State governments act to control power demand

Governments are becoming increasingly aware of the challenges that the next generation of large data centers presents to their energy and water infrastructure, as well as to the communities that host clusters of these facilities. Data center operators have been slow to acknowledge and address the order of magnitude shift in their operational footprint and its risk to energy and water supplies, as well as the supporting transmission and distribution infrastructure. As a result, governments are moving swiftly to pass legislation to manage planned growth.

In the first half of 2025, three US state governments (Minnesota, Oregon and Texas) passed legislation to manage large data center projects’ access to energy and/or water resources and require participation in electricity demand management programs (Table 1). These laws fundamentally change the government review and permitting processes and require large data center operators to address these issues. Navigating these processes will require increased collaboration between data center operators and governmental and private entities, such as grid operators, public utility commissions and utilities. Malaysia has enacted a similar framework of data center controls (see Malaysia manages data center growth with regulations).