Transparency

Local governments must use the application process to demand as much transparency as possible.

Specify Minimum Transparency Requirements as Part of the Application Process

The minimum transparency requirements as part of the application process include, but are not limited to:

• water usage and mitigation;
• noise study and mitigation;
• energy usage and mitigation;
• on-site emissions;
• value of tax abatements developer is receiving for the project;
• name of all companies involved in data center project, including developer, shell companies, data center operators, and financers;
• jobs (short-term and permanent, hiring efforts, permanent employee wages); and
• a displacement and holistic environmental impact report, centering environmental justice considerations (such as those emerging from redlined/fenceline communities) that establishes the data center will not exacerbate the displacement of residents and local businesses.

Note: In some cases, data center developers are applying for permits without having tenants or end users in place. This can impede a city’s ability to demand transparency measures. Cities should reject any application that cannot account for the data center’s projected resource use or does not offer transparency into economic development terms.

Mandate Public Notice and Community Hearings

Require a minimum number of public community hearings as a central part of the approval process. Upon receipt of a data center application, the appropriate public administrator must add discussion of the data center application to the agenda of an upcoming regular meeting. 

Ensure there is adequate advertisement for the hearing, including but not limited to publication in officially designated newspapers, social media, and certified mailings to all households within the approving government’s jurisdiction. Jurisdictions that depend on key resources (e.g., watershed and energy infrastructure) planning to be used by the data center should also be notified. Clearly display the time and place of the hearing in all communications. 

Ensure that educational information is provided to residents well in advance of any hearing, with materials from independent assessments rather than developers. Engage in proactive outreach to community leaders, community groups, and residents of areas both next to the proposed site and that would be impacted more broadly by rate increases, pollution, or resource use.

Reject Proposals Without Adequate Transparency Measures

Reject data center development or expansion proposals that do not have adequate transparency measures. Establish a waiting period before the rejected proposals can be submitted for reconsideration.

1. “Palantir and AWS,” Palantir, https://www.palantir.com/partnerships/aws. ↩︎
2. Caroline Haskins, “ICE Is Paying Palantir $30 Million to Build ‘ImmigrationOS’ Surveillance Platform,” Wired, April 18, 2025, https://www.wired.com/story/ice-palantir-immigrationos. ↩︎

Nondisclosure agreements (NDAs) are secrecy contracts signed between a data center developer and local government(s) that prohibit the government from sharing information about the data center development deal with the broader public. These are widely used in data center development—in Virginia,¹ 25 out of 31 localities with an existing, approved, or proposed data center had an NDA—and impede the public’s ability to make informed decisions about their community. Local governments should pass an ordinance prohibiting the city from entering into NDAs with data center developers, and in some jurisdictions may consider a broader prohibition on NDAs in large economic development projects. Local governments can also approve formal policies preventing or restricting the use of NDAs, and can institute sunshine periods that require public release of documents related to the data center development.

In some cases, banning or restricting NDAs might be done at the state level.

1. Eric Bonds and Viktor Newby, “Data Centers, Non-Disclosure Agreements and Democracy,” Virginia Mercury, April 30, 2025, https://virginiamercury.com/2025/04/30/data-centers-non-disclosure-agreements-and-democracy/?utm. ↩︎

It is equally important to ensure there are continued transparency mechanisms in place after the approval process. Without these, effective enforcement of conditions in data center approvals and addressing harms from construction and operation will be more difficult.

Require Monthly Public Disclosure

Require data centers to give monthly reports on data centers’ water and electricity usage.

Additionally, data centers must report the results of noise studies; the amount of tax incentives received from local and state governments; the number of jobs created, including the wages and benefits offered to both construction and permanent employees; and the total amount of dollars invested into the community at minimum every year.

This information must be submitted to the local agency overseeing the permitting process to ensure compliance with the terms of the conditional permit. Information should also be reported to a state agency that gathers and discloses this information online. For more information about how states can track and publish these metrics online, see Establish a Statewide Clearinghouse. A state clearinghouse might not be politically feasible in all states.

Ensure Continued Community Involvement

The local government must establish mechanisms for continued community involvement, including a system of public reporting and a city response system to address community concerns. This should also include a post-approval hearing for additional transparency.

Establish Enforcement Mechanisms

Local governments must build out an enforcement mechanism to ensure that data centers abide by transparency requirements contingent upon approval. Jurisdictions must reserve the right to revoke the conditional use permit or remove the certificate of occupancy if conditions are not met. Additional penalties for violation of application terms can include non-nominal fines and civil penalties.

Note: Cities may have to amend their zoning code to increase the acceptable fines, and that cities may need to consult the legality of occupancy removal.

Require that development projects make all electricity use public in monthly reporting, including whether or not a data center exceeds the energy capacity detailed in the will serve letter. This information must be submitted to the local agency overseeing the permitting process to ensure compliance with the terms of the conditional permit. Information should also be reported to a state agency that gathers and discloses this information online. For more information about how states can track and publish these metrics online, see Establish a Statewide Clearinghouse.

Public-record and agency disclosure laws grant the public the right to inspect government records. This is a critical way for the public to learn about the industry moving into their communities. 

States can protect against workarounds data centers try to take by specifying what data center developers must reveal as a matter of public interest, and how they must do so. This includes:

Prohibit Trade Secret Exceptions to Transparency

Clearly specify that information collected during the application process does not constitute sensitive information or trade secrets and cannot be redacted or exempted from public disclosure. Such information includes:

• Noise study and mitigation 
• Projected and actual energy usage and mitigation 
• On-site energy emissions 
• Projected and actual water usage and mitigation 
• Value of tax abatements developer is receiving for the project 
• Name of all companies involved in data center project (including developer, shell companies, data center operators and/or end users, and financers) 
• Jobs (short-term and permanent, hiring efforts, permanent employee wages) 
• The results of a displacement and holistic environmental impact report, centering environmental justice considerations (such as those emerging from redlined/fenceline communities), and establishing that the data center will not exacerbate the displacement of residents and local businesses

Require Submission of Documents, Specifically Digital Copies

Require data centers to provide documents, including digital copies, for review. This protects against data centers solely providing information for review in person or during video calls, which would prevent the public from examining records.

Protect Against Anonymity

Prohibit the use of a special-purpose entity (SPE), subsidiaries, shell companies, and/or a third party to provide anonymous information. This protects against data center companies remaining anonymous.

Beware of Bad-Faith Litigation

In Oregon, Google sued a newspaper to avoid release of records detailing the amount of water the tech giant used to cool a data center, claiming that the records would reveal trade secrets.¹ This in spite of Oregon’s public-record laws, which require real trade secrets to be released when they are in the public’s interest.

1.  Seth Stern, “It’s Time for Open Records Laws to Promote Transparency,” Freedom of the Press Foundation, December 22, 2022, https://freedom.press/issues/its-time-for-open-records-laws-to-promote-transparency. ↩︎

NDAs are secrecy contracts signed between a data center developer and local governments that prohibit the government from sharing information about the data center development deal with the broader public. These are widely used in data center development—in Virginia, 25 out of 31 localities with an existing, approved, or proposed data center had an NDA—and impede the public’s ability to make informed decisions about their community. States should pass laws prohibiting the localities from entering into NDAs with data center developers.

Require states to design, implement, and maintain a publicly accessible website to provide information about all data center facilities in the state.

Require Monthly Reporting

Require all large-load customers to report monthly on energy and water usage.

Require Additional Reporting

Data centers must also provide information on noise studies, tax incentives, job creation, local hiring, construction and permanent employee wages and benefits, and dollars invested into the community to the clearinghouse.

Funding

The project should be funded through a fee charged to each owner or operator of a large-load customer.

Statewide review of data center projects is important to adequately track and evaluate resources that go into data center development, including interconnection requests, energy use, water usage, emissions from on-site generation, tax subsidies, and jobs. This process can and should evaluate all projects that use, plan to use, or are able to use 20 megawatts (MW) or more, even if those projects are powered with behind-the-meter energy, since they would not interconnect to the electric grid.

Prohibit the Department of Energy or any other federal agency from leasing land or providing easements to private developers to build AI infrastructure on public land. This includes actual data centers and the infrastructure to support them, like on-site electricity generation and backup electricity facilities, natural gas and carbon capture and storage pipelines, and off-site energy projects.

Require a federal agency to design, implement, and maintain a publicly accessible website to publicize information about all data center facilities across the country. Charge this agency with monitoring and enforcing the transparency requirements outlined below. The federal clearinghouse should work in tandem with state clearinghouses to standardize reporting.

Require all data center projects—whether or not they receive federal support—to report the following transparency measures to a federal agency charged with monitoring, tracking, and enforcing transparency requirements:

Before Operation Begins

Require the following information to be certified in a public clearinghouse (a publicly available database). Federal agencies should retain the right to revoke or suspend data center permits for failing to adequately disclose the following metrics:

Financial Vehicles

Names of all companies involved in a data center project (including developer, shell companies, data center operators and/or end users, and financers).

Water Usage

Comprehensive accounting of the data center’s projected water usage (broken out by month), including projected water used in construction, server cooling, facility cooling (including cooling towers) and other ancillary water uses; projected water sources; anticipated water-conservation plan; and water infrastructure costs.

Energy Usage and Infrastructure Needs

Comprehensive accounting of the data center’s projected monthly energy usage; breakdown of all necessary costs to service the data center, including transmission, energy generation, capacity, and financing costs.

Energy Emissions and Air Quality

Projected value of all on-site energy emissions. Require the installation and use of best-in-class technology to continuously monitor and report air quality.

Labor

Require projected breakout of temporary and permanent jobs, including number of full-time employees, subcontractors, and temporary workers.

Environmental Review

Mandate that the construction of each data center be treated (1) as a major federal action, and (2) as a major impact on the environment under the National Environmental Policy Act (NEPA), thereby making each subject to a few environmental impact statements (EIS). At a minimum, an EIS must evaluate

• water withdrawals, and sources
• water discharge and thermal pollution
• local and regional electricity-systems impacts
• backup generation emissions
• air pollution and particulate emissions
• chemicals used for cooling
• noise impacts
• cumulative impacts, and
• disparate impacts.

After Operation Begins

Federal agencies must monitor and enforce transparency metrics. Failure to properly disclose metrics will result in revocation of permit or operating license.

Financial Vehicles

Annual reporting of all companies involved in a data center project (including developer, shell companies, data center operators and/or end users, and financers).

Water Usage

Require monthly, comprehensive accounting of the data center’s actual water usage, including projected water used in construction, server cooling, facility cooling (including cooling towers), and other ancillary water uses; projected water sources; anticipated water-conservation plan; and water infrastructure costs.

Energy Usage and Infrastructure Needs

Require comprehensive accounting of the data center’s monthly energy usage; and annual summary of costs necessary to service them, including from transmission, energy generation, capacity, and financing.

Energy Emissions and Air Quality 

Actual value of all on-site energy emissions and air quality metrics must be reported monthly.

Labor

Require annual breakout of temporary and permanent jobs, including number of full-time employees, subcontractors, and temporary workers. Include demographics such as race, gender identity, sexual orientation, education level, and pay and benefits data for each represented group. Include client overhead cost for the bill-rate per head count of subcontracted workers, organized by job title.

Clearinghouse Transparency

The clearinghouse must also publish the following information to ensure transparency about any federal agencies issuing permits for a data center project and its associated on- and off-site infrastructure:

Lead Agency

There should be a lead agency designated for the project, and the contact information for the staff of that agency should be publicly accessible.

Permit Status

All agencies issuing permits for a data center project and its associated on- and off-site infrastructure must regularly update the status of their respective permits for the project.

Comment Period

All deadlines for the comment periods of each permit must be clearly communicated.

Review

Estimated timelines for any necessary environmental review and transparent completion dates for any required permitting must be clearly communicated.

Nondisclosure agreements (NDAs) are secrecy contracts signed between a data center developer and local government(s) that prohibit the government from sharing information about the data center development deal with the broader public. These are widely used in data center development—in Virginia,¹ 25 out of 31 localities with an existing, approved, or proposed data center had an NDA—and impede the public’s ability to make informed decisions about their community. Congress can act to prohibit data center developers from entering into NDAs with state and local governments in large economic development projects.

1. Eric Bonds and Viktor Newby, “Data Centers, Non-Disclosure Agreements and Democracy,” Virginia Mercury, April 30, 2025, https://virginiamercury.com/2025/04/30/data-centers-non-disclosure-agreements-and-democracy/?utm. ↩︎

Public-record and agency disclosure laws grant the public the right to inspect government records. This is a critical way for the public to learn about industries that are attempting to move into their communities. Congress can act to clearly specify that information collected during local, state, and federal data center application processes does not constitute sensitive information or trade secrets and cannot be redacted or exempted from public-disclosure laws. Such information includes:

• noise study and mitigation 
• projected and actual energy usage and mitigation 
• on-site energy emissions 
• projected and actual water usage and mitigation 
• value of tax abatements developer is receiving for the project 
• names of all companies involved in the data center project (including developer, shell companies, data center operators and/or end users, and financers) 
• jobs (short-term and permanent, hiring efforts, permanent employee wages) 
• the results of a displacement and holistic environmental-impact report, centering environmental justice considerations (such as those emerging from redlined/fenceline communities), and establishing that the data center will not exacerbate the displacement of residents and local businesses

Data center deals are becoming increasingly convoluted and opaque, with Big Tech firms using distinct legal entities known as special-purpose vehicles (SPVs) to fund and execute data center deals. These deals are “off-balance sheet,” meaning that the deal—and any debt the SPV has raised—is not listed on Big Tech firms’ balance sheets, thus masking a clear picture of a company’s financial health.¹ Federal policymakers should prohibit public firms from using SPVs and other financial vehicles to hide data center investments on balance sheets, or should fully investigate the terms of these deals. 

1. Advait Arun, Bubble or Nothing: Data Center Project Finance, Center for Public Enterprise, November 2025, https://publicenterprise.org/wp-content/uploads/Bubble-or-Nothing.pdf. ↩︎