2026 - Data Centers & the Threat to Rural Indiana
Data centers are creating significant debate in our communities. Lawmakers at the state and local levels are looking to attract them as a means of generating revenue for local government. However, there are significant issues their installation pose which we must address.
Data centers have become very tempting to local governments. The 2025 Property Tax law (SEA1) severely cut expected property tax revenue, and now local governments are looking for money anywhere to make up for that loss. The data centers are dangling big dollars in front of local governments’ eyes (although a pittance of what will be needed), and they are reaching for it like starving children. They make that Faustian deal with the devil without regard to the people’s souls in exchange.
The problems with data centers are complex.
First, people who are selling data centers to local government and voters are promising vast numbers of high paying jobs from the data centers. The thing is that the high paying jobs will be during the construction phase only. After construction, there will be a handful of maintenance workers who will have permanent jobs. Server hardware techs who come onsite to repair the servers (this is much rarer today with solid state drives and fewer moving parts) normally earn around $40,000 per year. The high paying jobs promised will be literally anywhere on the planet where there is great broadband internet connection (via fiber optic lines) as server maintenance happens remotely. Many server admin jobs will be in India and China. “Vast numbers” of permanent local jobs is a lie.
Then we have a huge water problem. The processors of all these servers will be producing enormous amounts of heat which requires cooling before their circuitry melts down. This will be done with water cooling as air cooling is not adequate. European data centers have “closed loop” coolant systems where the coolant water runs through a water chiller plant to cool the water removing heat from the servers and then returning in a cycle. This is like the radiator in your car or your central air conditioning (which uses refrigerant). To attract data centers to Indiana, neither the federal nor state government has opted to require closed loop systems. They are afraid the extra construction costs will deter them from building here.
Instead of closed loop systems, most data centers locating in Indiana are pulling their coolant water directly from the aquifers or city water supplies. This will be millions of gallons daily. Amazon has the largest data center in the US in New Carlisle, Indiana. It uses 3 MILLION GALLONS of water from the Kankakee aquifer DAILY. The surrounding streams, ponds, and wells are beginning to go dry. If we regulate data centers and require them to install closed loop water systems, this would create MORE construction jobs for the HVAC and plumbing industry by installing the water chiller plants needed to process coolant water.
Finally, we have the biggest issue data centers pose, electrical usage. Already data centers are using 50% of all power consumed in Indiana. We have barely begun building them. We are projecting that within a decade, we will increase the amount of power needed by TEN TIMES. All that growth is due to data center needs. That Amazon data center mentioned above in New Carlisle uses the power of 1.6 million households, the same amount as 60% of Indiana’s 2.6 million households.
As with any other commodity, when supply does not keep up with demand, selling prices rise. This is partially why our electric bills have skyrocketed this year. Electric companies have, with state approval, raised rates to spread the cost of grid expansion to consumers. The state has exempted data centers from paying state sales taxes on electricity, costing millions in revenue. And that extra amount that consumers are paying will be increasing the electrical grid. The cost of making more electricity available will come to us, the consumer, rather than the entities driving that increased demand, the data centers.
How will we produce that much power? We have been installing controversial wind and solar farms across the state, but this additional power is not able to keep up with the new demand. Inefficient and obsolete coal plants which were shuttered are planned for recommission in the near future. And worse (to be covered in a separate fact sheet), there is a new proposal to bring ill-conceived small nuclear power plants (SMRs) to our cornfields, further depleting our water supplies among other terrible consequences.
To sum up, data centers are coming to Indiana because our legislature has created a situation making it very economically attractive for them to come here. The tax abatements and lack of regulation on how they are to be built are bringing them here in droves. As laws are currently written, they will suck our wells dry and force our people to pay for the upgrades to the electric grid. The legislature has been unwilling to force regulations protecting the people for fear of data centers locating elsewhere. Further, with their ill-conceived property tax law from 2025, the legislature has made it so that local governments will not be able to resist making the deal with the devil to sell our communities out so they can continue to afford basic services. We must change the laws to force regulation on data centers locating in Indiana so that people still have water and can afford their electric bills.
