In February, Denver mayor Mike Johnston announced that the city would pause data-center development. Several states may follow. The move comes amid increasing concerns over the facilities’ energy, water, and land use, plus mounting evidence that data centers boost construction employment temporarily but don’t require very many on-site humans for operation. As policymakers and grassroots organizers figure out what a data-center neighbor means, exactly, faculty and students at Wharton are working to quantify the impact.
Sanya Carley, who leads Penn’s Kleinman Center for Energy Policy and is an affiliated scholar of the Wharton Climate Center, co-wrote a piece last year that encouraged a pumping of the brakes akin to Denver’s: “We’ve done this before. We’ve burdened communities without including them in the decision-making, and now is a time for us to right those wrongs and to be very deliberate about the way we plan and develop this new infrastructure.”
Carley suggests that policymakers carefully consider what to ask of data-center developers. For example, Pennsylvania governor Josh Shapiro has proposed that “data centers pay for or directly supply new power generation, hire local workers, and meet high environmental standards,” she says. “Kansas grants a sales-tax exemption for data centers for both construction and equipment, but that’s only if facilities invest at least $250 million and create at least 20 jobs within two calendar years of opening.”
In her role as vice provost for climate science, policy, and action, Carley is convening scholars from across the university who study AI data centers and impacts. “We still really don’t have a huge grasp in the research community of the impacts on both electricity and water,” she notes.
To that end, Vishrut Rana GRW27, a Wharton doctoral student in operations management, recently began studying how a U.S. data center’s entry into a region impacts the energy ecosystem. “We don’t know the answers with a high degree of confidence, and they would be helpful to not only the data-center industry but also consumers and regulators that are overseeing all of this transition,” Rana says. By late spring, he hopes to have completed his initial analysis of how data centers have impacted consumer electricity rates region by region.
Data centers aren’t solely to blame for rising electricity prices. Utilities are complex, as anyone who has ever tried to interpret an electric bill knows. And as a potential bright side, Carley and Rana both say the data-center boom could increase public awareness about energy use.
“The energy industry has lacked a stakeholder that is ready to foot the bill for the drastic grid improvements that need to happen. Data centers and large tech companies claim they’re ready,” Rana says. In other words, this could be a way to at least partly fund the addition of power lines as well as upgrades necessary to expand capacity and better prepare the grid for input from renewables like solar: “That is perhaps a net win for the entire country.”
Published as “Wharton Studies Data Center Impact” in the Spring/Summer 2026 issue of Wharton Magazine.
