Rural North Carolina counties weigh AI data center risks vs. revenue

Rural communities caught between economic need and environmental risk

Rural North Carolina counties are becoming battlegrounds in the national AI infrastructure boom, as local officials weigh economic development promises against residents' concerns about environmental impact and rising utility costs.

The tension came to a head in Edgecombe County, where commissioners debated whether to sell 122 acres of county-owned land for a 900-megawatt AI data center—a facility large enough to power more than 700,000 homes. Nearly 180 local residents signed a petition opposing the sale, while Commissioner Donald C. Boswell defended the county's need for economic development, according to North Carolina Health News.

"Fifty-one percent of our county is on Medicaid," Joy Hicks, director of advocacy and policy for the North Carolina Association of County Commissioners, told lawmakers. "We've got an aging population that has dropped since the last census. We've got to put something at Kingsboro."

The economics are stark: while Digital Realty paid roughly $960,000 per acre for land near Charlotte, Microsoft purchased rural North Carolina sites for as little as $19,000 per acre—well below the $2 million-plus per-acre costs in Virginia's established "Data Center Alley."

Two bills reshape the data center landscape

At the state level, two pieces of legislation are moving through the General Assembly that could fundamentally alter North Carolina's approach to data center development.

Senate Bill 730, the Ratepayer Protection Act, would require large data centers—those with peak monthly demand of at least 100 megawatts—to cover the cost of grid expansions and transmission upgrades through long-term contracts. The bill also mandates water-saving cooling technologies and bans more wasteful evaporative systems.

The most controversial provision prevents the Utilities Commission from authorizing coal plant retirements until new nuclear development reaches defined regulatory milestones. Climate advocates warn this could push North Carolina further off course from its 2050 net-zero emissions target.

"Think about all the pollution that would go into the air from those coal generating plants running that much longer," said Kevin Wilson, co-chair of Edgecombe County Neighbors for Data Center Accountability, noting that nuclear plants typically take at least 20 years to build.

Meanwhile, House Bill 1213 originally targeted data center tax breaks but was amended to instead end the 80 percent property tax exclusion for utility-scale solar projects installed after July 1, 2027. The solar tax break currently costs local governments more than $40 million annually but provides crucial income for rural landowners.

Ken Gurganus, an eastern North Carolina farmer with a solar lease, told the House Finance Committee that his check from the solar company is "essential operating income" as fertilizer, fuel, and equipment costs have skyrocketed while crop prices have risen only modestly.

Why it matters

The clash in Edgecombe County reflects a broader dilemma facing rural communities nationwide: AI's exponential growth demands massive new power infrastructure, but the facilities that supply it concentrate environmental burdens in areas with the least political and economic leverage. North Carolina already provides some $50 million in sales-tax breaks for qualifying data centers—a figure Governor Josh Stein's staff estimates could grow to $450 million annually if all planned facilities are built. His administration argues the industry "simply does not need economic incentives to occur," but low-wealth counties see few alternatives for generating tax revenue and jobs.

Edgecombe County commissioners voted to hold a public hearing on a proposed 24-month data center moratorium, expected to be discussed at their August meeting. Both state bills remain in flux, with Senate Bill 730 returning to the Senate after House amendments and House Bill 1213 facing further Senate debate.

These details were first reported by Will Atwater for North Carolina Health News.