How Will the Democratic Wave Impact Data Center Development?
The 2026 midterms sent a clear message about data centers. Democrats took majorities in both chambers of Congress, flipped governor's offices in Texas, Georgia, Ohio, Iowa, and Nevada, and won on platforms that put data center costs front and center. Campaigns spent more than $380 million on TV ads mentioning data centers (ABC News). Local voters had their own say too: of 41 data center ballot measures across 10 states, voters sided with development exactly once (CNBC).
To sum it up for data center developers: AI is too big a revolution to slow down, and capital will find a way. The demand is not going anywhere. Wood Mackenzie's base case calls for roughly 191 GW of new grid-connected data center IT capacity between 2026 and 2035, with data centers driving about 65% of U.S. load growth over that period. What the election changes is where that capacity gets built, how big each campus can be, and how it gets powered. This post walks through what changes now, where developers are already moving, and what to watch in 2027.
The First Impact on Data Center Development: Local Moratoriums and New Governors
The most immediate effect is local. Ohio alone accounted for 21 of the 41 data center measures on the ballot, and results ranged from zoning limits to outright pauses. In Wells, Maine, more than 80% of voters approved a retroactive 180-day moratorium. LandGate proprietary data tracks over 700+ moratoria and community sentiment legislature at the state, county, and municipal level in real time.
In light of the US grid being infrastructurally disadvantaged to meet data center-driven load growth, the last two quarters of 2026 already saw a stark increase in anti-development legislation. Large GW scale projects have faced delayed timelines and structural changes in response to high level changes, such as FERC Section 206 (FPA), that have trickled down to an individual market and ISO level (ERCOT batch processing delays, PJM matchmaking). PJM’s backstop procurement plan prior to the election indicated a 11.5GW shortfall by 2030, marking their second consecutive shortfall in the last two years of data center demand growth. Ohio’s election results validated these numbers. Voters in Granville, Hubbard, Piqua, Urbana, Trenton and Upper Sandusky approved construction bans and Grove City approved Issue 28, requiring a referendum on large development projects.
The bigger shift is at the state level, where several winning governors campaigned directly on data center policy:
Texas: Governor-elect Gina Hinojosa called for pausing data center approvals until the Legislature passes new protections. Wood Mackenzie expects her administration to push toward local community approval in place of automatic tax incentives and centralized permitting, with the next legislative session opening in January 2027.
Ohio: Governor-elect Amy Acton proposed an immediate moratorium on new construction.
Georgia: Governor-elect Keisha Lance Bottoms promised a temporary statewide pause.
Kansas: Democrat Cindy Holscher, who held a narrow lead as counting continued, has advocated halting new development.
Michigan: Governor-elect Jocelyn Benson champions a bring-your-own-power model that requires developers to supply new generation.
Campaign platforms take time to become policy. Several of these governors will face Republican or split legislatures, including Texas. But even where full moratoriums stall, expect more of the policies that are easier to pass: tighter permitting, local approval requirements, rollbacks of tax incentives, and rules that make large loads pay their own way. New Jersey's Data Center Fair Share statute, which requires large facilities to pay for at least 85% of requested capacity over 10-year terms, is one model other states may follow.
Wood Mackenzie’s base case estimates 191 GW of grid-connected data center IT capacity investment till 2035, and LandGate estimates hold Texas responsible for 16% of it. Texas will remain a leading market thanks to its power resources, gas infrastructure, and independence from FERC. But developers there should plan for slower speed to power.
Data Center Developers Already Saw This Coming
This shift began before the midterms. One example is Cheyenne, Wyoming, which has quietly become a main U.S. AI infrastructure hub.
Google is behind Project Tembo, a 2.7 GW campus on 716 acres south of Cheyenne that can scale up to 10 GW. Bloomberg reported a $17 billion investment.
Microsoft, in Cheyenne since 2012, won city council approval in July to annex roughly 3,460 acres for future expansion.
Meta has an $800 million campus nearby, and Related Digital is building a $1.2 billion, 302 MW campus for CoreWeave.
Prometheus Hyperscale says it is in talks for gigawatt-scale campuses near Evanston and Casper.
The state is actively courting this growth. In June, Governor Mark Gordon signed an executive order titled "Data Centers the Wyoming Way" directing state agencies to support large-scale development.
Lighter regulation doesn’t mean no obstacles, and state-level support doesn’t eliminate local scrutiny. The Microsoft annexation passed on a 6–3 vote after more than five hours of testimony. Opponents gathered over 3,000 signatures for a referendum and have challenged the vote in court, according to Cowboy State Daily.
Washington: Gridlock, Vetoes, and Federal Land
At the federal level, the outlook is more stable than headlines suggest. Democrats now control Congress, and bills like the GRID Act would require data center developers to provide their own energy. But Congress would need a two-thirds majority in both the House and Senate to override a veto, and President Trump has made AI infrastructure a priority. Federal ratepayer-protection legislation could stall, which leaves states to set cost-allocation policy for data centers.
The Bipartisan American Affordability and Jobs Act (BAAJA) could be the likeliest reform proposal implemented. BAAJA would amend the National Environmental Policy Act (NEPA), the Federal Power Act (FPA) and the National Historic Preservation Act (NHPA). The proposed reform allows data center developers, lenders, and transmission owners to follow streamlined review with accelerated permitting processes. 60-day application review timelines, record decisions within 45 days, and shortening of the NEPA schedule and base consultation period signals shorter timelines to power deliverables for data center operators. Considering BAAJA’s section 401 and judicial review provisions are enacted, predictable water quality certifications and reduced vacatur risk for new gas pipelines may be expected.
Federal land is the wildcard
The administration is already working to put federal land into play. Trump's July 2025 executive order, "Accelerating Federal Permitting of Data Center Infrastructure," directs agencies to make federal land available for data centers. The Bureau of Land Management is reviewing at least 15 data center or data center-related proposals covering 17,000 acres across Arizona, Idaho, Nevada, Oregon, Utah, and Wyoming. In Wyoming alone, BLM manages about 18 million acres.
As state and local resistance grows, expect pressure to expand this program. Building on federal land can limit local control, since it reduces city and county authority over the project. It is not a guaranteed bypass, however. A federal panel halted Nevada's Townsite project, the first proposed data center on public lands. What started as a solar farm and then became a data center, the Townsite project is now facing legal challenges due to a lack of regulation compliance and community backlash.
Tribal lands: a sovereign decision
Tribal lands are a separate conversation, because tribes decide for themselves. The Department of Energy, through the Bureau of Indian Affairs (a long time partner of LandGate), is actively encouraging tribal partnerships. Just like for oil & gas development, some tribal leaders may see data centers as a path to economic diversification. Others have said no: the Cherokee Nation banned hyperscale development on tribal and trust lands, and the Seminole Nation of Oklahoma enacted a moratorium. Developers who want to work on Native land should expect early, government-to-government engagement on the tribe's terms.
Change in Data Center Project Size?
Data center hubs are expected to see variations in long term growth forecasting considering stricter legislature, tighter permitting schedules and grid infrastructure resources. In states with abundant land, generation and permitting, data center development may see market migration. Wyoming's 2.7 GW Project Tembo shows. In states moving toward stricter rules, regulators are more likely to cap large-load interconnections, require curtailment, or make developers pay for grid upgrades.
Ultimately, transmission is the binding constraint. Wood Mackenzie reports that high-voltage transmission completions in the 2020s are running at less than half the pace of the 2010s, and grid congestion costs exceed $10 billion a year. Equipment is tight too: an August executive order restricting bulk-power equipment from 24 countries could push the power transformer deficit to 18%. When new lines are slow to build, the sites that win are the ones with capacity on existing infrastructure.
Factors to Watch
Factor | Why it matters |
Supply chain | The bipartisan CIRCUIT Act (S. 448) could add distribution transformers to the 45X credit at 10% of production costs. DOE’s implementing rules, due in late December, will clarify whether data center loads are covered and what licensing exceptions apply. |
2027 legislative calendar and tax incentives | New governors' policies will take shape in next year's sessions. Some states are considering repealing data center tax incentives, primarily due to cost and lost local revenue. |
Water, permitting and zoning | These are increasingly where projects get stopped. Proposed federal bills such as the Data Center Water and Energy Transparency Act of 2026 could add requirements that significantly alter application processes. |
Fresh transmission and offtake data matters more than ever. When policy can shift a market in a single election cycle, you need current data on where grid capacity actually exists. Book a demo to see LandGate's transmission, substation offtake, and interconnection queue data.
Behind the Meter Will Accelerate
If communities and utilities push back on grid connections, developers will bring their own power. This trend was already underway, and the election accelerated it in two ways. First, bring-your-own-power is now a policy goal for Democrats too, from Michigan's governor-elect to the GRID Act in Congress. PJM’s backstop procurement plan prior to the election indicated a 11.5GW shortfall by 2030, marking their second consecutive shortfall in the last two years of data center demand growth, prompting bring your own power initiatives into their internal legislature. Second, behind-the-meter generation sidesteps the ratepayer cost fights that drove voter backlash.
Google's Cheyenne campus shows what this looks like at scale. Utility Black Hills Energy will build 564 MW of new generation for $1.8 billion between 2027 and 2029. It will also manage about 2.1 GW of third-party Wyoming resources through a private microgrid, and Google bears all costs of serving the campus.
Demand for on-site power, which LandGate estimates will take up 30% of data center load, is expected to see some shifts. Wood Mackenzie’s base case indicates utility scale solar capacity to expand by 306GW till 2035, onshore wind additions average 9.5GW a year through 2030. Following the restoration of the Inflation Reduction Act via The Energy Bills Relief Act, anticipated stagnation post the Big Beautiful Bill could be subject to change. Reverting to the IRA’s initial structure would allow technology neutral projects to be eligible for the full 30% ITC. Developers leveraging solar, wind, battery storage, fuel cell technology, geothermal, and nuclear power would achieve larger capital efficiency.
LandGate and Wood Mackenzie data shows that natural gas remains a large driver of behind the meter (on-site) power demand. Behind-the-meter gas demand is forecasted to be concentrated near supply basins like the Permian. ERCOT is also proposing net-metering frameworks for behind-the-meter generation. Developers can expect more redundancy as well: more on-site backup, battery storage, and hybrid grid-plus-on-site designs, so a single regulatory decision can't strand a campus. For behind-the-meter sites, the key data shifts from transmission to fuel: natural gas pipeline proximity, available gas offtake capacity, and geothermal resources.
Other Shifts to Consider
Entitled sites gain value. Moratoriums typically target new construction, not existing facilities. Sites that already have zoning, permits, and interconnection agreements could become more valuable, though grandfathering rules will vary by state.
Tax incentives are under review. New York's governor wants to repeal the sales tax exemption for large data centers, and Texas's incoming administration has signaled a similar direction.
Air permitting gets harder. More on-site gas generation means more exposure to Clean Air Act rules. Sites in EPA non-attainment areas face stricter permitting and emission offset requirements.
Ratepayer protections spread. With FERC's October rejection of PJM's interim large-load proposal, states will design their own large-load tariffs. Expect a patchwork of rules developers must model site by site.
Final Thoughts
The Democratic wave won't stop the AI buildout, but it will redirect it. Expect more local moratoriums and state-level rules in flipped states. Expect continued federal support from the White House, including a push onto federal land. And expect a growing divide between gigawatt campuses in friendly states and smaller, more regulated projects elsewhere.
Through all of it, capital will keep flowing toward the sites with available land, available power, and supportive communities. The developers who win will be the ones with the most current data on where all three still line up.
LandGate gives data center developers a single view of the factors this election just reshuffled. That includes existing and proposed data center sites, transmission and subtransmission lines, substation injection and offtake capacity, interconnection queues, natural gas pipelines and offtake, and EPA non-attainment zones. Policy can now change faster than a site selection cycle. Developers who see the shift first will lock up the best land and power.
