Data Center Facts for Alabama Communities

No. Alabama Power requires data centers to pay the full cost to serve their operations, a standard the Alabama Legislature also wrote into state law in 2026. On top of that, data center agreements include minimum bills and minimum term lengths – so, if a project scales back or leaves, families and small businesses aren’t left covering the tab.

Water use depends on the facility’s cooling system. Some data centers use closed-loop systems that recirculate water. Others use air-cooled systems that require little or no water for cooling. Local leaders will review what cooling system is proposed, how much water it will use, and whether local water infrastructure upgrades are needed to support the project.

A data center does not connect to the grid until engineering studies are complete and the required upgrades are planned or built. Those studies determine what infrastructure is needed to serve the project safely and reliably. Alabama Power requires data centers to pay for their own infrastructure improvements, which can make the grid even more reliable at no additional cost to other customers.

Data centers pay taxes – and Alabama law protects school taxes in full. That can mean millions per year for local schools, per project, without raising anyone's tax rate. Some projects receive incentives on other taxes, and local leaders review those numbers before approving anything.

Data centers create construction work, supplier work, local service contracts and tax-base growth. Census data shows Alabama’s share of data center employment doubled from 2016 to 2023. Brookings found that counties receiving their first large data center saw private employment rise 4% to 5% over five to six years, with construction employment up 11% and information-sector employment up 22%. The direct job count is only one part of the local impact.

Not all data centers sound the same – the cooling design largely sets the noise profile. Liquid-cooled facilities run quieter, while air-cooled designs with large fan walls can run louder. What neighbors actually hear is controlled in permitting: local agreements can require a sound study before approval, enforceable decibel limits at the property line with stricter nighttime caps, sound walls and low-noise equipment, and follow-up testing after the facility opens. Fairfax County, VA requires noise studies both before and after construction, plus sound barriers around equipment; Columbiana, AL's 2026 ordinance caps future data centers at 67 decibels by day and 57 at night and on weekends. For scale: normal conversation is about 60 decibels; a gas lawnmower runs about 90.

Data centers connected to the electric grid primarily use electricity for normal operations. Air-emissions questions usually focus on backup generators or other onsite power equipment. Those sources must meet local, state and federal requirements, including local zoning or development conditions, Alabama Department of Environmental Management air-permitting requirements and federal Clean Air Act standards.

The two phases look different. During construction – typically one to three years – truck and worker traffic will increase, local leaders may require a traffic study up front, designated truck routes, off-peak hauling schedules and road-repair agreements before approval. Once open, a data center is one of the lightest long-term traffic generators of any large development: a small workforce arriving in shifts around the clock, periodic equipment deliveries and no customer or visitor traffic. Institute of Transportation Engineers data shows a data center generates a fraction of the daily vehicle trips of a warehouse or distribution center of the same size.

What it looks like is decided in permitting – before anything is built. Most data centers are one to two stories tall. Local leaders can set height limits, setbacks from homes, landscape buffers, building and screening standards and outdoor-lighting rules, including dark-sky lighting standards.

Alabama Power’s data center agreements include minimum bills and minimum term lengths, so families and small businesses are protected if a project changes course. Also, unlike single-purpose manufacturing facilities, data center buildings can be adapted for new technology or new tenants.

Some data center customers choose to buy renewable energy to meet their own corporate goals. That is a customer choice, not a requirement for every data center. Under Alabama Power’s Renewable Subscription Program, the data center customer covers the cost of that renewable project, not other customers. State regulators review the terms of the contract; the project developer is responsible for siting, permitting and working closely with members of the local community.

Keeping Americans' data on American soil is one of the strongest reasons to build data centers here. Information stored in U.S. facilities sits under U.S. law – not a foreign government's. The facilities themselves house computing equipment; the companies that own the data – healthcare providers, banks, government agencies – choose where to store it based on security and legal requirements. The federal government also reviews foreign investment through established national security processes, including restrictions on transferring Americans' personal data to foreign adversaries.