Briefing 03/27/2026
This week’s round-up: In Virginia, local opposition is emerging early against Avaio’s proposed $3B “Project Hercules” in Appomattox County, highlighting how pushback is moving into the pre-permitting phase. In South Dakota, Gov. Larry Rhoden signed SB 135 and HB 1038, imposing new requirements on large data centers to cover infrastructure costs. And in Pennsylvania, Archbald Borough denied the “Project Scott” data center campus in a 5–0 vote, with organized resident opposition.
In Virginia, Protests Emerge Over $3B “Project Hercules” Data Center
A proposed 452-acre, $3 billion data center campus known as “Project Hercules,” led by Avaio, is facing local opposition in Appomattox County. County and developer presentations say the project could start with 50 MW in 2027 and scale much higher over time, with Avaio’s site page describing a path to 1GW+.
At a March 23 public information meeting hosted by the county Economic Development Authority, residents pressed officials and Avaio over transparency, water use, noise, traffic, land use, and the project’s scale in a rural area. Opposition has also coalesced online through the public Facebook group Appomattox Data Center Watch. No rezoning vote has happened yet, but the project is already generating visible local resistance.
Why it matters:
Early-stage opposition is shaping project timelines: Community pushback is forming before formal approvals, increasing the likelihood of delays during zoning and permitting.
Rural siting is becoming more contested: Large campuses in rural counties are drawing organized scrutiny, challenging the assumption of smoother approvals outside major metros.
South Dakota Enacts Data Center Restrictions After Incentive Push Fails
South Dakota Gov. Larry Rhoden signed SB 135 and HB 1038 after a legislative fight over whether the state should attract large data centers with tax breaks or regulate them more tightly. SB 135, sponsored by Sen. Chris Karr, applies to data centers with peak demand of 10 MW or more and requires them to pay electric-system costs attributable to their projects, show that water use is compatible with local supply, and preserve local governments’ authority to regulate or prohibit data centers.
Meanwhile, bills pushing for tax incentives for data centers failed, including HB 1005 (a 50-year sales tax exemption), which was voted down 9-3 in committee.
Why it matters:
Cost-causer pays framework gaining traction: Developers must fund grid upgrades and regulatory review costs, increasing project expenses.
Local control reinforced over siting decisions: The law explicitly protects local authority to restrict projects, strengthening a key pathway for opposition.
Archbald Borough in Pennsylvania denies “Project Scott” data center campus after organized opposition
The Archbald Borough Council in Archbald voted 5–0 to deny a conditional use permit for an 18-building data center campus on 400 acres proposed by Archbald I LLC, tied to Provident Data Centers. The project—known locally as “Project Scott”—had been under review following the borough’s adoption of a data center overlay zoning district requiring conditional approval.
The denial came under unusual procedural pressure: a missed legal notice forced the borough to act before completing hearings to avoid automatic approval under Pennsylvania law. The borough solicitor stated the decision was made to prevent a “deemed approval,” not on full merits. Residents had been organizing opposition for months, arguing that the developer had failed to provide the required studies on power, water, noise, traffic, and environmental impacts.
Why it matters:
Procedural risk can determine outcomes: Even incomplete hearings can result in project denial when timing, zoning rules, and legal thresholds collide.
Overlay zoning is becoming a key control tool: Archbald’s data center overlay required a conditional-use process, giving local officials and opponents of the project leverage to block it.
Mentions in the Press
Local Opposition Is Slowing A.I. Data Centers. Wall Street Has Noticed.
US lawmakers push for pause in data centres until AI safeguards in place
https://www.aljazeera.com/economy/2026/3/26/us-lawmakers-push-for-pause-in-data-centres-until-ai-safeguards-in-place
Oklahoma City council members who welcomed Google data center now face recall effort
https://www.nbcnews.com/news/us-news/oklahoma-city-council-members-welcomed-google-data-center-now-face-rec-rcna264726
Moreno: Data center backlash grows amid energy concerns
https://spectrumnews1.com/oh/columbus/news/2026/03/25/moreno-data-center-backlash
Hyperscalers are building racks before the grid is ready
https://aimmediahouse.com/ai-supply-chain/hyperscalers-are-building-racks-before-the-grid-is-ready
Upcoming update: Q3-Q4 2025
Data Center Watch will soon release its next report covering developments in Q3–Q4 2025, analyzing the continued expansion of grassroots opposition, regulatory responses, and political debates surrounding data center development across the United States. The report will provide updated data on blocked and delayed projects, emerging activist groups, and policy actions shaping the siting landscape.
Stay tuned for the full release!