The High Costs of the Cloud

In places like Homer City all across the country, companies are racing to build data centers—vast warehouses of servers that power everything from online shopping and video streaming to cloud computing and the massive, data-trained models behind AI. These facilities consume enormous amounts of electricity and water, and developers are increasingly eyeing rural areas for construction, where land is cheaper and more readily available.

In regions with legacies of industrial decline—like Appalachia, the Rust Belt, and parts of the Southeast—states and localities are often eager to attract projects they hope will bring new investment. Taken in by Big Tech’s narrative of economic development, many officials are offering generous public subsidies to secure data center deals.

As a result, states are increasingly competing with one another to attract what many local leaders see as the next wave of economic revitalization.

With the shuttering of the coal-fired plant, even though it had only been running at 20% capacity, Homer City hummed with anxiety. The plant’s closing “kills us,” Homer City borough manager Rob Nymick told WTAE Pittsburgh when news of the closure broke in 2023. The generating station’s 129 workers—in a town of 1,700 people—would be left without jobs.

“I don’t know how many more hits we can take,” Nymick said, a gesture at the decline of the coal industry writ large in the town, which affected both power plant and mining jobs.

And yet, not everyone in and around Homer City is celebrating new construction of a power plant and data center. A grassroots group, Concerned Residents of Western PA, is organizing to oppose the construction, citing higher utility costs, threats to public health, and limited job gains.

They are one of more than 100 people-powered groups across the country resisting data center projects, which are seen as opaque and potentially harmful to the environment and surrounding communities. Their movements are taking on a powerful industry that’s moving quickly, with limited transparency, to harness the profits of the AI boom.

The Footprint of the Digital Economy

Data centers aren’t new, but they’ve been spreading—and attracting more attention—in recent years thanks to AI and the tremendous computing power it requires. “The cloud” may be a metaphor for the external storage of our data, but it depends on very real physical infrastructure.

In addition to thousands of servers, data centers house extensive storage and networking equipment. Keeping all this machinery from overheating requires heavy-duty cooling systems that consume immense amounts of electricity, and in many cases significant volumes of water—as much as 5 million gallons per day, the same as a small city.

As demand for AI grows, so does the demand for data centers. There are currently more than 4,000 data centers operating across the United States, with over 3,000 more planned or under construction. Nearly a third of the energy capacity planned for those new projects would come from facilities that intend to generate their own power on-site, typically using fossil fuels.

While early data centers were more likely to be found near established technology hubs, today they’re being built all across the country, particularly in rural areas, and they’re being pitched as economic drivers.

It’s true that investment in AI infrastructure represented 92% of GDP growth in the first half of 2025—but it was just 4% of total GDP, suggesting that the capital-intensive and non-labor-intensive industry delivers far narrower benefits than its scale might imply.

Still, the technology lobby is quick to cast it as a boon to local economic growth.
Data centers “aren’t abstract tech projects—they’re job engines that employ electricians, construction crews, and engineers; expand local tax bases; and lower costs for families and small businesses through faster, more reliable digital services,” reads a 2025 report from the American Edge Project, a technology industry interest group that the company Meta, then known as Facebook, launched in 2019.

According to the report, “AI infrastructure is revitalizing communities nationwide.”

Some of these communities, however, have a different story to tell.

Tucker County, West Virginia:
Same Story, Different Industry

The notice would have been easy to miss, just a few lines in the local paper announcing that a company had applied for an air quality permit. But it was the first time residents of Tucker County, West Virginia—including local officials—got wind of a potential development in their area, though the company’s heavily redacted permit application didn’t even mention a data center.

On the same day the company applied for its permit, West Virginia state legislators introduced a bill, which would soon pass, preempting local jurisdictions from having any control over “high impact” data centers—including even knowing important details of their development. According to the law, any information “identified by the data center as confidential business information” is exempt from public records laws. The legislation also diverts most property tax revenue generated by the developments away from localities.

After the law’s passage, Republican Governor Patrick Morrisey claimed it would make West Virginia “the most attractive state in the country for data centers.”
But many residents wonder how attractive the state, still recovering from many decades of exploitative resource extraction by way of the coal industry, will remain for the people who live there.

It doesn’t help that data center companies, with help from state leaders, are keeping their plans under wraps.

Tucker County, in north-central West Virginia, lies within the Allegheny Highlands, a scenic region home to Blackwater Falls, Canaan Valley, and stretches of the remote Monongahela National Forest. After an eagle-eyed reader spotted the public notice about the air permit in the local paper, the community clamored for more information about a development that could disrupt their home—and Tucker United was born.

The grassroots group is fighting against construction of a massive data center and power plant just outside picturesque Blackwater Canyon, near the small mountain towns of Davis and Thomas.

“We want to not only fight the proposed power plant and data center project but also support good economic development proposals that will help the people of West Virginia,” said Nikki Forrester, a Davis resident and director of communications for Tucker United.

The county’s economy relies heavily on outdoor recreation and tourism. In 2023, visitors to the county spent more than $85 million, revenue that helped support more than 900 jobs—nearly 22% of the county’s total employment.
Tourism has led to “so much positive growth” for the county, said Forrester, whose small business, a local outdoor adventure magazine, is one of many that benefit from tourism.

Like much of the surrounding region, Tucker County has seen decades of job loss thanks to the decline of coal—the last coal mine in the county closed in April—but tourism represents a bright spot. Residents are concerned that the data center could jeopardize that progress.

“People won’t want to come here if they’re going to be trying to enjoy the outdoors in the shadow of these giant smokestacks,” Forrester said.

As for data center jobs, the company behind the project hasn’t shared how many jobs it expects to create, nor whether they’ll even go to locals or state residents.
“In West Virginia, we’ve seen this story play out over and over again,” said Forrester. “We know what resource extraction looks like, we know the aftermath of what happens when deals are made behind closed doors, and it never works out for the benefit of the people who are here,” she said.

With few details of the project available, Tucker United commissioned its own study on the possible impact of the data center. Researchers from the lab of Harvard University public health professor Francesca Dominici concluded
that health risks from air pollution from the plant could cost community members a cumulative total of $35 million in health-related damages in an average year.
The development, Forrester said, “feels like a huge risk that certain people in the state are willing to take, without even consulting or considering the people who are here.”

Valdosta, Georgia:
Rising Energy Costs in the Shadow of Subsidies

In southern Georgia, residents—especially members of the Black community—are already facing an affordability crisis, said Russell Armstrong, senior manager of policy and campaigns at Black to the Future Action Fund, a national organization focused on building Black political power.

In Valdosta, a majority-Black city near the Florida border, the effects of 2024’s Hurricane Helene are still being felt. The hurricane destroyed many homes in the area, forcing some families to double up in houses that may not be completely sound.

Meanwhile, economic disparities follow racial disparities. The median Black household in Valdosta earns roughly $33,000, compared to about $67,000 for the median white household, according to the most recent census data.
“This all ties together,” said Armstrong. “If there’s a significant wage or income gap, then people can’t afford housing—if they can’t afford housing then they can’t get access to better jobs.”

Utility costs are already straining household budgets. Organizers say some Valdosta residents pay utility bills costing as much as 90% of their total rent—for instance, some face $900 in utilities in addition to rents of roughly $1,000—a problem that’s compounded by many families needing to share homes.

Some residents worry that the situation may get much worse if a potential AI data center comes to fruition. Because data centers require so much electricity, utilities can pass (and have passed) the cost of new generation and energy infrastructure on to ratepayers, pushing their bills higher. In data center hot spots across the United States, electricity costs have in some cases nearly quadrupled since 2020.

Meanwhile, residential electricity prices nationwide have increased 33% since 2019, faster than the rate of inflation. Utilities requested $29 billion in rate increases in the first half of 2025 alone.

Most Valdosta residents are serviced by Georgia Power, which, according to the nonprofit Energy Policy Institute, pocketed 23 cents in profit for every dollar spent by a ratepayer in 2025. In December, the Georgia Public Service Commission approved a project expanding the grid to allow the utility nearly 10,000 megawatts of new energy, largely to power new data centers. That amount of electricity could supply roughly 6.8 million Georgia homes. The commission’s own staff analysts said that the plan could raise residential customers’ electricity bills by at least $20 per month, but the commission pledged that ratepayers in the state would not see increased costs from data center development for the next few years.

During his State of the Union address in February, President Donald Trump declared that tech companies building data centers have said they won’t allow utility cost increases for residents, a promise on the part of corporations that has no enforcement mechanism, offering people little protection from rising costs if energy demand continues to rise.

In Valdosta’s Lowndes County, a data center project is merely being discussed; it hasn’t been greenlit beyond rezoning the land that would enable its development. Still, local residents have voiced concerns ranging from noise pollution to high utility bills, and the organizers at Black to the Future Action Fund see a clear connection to their energy affordability fight.

Data center proponents are quick to point out how the facilities could drive tax revenue to counties and towns—but that only happens if the companies are actually paying taxes. Many data center projects are tied to large tax subsidies—increasingly driven by ostensible competition between states and localities—that will prevent communities from seeing much, if any, tax revenue. Instead, a project “just becomes something of a cash cow to sell the city for high-end tech workers,” Armstrong said.

In 2026, Georgia is projected to lose $2.5 billion in tax revenue because of data center sales tax exemptions, according to the state’s tax expenditure report.

An audit of the tax exemptions by the University of Georgia’s Carl Vinson Institute of Government found that 70% of data center projects would have located in the state even without the sales tax subsidy.

Homer City, Pennsylvania:
Resisting a Renewed Reliance on Fossil Fuels

For the past year in Homer City, there have been “almost daily explosions,” as demolition continues at the old coal-fired plant to make way for the data center and its associated power plant, said Amanda, a representative of Concerned Residents of Western PA, who asked to be identified by only her first name due to privacy concerns.

In order to avoid working with utility companies—since it can take years for large-scale projects to connect to the grid—many data center developers are planning to use their own power-generation facilities, whether building new plants or rehabbing old ones.

Big Tech companies may have once hailed their zero emissions goals and plans for sustainable growth, but that was before the flashing dollar signs of the AI gold rush. Now, their emissions are surging, raising doubt about their renewable energy commitments.

“We’re not going to hit the climate goals anyway,” said former Google CEO Eric Schmidt, making an argument for AI investment at an AI Summit in 2024.

Some coal-fired plants are being retrofitted to power data centers, part of a push from the Trump administration to invest in coal. But in Western Pennsylvania, the plant in Homer City is to rely on natural gas—and unlike the old plant, it would run 24/7 and at full capacity, releasing up to four times as many greenhouse gas emissions.

Before she began organizing with Concerned Residents of Western PA, Amanda “wasn’t really a hardcore environmentalist,” she said. “But I do care about our land and natural resources. I care about my community, and people cannot exist without a planet to live on.”

Amanda pointed out that the Homer City area is already an “environmental justice area” subject to “disproportionate environmental effects on vulnerable populations,” as defined by the state. Much of the area surrounding the municipality scored in about the 84th percentile per the state’s environmental justice screening tool, which considers environmental exposure as well as sensitive populations. Any score above the 80th percentile merits designation as an environmental justice area.

Still, the data center project is a “hot button issue” for Homer City residents, Amanda said. Opinions are “very divided by folks who think it’s going to bring jobs and be good for businesses, and then there’s other people who have obvious concerns.”

Amanda, of course, is in the latter group. “Yes, for a few years, it will bring jobs and patrons at businesses that maybe wouldn’t be here [otherwise]—and then what?” she asked.

While thousands of people are involved in the construction of a data center, the long-term picture is murkier. Though data center developers promise thousands of jobs, they’re mostly relying on the mere possibility of indirect jobs: A typical data center itself employs between 27 and 111 people.

The Homer City project is moving quickly, with new developments happening each week, and Amanda isn’t sure where the project will be in a few months when this article is in print.

By then, more light may have been shed on Amanda’s key question: “What are we willing to risk for a couple handfuls of jobs?”

AI’s True Impact

Economist Dean Baker has warned that the AI boom resembles the tech bubbles of the past—which, of course, eventually burst.

Baker also said it would be a net good if the AI bubble pops, writing in September 2025 that its collapse would “create the room the economy needs for policies that would make the lives of tens of millions of people far better.”

In the meantime, some community efforts against data centers are winning. In 2024, officials in Peculiar, Missouri, canceled a data center project after pushback from locals. Last year, the board of supervisors in Loudoun County, Virginia—home to about 200 data centers—amended policies to remove by-right development that had expedited data center construction, and the projects now require lengthier review processes that include public hearings. At least 10 cities and counties in Georgia have recently adopted moratoriums on approving new data centers. And on April 14, 2026, the Maine state legislature voted to put a moratorium on new construction of large data centers.

As the AI race continues, dozens more community groups are still organizing against changes in their communities over which they’ve had little say, even as they may see limited benefits and experience outsized consequences.

“The economic boom we’re seeing now is just the early signal of a much larger transformation,” claims the 2025 report by the data center lobby group, the American Edge Project. “AI’s true impact will be far broader.”

Yet that impact may not improve communities, instead leaving them with higher utility costs, toxic emissions, and no real solutions to the ongoing jobs crisis.

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