TL:DR

When can a power company take your land for data center infrastructure?When can a power company take your land for data center infrastructure?

The artificial intelligence boom in the United States is being matched by a data center building boom. There are more than 3,000 data centers in the U.S. and another 1,500 in development, according to a Pew Research Center analysis. 

While President Donald Trump has promoted AI advancement, calling it crucial to economic and national security, polling shows that 7 in 10 Americans oppose the construction of AI data centers in their communities, citing higher utility bills, pollution, noise and the loss of green space. These centers, which hold computer servers that process words, images and lines of code for large language models such as ChatGPT, also use high amounts of water and electricity.

There is growing opposition to the infrastructure surrounding them, too, particularly the transmission lines needed to power them, which often must cross land belonging to private citizens.

Where private citizens refuse to sell their land, companies are turning to eminent domain, the government’s inherent power to seize private property without a landowner’s consent. But does a line built to serve a private data center qualify? 

I’m a legal scholar who studies eminent domain issues, and I interpret today’s disputes over seizure of property for the benefit of AI infrastructure as the latest incarnation of a long-standing debate about the limits of taking private property for public use.

Why is expansion needed?Why is expansion needed?

Data centers have massive power needs that can stress electrical grids and threaten their reliability. In 2024 they accounted for more than 4% of the nation’s total electricity use. Demand will grow as more are built. To meet this demand, power companies must build more transmission lines – and acquire land to put them on. 

Don’t let yourself be misled. Understand issues with help from experts

Across the U.S. – in states such as Georgia and Pennsylvania – power companies have looked to eminent domain to facilitate these goals. 

What is eminent domain?What is eminent domain?

Power companies can approach landowners to purchase easements for transmission lines; if landowners refuse, the government might force a sale. 

The government may take private land without consent if the seizure is for “public use” and if the landowner is given “just compensation,” according to the takings clause of the Fifth Amendment of the U.S. Constitution.

While the federal government has the power to initiate eminent domain actions – also called condemnations – most are done by state and local governments.

Governments can also delegate this power to private entities or “common carriers,” such as power and water companies, though every state has its own rules for whether and how these utilities can exercise eminent domain. In Texas, for example, the state Supreme Courthas held that a project must “serve the public” and “cannot be built only for the builder’s exclusive use” in order to qualify as a common carrier.

What is the ‘public use’ standard?What is the ‘public use’ standard?

While property may be taken only for “public use,” the U.S. Supreme Court has interpretedthat requirement permissively. In its 2005 Kelo v. City of New London decision, the court held that economic development qualified, allowing New London, Connecticut, to seize homes for private development around a Pfizer facility. That redevelopment, however, never happened, and Pfizer eventually left New London.

In response to that decision – and the public backlash that followed – 45 states enacted eminent domain reform laws. 

In addition to reform laws, some state supreme courts interpret the eminent domain provisions of their own state constitutions more restrictively. The supreme courts of Michigan, Ohio and Oklahoma have all prohibited seizing private property to give it to another private party purely for economic development.

This means private landowners may have more success challenging condemnation actions under their state constitutions than in federal court. Still, courts typically permit exercise of eminent domain by utilities such as power companies.

Data centers used more than 4% of U.S. electricity in 2024, and demand is rising. Justin Sullivan/Getty Images

What does this mean for data center expansion?What does this mean for data center expansion?

Suits challenging the seizure of property for transmission lines on the grounds of public use have mixed results. 

For example, the supreme courts of South Dakota and Vermont have each affirmed seizures by power companies, determining that providing at least some energy and improved power grid reliability to in-state customers were valid public uses.

But this argument changes if transmission lines, some of which cross state lines, don’t benefit anyone in the state. 

In 1984, for example, the Mississippi Supreme Court rejected a power company’s condemnation action because the transmission line in question would have run from Mississippi into Louisiana without benefiting any Mississippi customers. 

These decisions suggest that as data centers increase energy demand and stress current infrastructure, seizing land to improve power grid reliability will likely qualify as public use, especially if the intention is to secure reliability for in-state customers. 

Still, arguments around whether additional transmission lines actually serve in-state customers may give landowners grounds for a challenge.

• Artificial intelligence (AI)
• Property law
• Property rights
• US Supreme Court
• Electrical grid
• Transmission lines
• Data centers
• Power Utility
• Utilities

 Aaron Walayat, University of Dayton

My Thoughts 💭My Thoughts 💭

Interesting article about private property rights as it pertains to this AI buildout. I know most are upset with New York but that’s the power of states rights! And this article builds upon that.