Key developments
Ohio pauses new data center tax break
Gov. Mike DeWine's office said Ohio will pause new applications for the state sales tax exemption used to attract data centers, effective June 1, while lawmakers study sector impacts. Spectrum News 1 Ohio reported the exemption cost $554 million in fiscal 2024 and nearly $1.6 billion in fiscal 2025, far above earlier projections, and lawmakers have formed a joint committee as residents push a ballot drive to ban hyperscale data centers.
Why it matters
Ohio is reassessing one of the industry's most important incentives in a major data center market, which could change project economics statewide.
Sources & driving stories
SPECTRUM NEWS 1 OHIO
Spectrum News 1 Ohio coverageTexas moratorium triggers federal data center lawsuit
RCM Hill filed a federal lawsuit in Waco challenging Hill County's May 12 moratorium on new large battery storage, power generation, and data center projects in unincorporated areas. The complaint says Project Aquila is a 1,235-megawatt data center on more than 800 acres and argues the pause threatens a $61.75 million ERCOT capacity deposit due July 24, 2026. The same reporting says Hillsboro tabled a zoning amendment to define data centers and add supplemental regulations after residents raised concerns about water use, setbacks, height, and environmental impacts.
Why it matters
The case tests how far local governments can go to slow large data center projects once utility and financing milestones are underway.
Sources & driving stories
KWTX
KWTX coveragePennsylvania unveils GRID data center standards
Gov. Josh Shapiro unveiled Pennsylvania's Governor's Responsible Infrastructure Development, or GRID, standards, requiring developers to build, bring, or buy the electric capacity needed for a data center and to submit community outreach plans. Route Fifty reported that Shapiro wants state tax benefits tied to GRID certification and that the framework also adds transparency, workforce, environmental, and ratepayer protections. The move is intended to give projects more certainty while setting conditions for approval.
Why it matters
Pennsylvania is shifting from simple recruitment to a conditional development model that could become a template for incentive-backed data center policy.
Sources & driving stories
ROUTE FIFTY · Justin Sweitzer
Route Fifty coverageWorth noting
WORTH NOTING
Lakeland hyperscale proposal filed
A Tampa-area developer proposed a 600,000-square-foot Project Swan campus in Lakeland, but city staff said data centers are not listed as an allowed use under the current code.
WORTH NOTING
TVA eyes new rate class
TVA says AI data centers now make up about 18% of its industrial load and is considering a rate-class change so other customers do not bear the cost burden.
WORTH NOTING
Brookhaven moves toward AI moratorium
Long Island officials are preparing an 18-month pause on AI data center applications while residents press concerns about water use, grid strain, and environmental impacts.
Still unclear
OPEN QUESTION
Will Ohio replace the exemption?
The pause is temporary and tied to a legislative study, so the key question is whether the state rewrites, narrows, or restores the incentive.
OPEN QUESTION
Can Texas moratoria survive ERCOT deadlines?
RCM Hill says the Hill County pause undercuts a major ERCOT deposit and local approval milestones, making the legal and grid-timing clash central.