Data center panic: solutions through regulation

By Josh T. Smith and Megan E. Jenkins, opinion contributors

The Hill

Public alarm over data centers has intensified recently, but that reaction risks becoming a kind of “group chat gone wild.” Rather than answering fear with bans or broad subsidy programs, Josh T. Smith and Megan E. Jenkins argue for clearer, more measured policy responses that address real concerns without needlessly disrupting industry or communities.

The authors caution against heavy-handed solutions such as outright bans or blanket subsidies. Those approaches, they write, can produce unintended consequences: they blunt market signals and often fail to target the specific issues that communities and regulators are trying to resolve.

Instead, the piece recommends relying on transparent regulation paired with market-based utility rates. According to the authors, rules that are clear and predictable — combined with pricing that reflects actual costs and system conditions — better align incentives, protect public interests, and allow data infrastructure to develop where it makes sense.

Smith and Jenkins urge policymakers to curb the impulse toward panic-driven fixes and to pursue targeted, accountable policy tools. Thoughtful regulation and cost-reflective utility pricing, they say, offer a practical path to manage the impacts of data centers while preserving economic and technological benefits.