Powering Progress: How Community Benefits Agreements Can Drive Responsible Data Center Development

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Estimated reading time: 15 minutes

Why This Matters for Rural Electric Co-ops

Data center development is accelerating across the U.S., and local governments often negotiate with developers quickly and behind NDAs. This brief lays out how community benefits agreements (CBAs) can turn those deals into binding, enforceable commitments covering water, noise, clean energy, and ratepayer protection.

The brief is written for local governments and community groups, but co-ops have a direct stake in the outcome: load growth, grid upgrades, and potential cost shifts to residential members. A co-op can use it to understand what its county or township may be negotiating, advocate for ratepayer protections and parent company guarantees, and consider similar safeguards in its own large-load contracts.

Key Takeaways

Implementation Considerations

• Regulatory or Governance Considerations: State law shapes what is possible. Tennessee and Texas, for example, limit local governments' ability to require CBAs. The brief does not focus on co-ops. A co-op's influence likely comes through coordinating with local officials and through the terms of its own large-load agreements.
• Staffing or Technology Requirements: Negotiating and monitoring these agreements takes legal, hydrological, and grid engineering expertise that small towns and co-ops often lack. The brief suggests developer-funded technical and legal funds. Smaller co-ops may need support from their statewide association, G&T, or outside counsel.
• Time-Sensitive Information: Figures and examples reflect conditions at publication, including data center growth projections and the number of states considering NDA legislation. Check current sources before relying on them.

Notable Examples

• City of Lancaster, Pennsylvania: Described as the first public CBA for a data center, with $20 million in community funding, 100% clean energy, water caps, and noise limits.
• City of St. Louis, Missouri: Agreement for the Armory Innovation District data center requires the developer to pay the city $15,000 for every $100,000 shortfall in projected tax revenue.
• Commonwealth of Kentucky: Its Qualified Data Center Incentive Program requires impact analyses, ratepayer impact information, and decommissioning plans before tax relief is approved. A state Data Center Project Checklist also requires developers to document local support, an energy plan that protects ratepayers, water and infrastructure needs, and community engagement.
• City of Aurora, Illinois: Used a 180-day moratorium to study grid, water, and neighborhood impacts, then adopted new data center and warehouse regulations.
• NAACP: Released a standardized data center CBA template for community coalitions.

Supporting Resources

• Community Benefits Agreements and Data Center Development (Vincent Nolette, Sabin Center for Climate Change Law, May 2026): This case study of the Lancaster, Pennsylvania agreement illustrates the brief's point that a signed CBA is not enough on its own. It shows how vague language can weaken enforcement. Renewable energy credits count as "clean energy," no megawatt load is stated, and there is no decibel threshold for noise.
• Community Benefits Agreements Database (Sabin Center for Climate Change Law): Referenced in the case study above, this database collects publicly available CBAs by project type, including solar, wind, storage, transmission, and data centers. It also links three templates, including the NAACP data center template. The solar, storage, and transmission agreements make it useful any time a co-op needs community buy-in for a new project.

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Estimated reading time: 15 minutes