AI Data Centers Meet Community Resistance in PA

The artificial intelligence revolution is upon us, and Gov. Josh Shapiro wants Pennsylvania to win. In June, the governor announced Amazon’s $20 billion plan to build data center innovation campuses across the Commonwealth – by far the largest private-sector investment in the state’s history.

But in Luzerne County, many are worried how this fourth industrial revolution will reshape their lives once again. The anthracite coal industry came, scarred the land, and faded rapidly by the 1950s. By the 2000s, deindustrialization and globalization replaced the post-coal, mid-century lifeline of manufacturing jobs with warehouses and logistics companies. And now, in this quarter century, Big Tech and data center developers are chomping at the bit.

The question is whether AI and cloud computing will be an economic boon for northeastern Pennsylvania – or another boom and bust.

The Land of Digital Coal Mines

“Data centers are the thing now,” said John Zola, a small businessman in Sugarloaf Township, a mix of rural communities and suburbia just outside Hazleton. “There's the rush of who's going to get to the treasure chest first.”

Now Big Tech companies are pouring into Pennsylvania to build data centers and get in the AI race. As of June, the Keystone State had the third largest “announced” data center energy demand after Texas and Virginia, according to research consultancy Wood Mackenzie.

And northeastern Pennsylvania – with a nuclear power plant, natural gas resources, and its setting as the crossroads for Interstate 80 and 81 – is ripe for digital coal mines.

Amazon is currently building a data center campus next to the Susquehanna nuclear power plant in Salem Township. John Augustine, whose regional economic development organization Penn’s Northeast helped bring Amazon to the area, said they are working with seven other data centers in Luzerne and Lackawanna counties. “We have interest from the top five [tech companies],” he said, though non-disclosure agreements forbid him from saying which ones. “We expect half of them to come to fruition and to create good-paying jobs, not just in construction but in the data centers themselves.”

Amazon’s $20 billion investment is promised to bring millions of dollars in new tax revenue and create 1,250 “high-paying, high-tech” jobs between its Salem Township project and another data center development in suburban Philadelphia’s Bucks County, according to the governor’s announcement.

That could be, but the economic analyses arriving at these impressive job numbers generally “can lead to massive exaggerations,” explained Sean O’Leary, who investigates such capital-intensive projects for the Ohio Valley River Valley Institute. A Business Insider investigation of data centers around the country found that the largest data centers generally employ fewer than 150 permanent workers, with some as few as 25.

The actual benefit of data centers is their tax dollars, explained Mike Turner, the Ashburn District Supervisor in Northern Virginia’s Loudoun County, the data center capital of the U.S. “We are flush with cash,” he said. Real estate property taxes and business property taxes support roughly $895 million of the area’s $940 million operating budget, allowing them to lower and eliminate various taxes on residents and overflow their rainy-day fund. As a result of data center tax revenue, Turner found Loudoun County has the lowest real estate property tax rate in Northern Virginia -- about 25% lower than their neighbors.

“The biggest risk is power,” Turner noted. “The AI market in data centers are voracious consumers of power.” With 200 data centers and 117 more in the pipeline, Virginia’s utility companies are already having to build more power lines, which will mean passing costs onto customers. A 2024 Virginia audit found that accommodating data centers’ increased energy demand would hike up electricity costs on a typical customer by $14 to $37 per month by 2040. Squeezing data centers into every last tract of land, including next to residential communities, has fueled massive resistance to ban “by-right” data center zoning.

“Pennsylvania is in the envious position that they can plan this all out,” Turner said, “but they need to plan it all out. They need to plan where the power line is going to go, where the generation plants are going to go, and how many data centers they can afford to have.”

PJM, which coordinates electricity transmission for 13 states in the eastern U.S., including Pennsylvania, found that data center load “by itself” increased electricity costs for utilities, and therefore utility customers, by 174.3% – or $9.3 billion in 2025-2026.

The state’s Public Utility Commission held a public hearing in April in which consumer advocates proposed policies to prevent utility companies from socializing the costs of building infrastructure for data centers – like power lines – onto the public.

But data centers and electric utilities are racing ahead, and it’s not by accident. The Shapiro administration is slashing red tape and has given developers the green light so Pennsylvania will move at the “speed of business” and become a global competitor in AI.

In November 2024, the governor launched Pennsylvania’s first-in-the-nation fast-track permitting program with Project Hazelnut, a 1,300-acre data center campus in Hazle Township being developed by Kansas City-based NorthPoint Development.

“We need to move a lot quicker in Pennsylvania to get these projects done. We recognize that time is money, and we recognize that it took too damn long to get projects done in the past,” said Shapiro, lamenting developers of the past who gave up on Pennsylvania due to permitting delays.

“Capital goes where capital is welcome,” said Brian Stahl, the NorthPoint vice president leading Project Hazelnut.

Whereas other companies may seek the governor’s assistance behind the scenes, Ben Kirshner, who developed the PA Fast Track Program in the newly created Office of Transformation and Opportunity, commended NorthPoint for participating and sharing their accelerated permitting timeline through a public dashboard. “They don't have to do it. They want to do it because they want that extra accountability and transparency for the community,” Kirshner told me.

But many residents still have questions as they face the twin threats of data center-driven power lines and eminent domain in Greater Hazleton’s Conyngham Valley, an Eden of rolling hills and rural townships that has largely been spared from industrial eyesores – until now.

The Valley Fights Back

“This is God’s country,” said Mary Ann Rizzo Bailey, who grew up on the family farm in Black Creek Township. “Mom used to say keep it that way.”

Now PPL, the $25 billion power utility company that covers northeastern Pennsylvania, is looking to build at least two sets of 100-240 feet-high 500 KV power lines through the Conyngham Valley to keep up with future energy demand as data center developments proliferate in Luzerne County.

Brenda Rizzo, Bailey’s sister-in-law who lives on the farm with her camel Humphrey Bogart, said she cried when land agents first called and said they’d have to condemn the land if she didn’t sell to allow a right-of-way for their planned power lines.

“I promised my husband, when he died, I would never sell the farm,” Rizzo said, refusing to even consider the idea because the land agents would not explain what the power lines were for. They called her 11 times, which she’s documented in a notebook. When surveyors drove to the property, the spunky retired schoolteacher warned them, “I have a .357 and a backhoe.”

“I feel like David going up against Goliath,” Rizzo said.

If they had any support before, PPL has turned many residents in the Conyngham Valley against data centers.

In the Valley’s Sugarloaf Township, Zola started The Alliance to Stop the Line, which has garnered over 2,300 followers on Facebook and 1,600 signatures on its petition, after land agents threatened eminent domain if he did not extend the utility’s existing right-of-way on his family compound, where he lives with his three adult children and their young families.

Residents respond to the proposed power lines in the Conyngham Valley. Photo courtesy of author. 

“This was a bit of paradise with our family. And you’re turning this into an industrial corridor,” Zola’s son-in-law Rich Caputo said, as he flew a drone into the sky to show how high the proposed monopoles could go. “I have two kids who are going to be living next to monstrosities,” Caputo said, as his boys, ages 6 and 9, played in the pool, yards away from where he expects bulldozers, cranes, and excavators to roll through if PPL gets its way. “If it happens, I don’t know if we can stay here.” They moved into their new home less than three years ago.

“I haven’t had one person reach out to me, not one, in support of these data centers and this powerline project. I’ve had hundreds reach out to me in opposition,” said state Rep. Jamie Walsh, who represents the townships in the path of the proposed power lines. “They don’t want their properties being devalued and destroyed. These people have built their entire lives there.”

“I Feel Like David Going Up Against Goliath.”

It’s not like the people of Luzerne County hate economic development.

“This area went through great strides to develop and encourage industry to come in,” said Pat Pecora, a retired psychiatric social worker who’s lived in the Conyngham Valley all his life. His father was involved in grassroots-driven, innovative economic-development efforts to create manufacturing jobs in the mid-1950s, when back-to-back hurricanes flooded the Hazleton area’s local mines, hastening the collapse of the declining coal industry and leading to mass unemployment. At the time, locals made small donations and residents taped dimes along downtown Hazleton’s Broad Street to raise money for industrial parks that they hoped would attract developers.

But data centers aren’t the economic development of Luzerne County’s forebears. “AI is going to make it possible to eliminate jobs by robotics, and we’re going to have all this industry but fewer jobs,” worried Pecora.

Like many elected officials, state Rep. Walsh is for economic development, but “it also needs to be what the community wants, and that is not what's taking place right now.”

“This isn’t communist China. This is America. A utility company should never have this power. The government needs to rein in PPL,” Zola said, wanting to know why PPL couldn’t just build the new poles where there are already existing lines, or right next to the nuclear power plant like Amazon.

PPL spokesperson Dana Burns told me this “was determined to be the most viable route that would cause the least impact to the environment and community while still delivering reliable power to the region.”

The company refused to share the customers of these power lines. Neither Brian Stahl nor Tom Williams of NorthPoint even agreed to an interview for this story. But in a March 11 hearing before the Luzerne County Council, they revealed their “partnership” with PPL to ensure the grid can meet power demand.

John Zola, founder of The Alliance to Stop the Line, showing the author where the power lines would run through his property. Photo courtesty of author.

Zola isn’t going down without a fight. A man of means with time on his hands, he’s hired attorneys and is lobbying elected officials. Both Sugarloaf and Black Creek Townships have now passed resolutions opposing PPL’s power line expansion, and a state bill that some feared would override local control over electricity projects has since been tabled.

“It seems all of a sudden we are being infiltrated with these data centers,” state Rep. Walsh said, pointing out that there’s a proposed data center development in Dorrance Township in northern Luzerne County. “Nobody even knows how they're going to get power to the Dorrance one,” he said. “It seems like it’s being rushed. There are other alternatives to use for this PPL line, and they’re not even open to it.”

John Lombardo, the chair of Luzerne County Council, does not want power lines to be the death knell of Project Hazelnut, which NorthPoint promises to bring 900 permanent jobs and $14.6 million in county taxes over the next 20 years.

Development “brings tax revenue to our county, to our school district, to our individual municipalities,” said Lombardo, especially when land in Luzerne County scarred by coal mining is “collecting minimal tax revenue” and “sitting basically dormant.”

Just as the state’s fast-track permitting program makes Pennsylvania more competitive for development compared to other states, the county council negotiated a partial 10-year LERTA tax break to redevelop the land for cheap and compete with neighboring counties eager to snatch up developers.

“We need to make sure that we put as many incentives on the table as possible,” said Augustine of Penn’s Northeast, so that developers “come in and build and spend millions of dollars on speculative development to attract new businesses.”

Harry Haas, the only council member who voted against the tax abatement, called it “corporate welfare.” Just as warehouses flooded into Luzerne County, so will data centers, he said, noting Project Hazelnut already has numerous tech suitors and suspects Amazon will be the winner. “The spirit of the law is to spur development, but if they’re building it anyway, it’s giving money away.”

But PPL’s proposed power line project turned some heads on Luzerne County Council who supported Project Hazelnut.

“They got this tax break, and I am glad it is a data center that is bringing better jobs, but this line was not part of the discussion,” said county councilmember Joanna Smith. “I feel like we negotiated in good faith and now they’re taking advantage of it.” She added, “It opens up everything now for questioning.”

“The only thing that's ruling these developments, it's just big money, and it's bigger money than we've ever seen before,” Rep. Walsh said.

Just like coal, data centers may come and go as technology advances, but consumers could be left footing the bill for transmission lines and other infrastructure costs long after the tech companies pull out, warned Turner from Northern Virginia.

“Local jurisdictions can easily get trampled in this process by the big elephants in the room and the power companies,” said Turner, who is preparing to propose a state law that would allow local jurisdictions to block data centers and other high-energy users if the power grid is already constrained.

“The data centers have more money than God,” he said, “but they can trash your quality of life.”

Ethan Dodd is a journalist based in the Washington, D.C. area who writes at the intersection of business, economics, and politics. He studied the political economy of American deindustrialization at Yale, covered the 2024 election in Pittsburgh, and has written for magazines including The Free Press, Washington Monthly, Commonplace, and The Economist. Follow him on X: @ethandasaxman.