Birmingham Vote on Data Center Pause Highlights Search for Rules

The Birmingham, Ala., city council is scheduled to vote March 3 on a temporary suspension of new data centers so city officials can develop environmental and other rules for future projects, marking the latest in a trend of jurisdictions rethinking the booming market.

If the council approves the pause, Birmingham will join a growing number of cities and counties, including Atlanta, Denver, Phoenix, and Loudoun County, Va., that have moved to temporarily halt data centers’ construction.

Local governments want to review zoning and other regulations to determine if revisions are needed to protect communities from the energy, water, noise, and other impacts that data centers—large ones in particular—can have. But data center supporters warn against singling out one industry for additional regulations that may not be needed or appropriate.

Birmingham is calling the proposed data center construction pause a suspension—not a moratorium—to signal that it’s open to economic development if residents’ concerns are addressed, city staff and council members said during an initial Jan. 13 hearing about the proposal.

A suspension would allow the city to evaluate its zoning ordinance, which currently classifies data centers as a type of office, said Katrina Thomas, director of planning, engineering, and permits, in January.

That classification may not fit all data centers, said Hunter Garrison, a deputy director in the Mayor’s Office of Resilience and Sustainability, in January. Large, or “hyperscale” data centers, can consume as much energy as hundreds of thousands of homes, he said.

In the worst cases, they’ve decreased air quality, lowered property values, and increased energy bills, he said. Noise impacts and water usage also need to be evaluated, Garrison said.

Unknowns; Cumulative Impacts

Birmingham’s proposal follows significant public opposition that arose over a 4.5 million square foot data center campus project to be built on a 700-acre tract of forested land that the nearby city of Bessemer, Ala., rezoned in November for light industrial use.

Many public commenters at January’s hearing said the lack of transparency about the Bessemer development’s impacts on air, water, land, and energy bills is among the reasons they would appreciate Birmingham stepping back to review its policies.

Data centers’ cumulative risk to the region’s water supply and air quality should be a key consideration, said Charles Miller, policy director for the Alabama Rivers Alliance in January.

States, local governments, and communities are increasingly aware that the “virtual world” can have a significant environmental footprint.

Large data centers can consume millions of gallons of water a day. They typically use backup generators that release carbon dioxide, nitrogen oxides, particulate matter into the air, and they add to pollution indirectly by increasing the demand on local power plants.

At least 149 data center bills were introduced in 34 states in the 2025 legislative session, according to an analysis by Climate Xchange, which advocates a zero-emissions economy. Of the 149 bills, 20 were enacted with laws focused on permitting, tariff rates, and grid planning and reliability.

Legislation addressing data centers’ environmental and energy issues already has been introduced in at least 14 states this year, according to information from the National Conference of State Legislatures.

But some policy watchers view such legislative efforts with caution. Data centers offer tremendous economic and natural security benefits, said Andrew Bockis, a partner who focuses on permitting as co-chair of Saul Ewing LLP’s Environmental Practice, in an interview prior to the Birmingham City Council’s vote.

Any regulatory controls imposed must be based on principles, logical reasons that would apply to other industries, he said. It’s also important to future proof these regulations, so they allow for the many water-savings and other technologies data centers are investing in, Bockis said.

David Perry, chairman of the Birmingham Industrial Development Board, praised the council in January for approaching data center regulations thoughtfully.

“Not all data centers are equal. Some make better neighbors than others. Some I’d be comfortable having in my neighborhood; some not,” he said. Given the massive benefits data centers offer, he encouraged the city to take a “scalpel approach” to regulations.