Anchorage Assembly moves to regulate data centers

By SUZANNE DOWNING

Feb. 28, 2026 – Two Anchorage Assembly members are proposing new land use regulations for data centers, a move that comes as Gov. Mike Dunleavy continues promoting Alaska as a potential destination for high-tech infrastructure and energy-intensive industries.

Assembly Vice Chair Anna Brawley introduced AO 2026-27, an ordinance designed to clarify how large-scale data centers would be regulated in the Municipality of Anchorage, including Eagle River and Girdwood. Assembly Member Daniel Volland signed on as co-sponsor.

“Across the country, communities are responding to the development of large-scale data centers to drive economic activity and support growing computing needs,” Brawley said. “Those projects often bring significant community impacts, from operational noise to very high demand on public water, wastewater and electrical utilities.”

Data centers are currently undefined in Anchorage municipal code. They are most closely aligned with “data processing facilities,” which are allowed in commercial and industrial zones. The proposed ordinance would create a formal land use definition for “data center,” limit such facilities to commercial and industrial zones, and require a conditional use permit rather than automatic approval. The measure would also require coordination with public utilities and subject proposals to a more robust public review process.

Volland said the ordinance aims to balance economic opportunity with public interest. “Amid concerns about Railbelt energy shortages and rising utility costs, it’s exciting to imagine the potential economic benefits innovative projects could create for Alaska,” he said. “Those benefits don’t come without a cost to our community. Now is the time to establish a proactive regulatory framework that balances public interests with evolving industry needs.”

The Anchorage proposal comes as data center construction has accelerated nationwide, largely driven by artificial intelligence, cloud computing, and other data-intensive technologies. While often promoted as economic development engines, large-scale data centers (sometimes referred to as hyperscale campuses) have generated opposition in several states.

In other parts of the country, people have raised concerns about the enormous electricity demands of such facilities, which can consume as much power as tens of thousands of homes. In some regions, that demand has strained local grids, contributed to higher utility rates, and required additional generation capacity. In Alaska, where Railbelt energy supply has been the subject of ongoing debate amid declining Cook Inlet gas production, large new industrial loads would likely draw scrutiny.

Water use is another issue cited elsewhere. Many data centers rely on water-based cooling systems, and in some communities consumption has reached millions of gallons per day. While cooling is not a big concern in Alaska and Anchorage is not facing drought conditions, any substantial industrial water draw might require careful planning and coordination.

Residents in some Lower 48 communities have also complained about constant operational noise from cooling systems and periodic emissions from diesel backup generators. Construction of large facilities can take years and significantly alter surrounding landscapes, particularly in areas near residential neighborhoods.

So far, no major hyperscale data center project has been publicly proposed within Anchorage city limits. The ordinance appears to be a proactive effort to get regulations in place before a project materializes.

A public hearing on AO 2026-27 is scheduled for March 3 during the regular meeting of the Assembly, at the Loussac Library Assembly Chambers. The meeting begins at 5 pm. Residents may testify in person, by phone, or in writing through the Assembly’s website. Here is the meeting agenda and information.