The Small-Town Revolt Blocking $64 Billion in Data Centers

$64 billion worth of U.S. data center projects have been blocked or delayed by local opposition — and in Portland, New York, a dozen neighbors keep showing up month after month to fight a project at a former golf course. Meanwhile, a developer is suing the Minnesota city that paused data centers, Indianapolis is moving toward its own freeze, and federal regulators just handed all six grid operators an ultimatum. Here's what's reshaping the U.S. data center landscape right now.

🚨 **COMMUNITY** — In Portland, New York, opposition to a proposed data center at the former Sugar Hill Golf Course on Route 5 has become a monthly ritual: roughly a dozen residents attended the town board meeting in June, and about the same again in July. Kelly Perlette's change.org petition has topped 3,500 signatures, and Grape Belt Community Group yard signs dot the town. Nationally, Data Center Watch counts $64B in projects blocked or delayed, with 70+ rejections or restrictions in the first four months of 2026 — more than all of 2025. (Source: Observer Today / Data Center Watch)

⚖️ **LEGAL** — Eagan Capital LLC is suing the city of Eagan, Minnesota, asking a court to void the Twin Cities suburb's one-year data center moratorium and award at least $50,000 in damages. The freeze — in effect until February 17, 2027 — bars data centers over 20 MW or within 500 feet of homes. The company argues only the Minnesota Public Utilities Commission can regulate electricity demand; the city says it will "vigorously defend" the moratorium. (Source: Star Tribune / CBS Minnesota / MPR News)

🏛️ **POLICY** — Indianapolis City-County Council President Maggie Lewis announced July 10 she will introduce a citywide data center moratorium at the July 13 Metropolitan and Economic Development Committee meeting. Approved projects (Metrobloks, Sabey, DC Blox) would be grandfathered. Statewide, nearly a third of Indiana counties now restrict data centers: 11 with ordinances, 17+ with moratoriums, and outright bans in Marshall and Cass counties. (Source: WFYI / WISH-TV / Mirror Indy)

⚡ **POWER** — FERC issued Section 206 show-cause orders to all six regional grid operators — PJM, MISO, SPP, CAISO, ISO-NE and NYISO — directing them to justify or rewrite large-load interconnection rules. By July 20, each must report how it will ensure adequate generation for existing and new large loads; each then has 60 days to defend its tariffs or file reforms covering co-location, behind-the-meter generation and cost-shift protections. (Source: FERC / White & Case / National Law Review)

💧 **WATER** — U.S. AI data centers consumed roughly 1 trillion liters (264 billion gallons) of water in 2025 — the annual usage of 1.8 million Americans — and are now drawing 550 million gallons per day, per Mordor Intelligence. Nearly 63% of the country is in drought, and two-thirds of the 809 planned U.S. data centers sit on recently drought-stricken land. Texas facilities used ~49B gallons in 2025, projected to reach up to