uncertainty in an already difficult siting process.”
Their legal reach is also limited. Moratoriums only apply to new or unapproved projects. Facilities that have already secured zoning, submitted complete applications, obtained vested rights, or begun construction may continue.
The debate over data center management has also drawn attention from state lawmakers, who considered several approaches during the 2026 legislative short session.
The House passed Senate Bill 730, the Ratepayer Protection Act, and returned it to the Senate. The measure would require sound assessments for proposed data centers with an electricity demand of at least 100 megawatts and direct state regulators to establish water-use standards.
It would also require utility contracts to include minimum payments and other protections intended to keep the cost of serving data centers from being shifted to residential and small-business customers. The bill has remained stalled in the Senate Rules Committee since June 8.
House Bill 1189 proposed a two-year statewide moratorium on permits for data centers designed to use at least 100 megawatts while researchers studied their effects on the grid, water supplies, utility rates, noise, and nearby property values. It did not advance beyond the House Rules Committee.
Lawmakers ultimately took a narrower step through the state budget, repealing the sales-and-use tax exemption for electricity consumed by data centers while leaving other industry tax exemptions in place. The change is expected to generate $21.4 million for the General Fund during the 2026-27 fiscal year.
Sanders said that these approaches, more than temporary local bans, get at the larger policy challenge facing the state.
“The more important policy question is how to ensure data centers get the power they need without impacting the affordability and reliability of the grid for households and small businesses,” Sanders said. “Rather than relying on a patchwork of temporary local bans, policymakers should allow large energy users to build, bring, or buy their own power so that they bear the risks, not poor families and other ratepayers.”
For now, the Senate has not acted on the House’s proposed statewide framework, allowing cities and counties to continue shaping North Carolina’s data center policy through separate moratoriums and local zoning rules.
