AI Data Centers in New Hampshire: Municipal Blueprint for Permitting, Power, and Local Control

Data centers have existed for decades. I worked at Liberty Mutual. During my time there, it operated multiple data centers, including one in Portsmouth. Amazon’s data centers paid for lots of Virginia’s infrastructure. But these aren’t the kinds of data centers that we’re talking about today.

Today, all the talk is about AI data centers. Hyperscalers like Google, Amazon, Microsoft, Meta, and Oracle are building data centers as fast as they can across the United States. These data centers are enormous, running 100,000 GPUs, each using between 700–1,200 watts of electricity, and some using 5 million gallons of water each day. Unchecked, that obviously ends badly with communities running out of water and consumers paying more for electricity and electronics, like phones and laptops (because manufacturers are competing with hyperscalers for memory). Also, data centers can be loud.

Several or all of the above concerns can be addressed, and some municipalities in the U.S. have already taken steps to close gaps and improve outcomes. I’m not advocating that New Hampshire communities start adding AI data centers, but they could be a good fit for some communities, provided they meet the right criteria. Do I want one in Dover? No. That said, Data centers deliver lots of tax revenue to the municipalities and states in which they operate. That revenue offsets what residents pay in property taxes and rents.

I’m writing this guide because I don’t want any New Hampshire municipality to get locked into a lopsided agreement with a developer that would benefit a hyperscaler more than it would benefit a municipality’s taxpayers. What’s more, data centers have regional impact, so any deal that one community makes can impact surrounding communities.

Understanding Incentives and Scale

The first step to understanding hyperscalers is to understand their incentives and scale. To think of them like a normal business — even enterprises like General Mills and General Motors — is wrong. Alphabet (Google) earned ~$114 billion in revenue in Q4 of 2025 alone. Access to cash, and lots of it, is not the problem. Using the project management triangle as a metaphor — you have time, scope, and cost. Pick two. The answer to “cost” is, “I don’t care.”

The promise of AGI (Artificial General Intelligence: the “singularity”) is driving spending at unseen levels. Even as AI races to the bottom as a commodity service, the demand for compute, and the belief that it’ll be a winner-take-all scenario for the first company to reach AGI, means that the upside for AI is far too great for any hyperscaler to underspend.

So, if access to cash and willingness to invest ridiculous sums of money are not the problem for hyperscalers, what is? They have two: permission to build and rapid access to power. The first is the bigger problem right now. Public sentiment has turned against hyperscalers, and communities want to ban AI data centers. I probably don’t need to tell you why.

The second problem, access to power, isn’t so much a problem when you understand the profit incentives and a given hyperscaler has permission to build. If Eversource or another local utility provider can’t quickly deliver power, the hyperscaler will build its own.

Now we understand the incentives driving the proliferation of AI data centers. We know why hyperscalers have a sense of urgency. We know the barriers are permission and fast access to energy, and we have a high-level grasp of the problems that can create for New Hampshire communities: higher consumer energy costs, water shortages, noise, and pollution. This all gets us to a point where, if a New Hampshire municipality chooses to allow an AI data center, it can extract the taxpayer benefits it would offer while protecting residents from downside risks.

What follows is a blueprint that New Hampshire municipalities can use when engaging in conversations with developers who might want to build a data center in a New Hampshire community.

Permitting

Conditional Use Permitting

Prohibit “by right” automatic approval of high-density or hyperscale data centers in commercial and industrial zones. Require a Conditional Use Permit (RSA 674:21) or Special Exception, ensuring mandatory public notice, planning board hearings, and discretionary municipal approval.

Hyperscale facilities represent low-frequency, high-impact developments that cannot be evaluated under standard zoning rules. The issue isn’t developer intent. It’s an experience deficit on the side of the negotiating municipality. While tech giants negotiate AI data center buildouts nationwide, local planning boards might encounter a proposal of that magnitude once in a generation. Requiring discretionary conditional use permits levels the playing field, giving municipalities the time and authority to thoroughly evaluate edge-case impacts on water, power, and community quality of life.

Conversely, if municipalities cannot leverage conditional use permits — or are legally barred from doing so — they inherit multiple downside risks. Every element of this blueprint relies on that initial regulatory footing. Without RSA 674:21 discretionary oversight, local boards have virtually no leverage to enforce these protections.

“Whole-Project” Scope Rules

Require site plan regulations to mandate that applicants disclose the entire cumulative 5- to 10-year buildout footprint (total megawatt capacity, square footage, water draw, substations, and gas lines). Prevent developers from segmenting projects into smaller “phases” to dodge state energy review thresholds (e.g., the state Site Evaluation Committee’s 30-MW threshold under RSA 162-H.)

Automatic Permit and Construction Standstill

Require an explicit standstill rule: once a site plan review or environmental/infrastructure study is initiated, all site work, land clearing, and piecemeal building permits are legally frozen until the entire review process is complete and approved.

Planning Board Study Trigger

Establish a formal mechanism allowing the Planning Board to mandate extended impact studies (noise, hydrogeology, grid stability) if unaddressed local risks emerge.

Water Resource Protections

Mandatory Closed-Loop Systems

Require all commercial data centers to utilize sealed, air-chilled closed-loop cooling systems. Explicitly prohibit open-loop evaporative cooling towers that draw millions of gallons daily from municipal infrastructure or local aquifers.

Evaporative cooling can use in excess of 5 million gallons each day. To assign some context to that number, the City of Dover pumps about 3 million gallons per day during peak summer months. More than doubling the draw against Dover’s aquifers would obviously be bad.

Closed-loop systems solve this problem. After an initial draw to fill the system — whether that is 5 million gallons or whatever volume the facility requires — the water is continuously recirculated. That is what “closed-loop” means. The data center reuses the same water over and over without making a continuous draw on municipal water sources or local wells.

Newer data centers are increasingly built as closed-loop systems, and some older facilities have been retrofitted to convert to closed-loop cooling. For the compute facility itself, water consumption for cooling is essentially a solved problem — provided that municipalities make closed-loop design a mandatory condition of approval. And they absolutely should.

Hydrogeological Impact Assessments

Require applicants to fund an independent, town-managed hydrogeological study during site plan review to guarantee that initial system fills or emergency backup draws will not lower water tables or deplete surrounding private and municipal wells.

If a municipality mandates a closed-loop cooling system, the data center itself will draw a nominal amount of water day-to-day. Also, while data centers bring high-paying technical jobs, they employ relatively few people on site compared to traditional manufacturing or corporate offices. The domestic water demand from employees is negligible.

The real water risk often shifts from compute operations to on-site power generation. If a developer chooses to generate their own power under New Hampshire’s off-grid frameworks — such as installing natural gas turbines or steam cogeneration systems — those power plants can require massive, ongoing volumes of cooling water. As such, independent, city-managed hydrogeological studies must evaluate the total combined impact of both the facility’s initial fills and any dedicated on-site power generation to ensure neighboring residential wells and municipal aquifers remain fully protected.

Basically, any new data center using a closed-loop system will use very little water to cool the GPUs it’s running, but it can use massive amounts of water to cool the power generation used to run them. Municipalities need to mitigate both of those risks so data centers can build while fully protecting local water supplies.

It works this way: natural gas powers turbines that create electricity, and burning that fuel creates super-hot exhaust air. High-efficiency systems capture that hot exhaust to boil water, creating steam to drive a second turbine. Once that steam spins the turbine, it must be cooled and condensed back into liquid water, a process that traditionally relies on evaporative cooling towers that can consume millions of gallons of groundwater daily.

To protect local aquifers without sacrificing energy efficiency, municipalities can mandate that any on-site steam or cogeneration systems utilize air-cooled condensers (dry cooling) rather than wet evaporative cooling towers. Dry cooling uses large fan arrays to cool the steam closed-loop, allowing thermal energy to be captured and converted to power without draining local wells or municipal infrastructure. It’s more expensive for data centers to operate this way, but water is priceless.

Recycled and Non-Potable Water Mandate

Require any supplementary liquid cooling to rely exclusively on reclaimed municipal wastewater or captured stormwater rather than drinking-grade aquifer water. “Non-potable” water is water that is unsafe to drink.

If a data center wants to use reclaimed water for any phase of its operations, the applicant must bear 100% of the cost to construct the necessary dedicated “purple pipe” infrastructure from the treatment facility to the site. A purple pipe is a color-coded pipe used to identify non-potable or reclaimed water. I’ve been drinking out of one for years, which may explain some things.

Beyond a one-time draw for closed-loop systems, municipalities should never sacrifice drinking-grade groundwater — or spend public tax dollars on dedicated industrial water lines — to supply a high-density data center. Essentially, a municipality might allow a data center to charge its closed-loop system once, but if it needs ongoing volumes of water, it’s going to have to build the infrastructure to get it.

Net-Positive Aquifer Recharge Mandate

Require developers to offset any water drawn for initial filling or periodic maintenance by funding local stormwater infiltration, permeable pavement, or wetland restoration projects at a 1.5:1 ratio (returning 150 gallons to the water table for every 100 gallons drawn).

This is completely achievable. In fact, Meta has successfully recharged aquifers through its sustainability efforts, and its data center in Rosemount, Minnesota, is a prime example of what can happen when a hyperscaler’s incentives align with those of local municipalities.

On the other hand, in late July 2026, Meta pumped the brakes on some of its corporate sustainability goals.

Tim De Chant, writing for TechCrunch, “Meta Drops out of a Major Clean Energy Pact as Its Natural Gas Buildout Accelerates”:

Over the past year, Meta has funded the construction of at least a dozen natural gas power plants, including one project that alone will burn enough natural gas to generate as much electricity as the entire state of South Dakota uses.

Now Meta is no longer part of the RE100, a corporate renewable energy initiative, after a decade of membership, the company confirmed to TechCrunch today. The breakup was mutual, according to a Meta spokesperson.

There is always a gap between what a corporation can do voluntarily and what they will do when timelines or financial pressures change. It’s up to municipalities to bridge that gap through binding local ordinance and protect their residents’ long-term interests.

Grid Protection, Renewable Energy and Solar Mandates

100% Clean Energy for Operations

Mandate that facilities source 100% of their operational energy from new, additional renewable capacity (via direct Power Purchase Agreements or dedicated off-site solar/wind builds) so they do not consume existing clean grid power or drive up wholesale prices for local ratepayers.

Mandatory On-Site Rooftop Solar

Require developers to utilize the facility’s extensive, flat roof footprint for rooftop solar installations (combined with cool/green roof standards) to cover administrative, lighting, and auxiliary facility power demands.

Solar + Battery Microgrids (HB 672 Alignment)

If a developer utilizes New Hampshire’s off-grid framework (HB 672), set zoning standards that prioritize zero-emission solar microgrids paired with Battery Energy Storage Systems (BESS) over fossil-fuel combustion.

Grid Capacity Certification

Require written certification from the serving electric utility (Eversource) demonstrating that the facility’s power draw will not compromise local grid reliability, strain substations, or trigger rate hikes for existing residents.

Peak-Demand Load-Response and Surcharges

Require data center operators to maintain an active demand-response agreement with regional grid managers (ISO New England) to throttle down compute operations or switch to clean backup during peak demand. Enforce a localized Peak Load Impact Surcharge if the facility continues full draw during critical grid strain events.

On-Site Off-Grid Generation and Gas Turbines (HB 672)

New Hampshire House Bill 672 creates a special legal category for private energy providers that generate and sell electricity entirely independent of the state’s public power grid. By exempting these completely “off-grid” facilities from traditional Public Utilities Commission (PUC) oversight, the law makes it faster and easier for energy-intensive industries (like data centers) to build dedicated power sources in the state without putting strain on public infrastructure.

Mandatory Combined Heat and Power (CHP / Cogeneration)

Prohibit simple-cycle gas turbines that vent waste heat into the atmosphere. Require high-efficiency Combined-Cycle or Cogeneration (CHP) systems that capture turbine exhaust to generate secondary electricity or supply thermal energy locally.

Hydrogen-Ready Infrastructure Mandate

Mandate that any on-site gas turbines installed under HB 672 be certified capable of burning a 30% to 100% green hydrogen blend, with a legally binding timeline requiring the facility to transition toward zero-carbon fuels.

Continuous Emissions Monitoring Systems (CEMS)

Require real-time CEMS hardware connected directly to municipal health and environmental portals. Establish strict local limits on nitrogen oxides (NO2) and volatile organic compounds (VOCs), accompanied by automatic financial penalties for threshold breaches.

Pipeline and Fuel Storage Impact Assessment

Require the applicant to fully fund an independent risk assessment and hazard mitigation fund for any high-pressure natural gas pipelines or fuel storage infrastructure brought across town limits.

Backup Power Architecture and Energy Storage

Prohibition of Diesel and On-Site Fuel Oil

Explicitly ban diesel, fuel oil, and heavy fossil-liquid combustion across the entire facility footprint, including both primary operations and emergency backup generation.

Mandatory Zero-Emission Alternatives

Require emergency backup power architecture to rely exclusively on zero-emission systems like Battery Energy Storage Systems (BESS) or green hydrogen fuel cells. Limit combustion alternatives (such as natural gas microturbines) strictly to temporary, conditional phase-out approvals with hard transition deadlines. States are starting to do this already, and this should include limits on “testing” hours as well.

BESS Safety Standards and Setbacks

Enforce strict compliance with National Fire Protection Association (NFPA) 855 standards for thermal runaway containment. Require a minimum 250-foot setback from property lines for any containerized utility-scale battery energy storage system (BESS) arrays.

A 250-foot setback might not be the right amount. It could be even more. It was the consensus number I found when I was researching this article. The important thing to remember is this: there should be a reasonable setback.

Fire Department Equipment and Training Fund

Require developers to fund specialized hazardous materials/battery fire suppression equipment and ongoing annual training for local municipal or volunteer fire departments. Batteries burn… for a long time.

Dealing with battery fires requires specialized equipment. Dealing with large battery fires requires lots of specialized equipment. If a data center or on-site battery storage facility moves into a city or town, the developer — not local taxpayers — should cover the full cost of the specialized gear, thermal imaging technology, foam systems, and recurring HazMat training required to keep local first responders safe.

Site Planning, Noise and Environment

Thermal Co-Location and Waste Heat Recovery

Require applicants to submit a Thermal Utilization Assessment during site plan review. Mandate free or subsidized waste-heat hookups for local municipal buildings, district heating networks, or agricultural operations (e.g., commercial greenhouses or aquaponics facilities).

Data centers release lots of heat that normally gets vented into the air or dissipated through cooling towers. Meanwhile, local entities — like public schools and local farms — spend thousands of dollars every winter on fuel to generate that exact same temperature range. Neighboring properties could connect to and use that otherwise unused heat energy.

Depending on where a data center is built, this could be totally impractical. I included this one because, even though it won’t necessarily be feasible, it might be. It’s something for planning boards to consider. The answer may very well be, “Nope, we can’t do that.”

Strict dBA and dBC Noise Limits

Establish property-line decibel limits (e.g., maximum 55 dBA daytime / 45 dBA nighttime) and enforce a specific low-frequency limit (maximum 50 dBC) to mitigate the continuous low hum produced by HVAC chillers, transformers, and gas turbines.

Standard noise regulations rely on dBA, which measures sound the way the human ear naturally hears it, filtering out very high and very low frequencies. That works fine for everyday noises like traffic or conversations, but it completely misses low-frequency vibrations. That is where dBC comes in. dBC measures all frequencies equally, including the deep, heavy bass and low-frequency hums generated by massive chillers, cooling fans, and gas turbines.

A facility can easily pass a traditional dBA noise test while still emitting a relentless, house-shaking low-frequency hum that drives neighboring residents crazy. Enforcing both limits is the only way to cover the full spectrum of sound.

Gas-powered turbines and other exterior equipment are loud and generate dBC vibrations. I don’t know what the right numbers are for every specific town, but they’re probably not higher than these. The numbers used here come directly from guidelines established by the EPA and WHO.

Enhanced Setbacks and Vegetative Buffers

Enforce a 150- to 300-foot setback from any residential property boundary, combined with a dense, native vegetative buffer to visually screen physical structures, substations, and equipment yards.

Distance alone doesn’t solve every problem, and neither do trees. A setback provides a safety buffer and helps dissipate heat and air noise, while a thick line of year-round evergreen trees blocks the industrial view of massive grey concrete boxes, backup generators, and electrical substations. Combining the two keeps heavy industrial development from looming directly over someone’s backyard.

As I said earlier, I don’t know what the right exact numbers are for every individual parcel. Municipalities should be thinking about this, though.

Architectural Integration Standards

Without clear design standards, a 500,000-square-foot data center is essentially a massive, blank concrete box surrounded by fences and security lighting. Requiring varied exterior materials, architectural paneling, neutral non-reflective colors, and smart roofline breaks helps blend data centers into the existing landscape.

This is self-explanatory, or watch Blade Runner.

Financial Protections

Prohibition of Municipal Tax Abatements and Incentives

Adopt a formal municipal resolution prohibiting the use of tax breaks, tax abatements, or TIF financing for hyperscale datacenters. Mandate that facilities pay full assessed property valuations to maximize community benefit.

Here, I think it’s important to circle back to the beginning of the article. Due to the upsides of AI, hyperscalers already have financial incentive to build. I don’t mean the incentive to build for future demand. I mean the incentive to build, right now, in order to satisfy the demand they have right now. Tax abatements are meant to entice businesses to take a chance on a location they might otherwise skip. When a company already has a driving need to build, tax incentives aren’t necessary. The baseline economics are already doing that work.

Parent-Company Legal and Financial Guarantees

Prohibit developers from signing agreements solely under freshly formed LLC shell entities. Mandate binding legal guarantees directly from the ultimate parent corporate entity to cover all decommissioning costs, tax obligations, environmental remediation, and potential utility liabilities.

It makes sense that New Hampshire cities and towns may want to avoid entering into arrangements with shell entities that only exist on paper and have no real assets. Requiring a Parent Company Guarantee (PCG) protects taxpayer interests by making sure the parent corporation — the entity with actual money and incentive — stands behind the project.

Mandatory Host Community Agreements (HCAs) and CBAs

Require applicants for utility-scale computing facilities to execute a Host Community Agreement (HCA) prior to final site plan approval. The agreement shall be strictly tied to documented off-site impacts identified during site plan review — securing 100% direct developer funding for necessary emergency response equipment, road maintenance, traffic mitigation, utility upgrades, and municipal review expenses.

Let’s say Dover decides to allow a new data center. The project might require new access roads, lighted intersections, or expanded water and sewer lines. The developer must cover 100% of those capital costs because, were it not for the incoming facility, the city would not have to build or upgrade that infrastructure at all.

Impact Fees

While Dover no longer has traditional impact fees, bringing them back or creating a dedicated off-site improvement mechanism through an HCA is necessary for high-intensity compute or utility-scale infrastructure. The edge-case scale of AI data centers makes these mechanisms essential. If a project fails, it’s more than just an empty lot. If a project succeeds without these protections, it could actually be worse for taxpayers. This is all about ensuring the municipality has the resources to properly mitigate downside risks.

Decommissioning and Repurposing Bonds

Require the developer to post an irrevocable decommissioning bond prior to groundbreaking. If the facility is abandoned or sits underutilized for 18 to 24 months, the bond provides guaranteed funds for site remediation, structural demolition, or adaptive conversion of the high-capacity power connection for community solar or light manufacturing.

Someone paid to build the data center. If at some time in the future no one wants to use the property for a data center anymore, someone will have to pay to remove it. That will be super expensive, no one will want to pay for it out of pocket, and the property will just sit blighted when it could otherwise be repurposed.

Municipal Intervention at the NH PUC

Authorize municipal representation to formally intervene in state Public Utilities Commission (PUC) rate cases and ISO New England proceedings to ensure regional grid upgrades driven by the data center are not shifted onto local residential electric bills.

Utility-scale computing facilities draw immense amounts of power, often requiring massive high-voltage transmission and substation upgrades. Without active municipal participation in state PUC dockets, electric utilities routinely absorb those infrastructure costs into their general rate base. Local residents and small businesses wind up subsidizing the developer’s power grid through higher monthly utility bills. Authorizing formal municipal intervention gives the city a seat at the table to enforce a strict “causer pays” standard.

Several New Hampshire municipalities already have active energy commissions that are tuned in to state-level utility developments. All towns have access to the Office of the Consumer Advocate and their respective electric utilities, like Eversource or Unitil. Doing some early fact-finding and engaging in PUC dockets ensures local taxpayers aren’t hit with unexpected cost surges down the road.

Wrapping Up

Zoning for data centers is not a one-size-fits-all approach. I’m certainly not the smartest person in the room, and as I write this, I’m just sitting alone in my office. What I’ve attempted to do here is provide New Hampshire municipalities with some practical things to think about — to help close the experience gap when sitting across the negotiating table from seasoned developers acting on behalf of global hyperscalers.

For any given municipality, several of these provisions may not apply. Treat this document simply as a practical checklist for local boards, planning officials, and community members to evaluate. I wrote this starting with what I knew as someone with a fascination in technology, paired with a lot of questions about how these massive projects impact our towns.

As New Hampshire municipalities continue to grapple with the prospect of data centers in their communities, more concerns are likely to emerge, and state legislation may put some restrictions on how municipalities can manage them (if Conditional Use Permitting is disallowed.) Understand the incentives and scale. Keep your options open, and protect your community’s right to optionality.