Week in Review: Kentucky Bans Data Centers for Good, a Virginia Farmer Loses His Land, and the EPA Moves to Cut the Public Out of Air Permits

Welcome back to the GridWatch AI Week in Review — our Sunday roundup of the most important data center stories from the past seven days, what they mean for communities, and what you can learn from each one.

1. Woodford County, Kentucky becomes the first county in the state to permanently ban data centers

What happened: The Woodford County Fiscal Court voted unanimously on Tuesday, September 8 to ban data centers, along with landfills and large-scale battery storage systems, countywide, according to the Kentucky Lantern and WKYT. The fiscal court worked with the city councils of Versailles and Midway — the county's two incorporated cities — to pass matching ordinances, so the ban is not limited to unincorporated land the way many county-level actions are. Judge-Executive James Kay told the Lantern: "The future of Woodford County's economy is not industry and data centers. The future is farming." WKYT had reported the fiscal court's first move toward the ban back in June; Tuesday's vote made it final.

Why it matters: This is a permanent zoning prohibition, not a pause — Kentucky's first. Most of the moratorium rows on our own tracker are time-limited by design, bought to write rules before an application arrives. Woodford County skipped that step and went straight to "not allowed here," citing farmland preservation rather than any specific pending project.

What to learn — a county ban only holds if its cities pass one too: A board of county commissioners or a fiscal court almost never has zoning authority inside an incorporated city sitting inside the county — that city has its own council and its own zoning map. If your county passes a countywide-sounding ban, ask directly whether it covers incorporated cities or only unincorporated land; if it's the latter, a developer can simply target land inside city limits instead. Woodford County closed that door by getting Versailles and Midway to act at the same time. See Kentucky's row on our moratorium tracker and the Kentucky state page.

Sources: Kentucky Lantern, Sep 10; WKYT, Sep 9; WEKU, Sep 11

2. Chatham County, Georgia pauses data centers 10 megawatts and up for 155 days — closing a loophole for repurposed warehouses

What happened: The Chatham County Board of Commissioners voted Friday, September 11 to impose a 155-day moratorium on new data center development of 10 megawatts or larger in unincorporated parts of the county, and on converting existing warehouses or industrial buildings to data-center use, according to The Current and WSAV-TV. Commissioner Dean Kicklighter had proposed a full year; the county attorney recommended the shorter window instead. The pause is meant to give staff time to study the impact on public resources before any application is decided, and commissioners floated extending restrictions to smaller "micro" data centers later.

Why it matters: Chatham is now the third Coastal Georgia government to act, after Savannah's own 155-day moratorium in late August (which we covered two weeks ago) and pauses in Garden City and Bloomingdale — but those are separate city governments inside the same county, each with its own zoning map. Chatham's new ordinance only reaches the unincorporated county; land already inside Savannah, Garden City or Bloomingdale answers to that city's own rules, not this one.

What to learn — a size threshold and a conversion clause are both doing real work: Writing the pause to cover "10 MW and up" keeps it from sweeping in a small server closet, but it also means anything proposed at 9.9 MW falls outside it entirely — worth watching whether an applicant resizes a project to duck the line. The conversion clause matters just as much: without it, a developer could buy an existing warehouse already zoned for industrial use and skip site-plan review altogether. If your own county's moratorium doesn't name a size threshold or say anything about converted buildings, ask why not before you assume it covers everything. See our Georgia state page for the rest of this year's coastal moratorium wave.

Sources: The Current, Sep 11; WSAV-TV, Sep 12; WTOC, Aug 28

3. A Virginia judge upholds a county's eminent-domain taking of a farmer's land for a water project residents call a data-center pipeline in disguise

What happened: Caroline Circuit Court Judge Dennis Hupp ruled against farmer Cory Garrett's bid to invalidate Caroline County's 2024 taking of 11 acres of his Tidewater Trail land for a planned water-intake and treatment facility on the Rappahannock River, according to the Fredericksburg Free Press, which first reported the ruling September 3; the case drew renewed national coverage this week from The Cool Down and The Nerd Stash. Garrett's attorney argued the 2024 taking was premature because the county had not yet secured its state withdrawal permits; Hupp disagreed, writing that "the construction and operation of a water intake and treatment facility supplying water to the general public is a public use." The county's original 2024 offer for the land was $78,400.

Why it matters: The county's permit history is the part residents keep pointing to. Caroline's 2024 state withdrawal application originally sought 13.9 million gallons a day and included language about "industrial cooling" — language the county removed before lowering the request to 9 million gallons a day later that year, even though local zoning already bars data centers from using potable water for cooling. Virginia's DEQ approved the withdrawal permit in late 2025, and the Virginia Marine Resources Commission voted 8–0 in June 2026 to approve construction on the land already taken from Garrett. The Rappahannock Tribe is separately appealing DEQ's permit approval in a case a judge has allowed to proceed.

What to learn — read what got removed from a permit application, not just what's currently in it: A county can drop a phrase like "industrial cooling" from a filing without changing the pipeline's route, capacity, or ultimate customers. If a public water project near you once mentioned an industrial use and later doesn't, ask your utility directly who the customers of that new capacity will actually be — the disclosure history is public record even after the wording changes. And once land has been taken under eminent domain for a declared "public use," courts have set a high bar for reversing it later; the fight to prevent a taking is almost always more winnable before it happens than after. See our breakdown of how these numbers work in The Hidden Water Cost of Your AI Prompt and Virginia's entries on the moratorium tracker.

Sources: Fredericksburg Free Press, Sep 3; The Cool Down, Sep 11; The Nerd Stash, Sep 12

4. The EPA moves to drop the federal floor requiring public notice before many data-center generator permits

What happened: Capital B News reported this week on an EPA proposal, published July 7 and now past its public comment period, that would eliminate the federal requirement in 40 CFR 51.161 that states give the public notice and at least 30 days to comment before approving many "minor source" air permits — the category that covers the diesel generators and gas turbines used as backup and behind-the-meter power at data centers, along with landfills, asphalt plants and factories, according to Federal News Network, which first reported it in early September. The comment period on the proposal closed August 21; nearly 200 advocacy groups and more than a dozen states have formally objected. EPA is expected to finalize the rule next year.

Why it matters: Data centers are usually permitted as "minor" sources under the Clean Air Act because their individual generators fall below major-source emissions thresholds, even when a site runs dozens of them at once. That makes this specific federal requirement — not the more familiar major-source review most people picture — the actual public comment window most data-center generator permits go through today. Cutting the federal floor wouldn't ban states from keeping their own notice-and-comment rules, but it would let states that don't have an independent statutory requirement drop the practice entirely.

What to learn — check whether your state's comment right survives on its own, not just because of federal law: Some states have their own public-participation statutes for air permits that exist independently of the federal minimum EPA is proposing to remove; others rely entirely on the federal requirement and would lose the practice the day it disappears. Ask your state environmental agency, in writing, whether its own law requires public notice and comment for minor-source permits regardless of what EPA does. The story right below is exactly what this comment window is supposed to catch.

Sources: Capital B News, Sep 10; Federal News Network, Sep 4; Salt Lake Tribune, Aug 26

5. A Microsoft-tied New Jersey data center was running 45 generators with no air permit at all — the thing we flagged two weeks ago

What happened: A Floodlight investigation published August 27 used thermal drone footage to show the DataOne USA data center under construction in Vineland, New Jersey running at least 45 of its 62 on-site generators, even though the New Jersey Department of Environmental Protection says it has issued no air permits — and has none under review — for generators at the site. NJDEP observed the generators during a July 29 site inspection and had not made a compliance determination as of this week's renewed coverage from Community News and Latitude Media. The site is being built for DataOne to supply Nebius, which holds a roughly $17 billion, five-year contract to provide Microsoft with GPU capacity there — the same project on our own Vineland community page — and sits about a mile from two schools. Former EPA air enforcement chief Bruce Buckheit told Floodlight that federal and state law require a final permit before generators are even brought onsite, let alone switched on, and that "one might be seeing administrative enforcement action" soon.

Why it matters: We flagged this exact site as one to watch in our August 30 roundup, when the allegations first surfaced. This week's reporting confirms the specifics: not an incomplete permit or a paperwork lag, but generators already running with no application even filed. It's a live example of what the EPA's proposed comment-period rollback in the story above is actually deciding the fate of.

What to learn — equipment can arrive and start running before the permit paperwork does; ask directly, don't wait for a notice: If a data center under construction near you already has visible generators or turbines on site, you don't need to wait for a public notice to find out whether they're permitted — call or email your state environmental agency's air permitting office and ask whether an air permit has been issued or applied for at that specific address. That question is public record whether or not a comment period is open.

Sources: Floodlight, Aug 27; Latitude Media, Aug 31; Community News, Sep 12

6. More than ten states start ripping up the tax breaks they gave data centers

What happened: The Wall Street Journal reported this week that more than ten states have paused, frozen or moved to cancel data-center tax exemptions they previously granted, as summarized by Daily Signal and Quartz. Texas Gov. Greg Abbott and Pennsylvania Gov. Josh Shapiro have each taken steps to pause or restrict new development; legislators or governors in Illinois, New Jersey, Washington and others have moved to curb their own incentives; and Ohio Gov. Mike DeWine froze new applications outright, with some state legislators pushing to repeal the tax break entirely and reopen existing agreements with Amazon, Meta and Google. Ohio's exemption cost the state more than $1.5 billion in 2025 — over ten times its original estimate, per the Journal's reporting.

Why it matters: These exemptions were sold to legislatures as a low-cost way to attract investment; Ohio's actual cost coming in ten times over the original estimate is the number driving most of this reversal nationally, not water or noise complaints alone. Reopening a benefit already granted to a built facility is a much harder legal fight than freezing new applications — most of the actions reported this week are the latter, not the former.

What to learn — ask whether your state's data-center tax break has a clawback, and whether it's ever been used: A tax exemption granted by statute or by a negotiated development agreement usually specifies, in writing, whether the state can revoke or recapture it and under what conditions — job-count minimums, investment thresholds, a sunset date. Pull that document (or ask your state's economic development agency for it) before assuming a deal already signed in your community can simply be undone by statute — that is exactly the harder fight some Ohio legislators are now attempting, distinct from the new-application freezes most other states have managed so far. Our model CBA clause library includes language communities have used to write clawbacks into the agreement from the start, rather than fighting to add one after the fact.

Sources: Wall Street Journal, Sep 9; Daily Signal, Sep 9; Quartz, Sep 9

What to watch next week

• Vineland, NJ — whether NJDEP issues a compliance determination or enforcement action against DataOne over the unpermitted generators
• EPA's minor-source permit rule — any signal on when the agency moves toward finalizing it, given opposition from nearly 200 groups and a dozen- plus states
• Caroline County, VA — whether Cory Garrett appeals Judge Hupp's ruling, and the status of the Rappahannock Tribe's separate appeal of the DEQ withdrawal permit
• Chatham County, GA — what the 155-day study finds, and whether commissioners extend restrictions to smaller "micro" data centers
• Ohio — whether legislators succeed in reopening tax agreements already signed with Amazon, Meta and Google, not just freezing new applications

Every Sunday we cover the week's most important data center stories, explain the underlying concepts, and point you to the tools you need. Know a story we should cover? Reach out at hello@aigridwatch.com or sign up for the newsletter below.