The DC Pipeline State Risk Ratings - Inaugural Edition

For twenty-three issues, this newsletter has documented the same transformation from fifty different angles: the rules governing American data center development are being rewritten in every jurisdiction, simultaneously, at different speeds, in different directions.

Virginia invented a consumption tax. New York froze the front door by executive order. New Jersey locked in decade-long cost floors. Ohio's ballot measure died; it's coming back. Pennsylvania delegated its decision to a governor's race. Arizona and Illinois froze their incentives. New Hampshire legalized the off-grid data center. A hundred-plus municipalities passed their own pauses. And the largest grid in America hit its price cap three auctions running.

A law firm put it best, in the DLA Piper framing we quoted two issues ago: "Regulatory uniformity is gone. Data center siting now requires evaluating legislative stability, community sentiment, and regulatory readiness alongside power availability."

That evaluation now has to happen state by state, deal by deal, and as far as we can tell, nobody has published a systematic way to do it.

So we built one.

Today, The DC Pipeline launches the State Risk Ratings, the first published rating system for data center development risk across American states. Eighteen states rated in this inaugural edition. Updated quarterly. Upgrades and downgrades announced as they happen.

This is not a stunt. It's the reference layer this industry is missing, and it's built entirely on the documented record: enacted statutes, executive orders, signed budgets, court outcomes, auction results, votes taken, and formal public actions. Where the evidence is thin, we rate fewer states rather than guess.

Here's the system. Then the ratings.

Every rated state is assessed across five dimensions, each drawn from the coverage this newsletter has published since February:

1. Regulatory posture. What binding rules exist right now, moratoriums, taxes, cost-allocation statutes, disclosure requirements, and what's pending?

2. Grid reality. Interconnection timelines, capacity market exposure, reserve margins, and utility posture. A friendly legislature can't overcome a seven-year queue.

3. Political stability. Is the framework settled, or an open fight? A state with tough-but-fixed rules can be lower risk than a state with generous rules under active attack.

4. Community climate. Moratorium density, opposition professionalization, litigation activity, and documented flashpoints.

5. Incentive durability. Is the subsidy structure safe, conditioned, shrinking, or dying?

States land in one of five tiers:

Two honest limits before the ratings. First, these are development risk ratings, the risk that a new project faces delay, repricing, or denial. They are not measures of market attractiveness; a Frozen state can still be a great long-term market. Second, tiers move on documented actions, not sentiment. A rating changes when a bill passes, an order signs, a court rules, or a vote counts, not when a headline scares someone.

NEW YORK - Frozen (50 MW+) The only state in America with a statewide pause in effect: Governor Hochul's July 14 executive order halts state environmental permits for new data centers at 50 MW and above for up to one year while a Generic Environmental Impact Statement is developed. The legislature's harsher 20 MW statutory version remains unsigned on the table, a loaded weapon that could replace the EO at any time. Local governments are stacking their own pauses on top (Brookhaven's 18-month moratorium landed after the EO). The nuance most coverage misses: the sub-50 MW lane is open, local approvals are expressly untouched, and the 48 projects totaling ~12 GW already in the NYISO queue keep advancing through study. What changes this rating: the GEIS completing, the EO lapsing or being amended, Hochul acting on the statutory bill, or the November election changing the calculus.

TEXAS - Build (on downgrade watch) Still the deepest pipeline in America, 546 operating data centers and a project queue measured in the tens of gigawatts, with an incentive structure intact and a state government that has repeatedly sided with development. When Hill County passed a moratorium in May, a developer lawsuit forced its rescission within a month; the county replaced it with a review checklist. That's the Texas pattern: local friction rises, state-level structure holds. But the watch flags are real: El Paso's new Data Center Policy Framework requires hyperscale projects to undergo enhanced review, meet stricter environmental standards, and, for the first time anywhere, forgo local economic incentives entirely, in the same city where Meta is investing $10 billion. Grimes County's hearings on the SpaceX/xAI facility continue, and the state's estimated $1 billion in annual data center tax expenditure is starting to draw the same scrutiny that consumed Virginia. What changes this rating: the El Paso zero-incentive model spreading to a second major Texas city, or a statewide incentive review gaining traction in the next legislative session.

LOUISIANA - Build (transparency risk flagged) The most developer-friendly major state in the country right now. Meta's $27 billion Hyperion campus is proceeding on 2,250 acres with full state support. The flag: Louisiana officials have relied heavily on non-disclosure agreements, including one the governor personally signed with Meta, to shield project details from public view. Issue #17 documented what the NDA playbook eventually produces: an information vacuum, then organized opposition, then political crisis. Louisiana is running the exact pattern that preceded backlash in Wisconsin, Michigan, and Arizona. The buildout is smooth today; the model it's built on has failed everywhere it's been tested at scale. What changes this rating: a first major community fight or NDA controversy breaking into state politics.

NEW HAMPSHIRE - Build The smallest market on this list and the most strategically interesting. New Hampshire's off-grid electricity providers law, enacted this summer, makes it the first state to explicitly legalize the self-supplied, grid-independent data center. As New York pushes developers toward self-generation by mandate and the PJM queue pushes them there by delay, New Hampshire built the legal on-ramp on purpose. Tiny pipeline today; first-mover positioning for the behind-the-meter era that every other trend in this industry is accelerating. What changes this rating: honestly, little downside risk, the question is whether the bet attracts actual projects.

VIRGINIA - Build with Conditions The data center capital of the world is no longer top-tier, and that's not a criticism of Virginia so much as a description of physics and politics. The good news: the June 30 budget settled the rules for two years. The sales tax exemption survives; in exchange, the industry pays a first-in-the-nation consumption tax of $0.011/kWh (capped at $600M/year, expiring mid-2028). Costs are now known and priceable, the definition of this tier. The constraints: interconnection timelines up to seven years, the Dominion zone clearing at the top of PJM's capacity market, Prince William County courts invalidating approvals on procedural grounds, and a December 15 Joint Subcommittee report that formally schedules the exemption rematch. What changes this rating: the December report recommending repeal (downgrade to Contested), or meaningful interconnection reform (upgrade pressure).

NEW JERSEY - Build with Conditions The Fair Share Act, signed July 7, is the most underrated statute in the country: facilities at 50 MW+ must commit to paying at least 85% of projected power costs for a full decade. That's a real cost, and it's also the tier-defining virtue: it's known. No moratorium, no pause, no ballot measure, a durable, litigated-ready statute that tells developers exactly what the state costs. Lenders can underwrite certainty; they can't underwrite Pennsylvania. What changes this rating: implementation rules that surprise in either direction.

IOWA - Build with Conditions (the model state) The Cedar Rapids playbook (Issue #18) remains the national proof-of-concept: $2.3 billion in combined Google and QTS investment, closed transparently, with performance-tied abatements, $24 million in enforceable community fund commitments, water-free cooling requirements, and zero NDAs, and zero lawsuits. Dubuque County currently has a moratorium in effect while it drafts formal rules, which is not a red flag; it's the system working, pause, write standards, proceed. Iowa demonstrates the equilibrium the whole country is groping toward. What changes this rating: nothing visible on the horizon. This is what stable looks like.

PENNSYLVANIA - Contested (the highest-stakes rating on this list) Everything documented in Issue #23: $90B+ in announced projects, $20B from Amazon alone, 64% public concern, a legislature that passed only a disclosure requirement out of a full stack of bills, SB 1345 (state-authorized 18-month municipal moratoriums) advancing 13-4 with Republican sponsorship, a three-year statewide moratorium bill in drafting, and a governor's race in November that functions as a statewide referendum, Shapiro's conditioned-build GRID model versus Garrity's subsidy-rollback populism. The variance is enormous: within twelve months Pennsylvania could be the most attractive conditioned-build state in America or the site of the country's most aggressive rollback. What changes this rating: the November election, SB 1345's floor vote, or the Muth bill's fate. Expect this rating to move by Q1 2027.

OHIO - Contested The ballot measure died at the signature stage, 70,000 of 413,488, but the signatures don't expire and the campaign says it's coming back in 2027. Meanwhile HB 646 (cutting new sales tax breaks from 100% to 50%) is live, the House unanimously passed a study commission, a dozen-plus cities hold local moratoriums, Sunbury froze a $2B Amazon project, and Akron just added a mandatory two-step review for all data center proposals. Roughly 200 existing data centers make Ohio a top-six state, with its entire incentive and regulatory framework genuinely in play. What changes this rating: HB 646's fate, and whether the 2027 ballot campaign attracts professional funding (Issue #21's open question).

GEORGIA - Contested The most two-directional state in America. Against development: the Senate is weighing a one-year statewide moratorium paired with an NDA ban for local officials; the state estimates $2.5 billion a year in data center tax break losses; SELC litigation is active across multiple counties; Bulloch County is converting its moratorium into an outright ban; and Morgan County's brown water remains the national symbol of construction externalities, with the EPA's pledged review still open. For development: Georgia Power keeps signing loads, and Columbia County is holding a November referendum on a structure where two massive Google complexes could eventually eliminate homestead property taxes for residents, the single most pro-data-center ballot framing anywhere in the country. Both futures are live. What changes this rating: the Senate moratorium bill, the Columbia County referendum, and any EPA findings on Morgan County.

WISCONSIN - Contested The 70% cost-outweigh-benefits Marquette poll is the worst statewide public opinion number documented anywhere. Janesville holds a voter approval referendum in November, the first time a specific project's fate goes directly to a city's voters. The NDA disclosure bill remains stalled between a GOP caucus worried about competitiveness and Democrats wanting more; the Beaver Dam and Kenosha shell-company controversies keep the transparency wound open. Microsoft's Mount Pleasant buildout proceeds; Port Washington's OpenAI/Oracle project continues under national attention. What changes this rating: the Janesville result, a project rejection by popular vote would be a first-in-the-nation event and a likely downgrade trigger.

ARIZONA - Contested The June incentive freeze, three years, no new sales tax breaks, moved Arizona out of the pure-growth column. Tucson's Project Blue collapse (a unanimous council vote against a $3.6B AWS project after NDA outrage) and Chandler's noise-driven zoning rollback show opposition winning in the state's two urban anchors, while Maricopa County's Project Baccara ($10B, approved, end user undisclosed) shows the old model still closing deals. Water politics loom over everything. What changes this rating: whether the incentive freeze becomes permanent policy, and the first major post-freeze siting decision.

NORTH CAROLINA - Caution More active local fights than anywhere outside Virginia: fifteen-plus localities with moratoriums or formal opposition actions, Durham's "first, not the only" framing proving prophetic, Northampton's 32-month pause the longest documented, the SELC's Stokes County lawsuit live, and a sitting governor calling for the elimination of $50M/year in subsidies. Add the political proof point, David Batts unseating a four-term incumbent on this single issue, and North Carolina is where opposition is most organized per project at stake. What changes this rating: the Stokes County ruling, and whether the legislature moves on the governor's subsidy call.

MICHIGAN - Caution (stabilized by one person) Statewide moratorium bills were reintroduced in June (HB 5594-96, SB 1018-20) alongside a Senate Democratic regulatory package, and Governor Whitmer continues to call a moratorium "an automatic non-starter." That one stance is currently the only thing separating Michigan from Contested. Below the state level: the AG's appeal of the 1.4 GW Oracle/DTE approvals, NDA controversies in four communities, local moratoria in Howell Township, Sterling Heights, and Pontiac, and a $1 billion project withdrawn under community pressure. What changes this rating: anything that changes the governor's position, or the governor.

WASHINGTON - Caution Seattle's emergency moratorium (369 MW of requests against a constrained city grid), a separate large-load rate class under consideration, the UTC's ongoing statewide review of large-load impacts, and now Spokane County weighing a nine-month pause plus developer-funded infrastructure requirements. The state that pioneered data center tax breaks two decades ago is systematically reconsidering every piece of the bargain. What changes this rating: the UTC review's recommendations, due over the coming months.

MINNESOTA - Caution Six-plus lawsuits pending statewide, a two-year statewide moratorium petition with capitol rallies, the Project Bigfoot/"Ken Confidential" transparency scandal still defining the political atmosphere, NDA-restriction legislation in play, and fresh community fights (Pine Island's Project Skyway, with low-frequency noise as the lead complaint, a preview of the acoustic litigation wave Issue #19 mapped). What changes this rating: the moratorium petition's traction and the lawsuit outcomes.

FLORIDA - Caution Nassau County's 12-month moratorium process, Lakeland's one-year pause advancing, and the state's own Commerce Secretary calling a 4.4M sq ft Fort Meade proposal "fundamentally flawed" on energy, water, and infrastructure grounds. When the state's economic development chief is the one blocking projects, the permissive-Florida assumption no longer holds. What changes this rating: whether Tallahassee develops an actual statewide posture, in either direction.

ILLINOIS - Caution The incentive pause took effect July 1, following the governor's own proposal to suspend data center tax breaks, and Tazewell County has blocked new petitions pending an ordinance. A major Chicago-area market with its subsidy structure now formally in question. What changes this rating: the terms under which incentives return, if they return.

MISSOURI - Caution Festus remains the national cautionary tale: an entire council fired over one project, a live lawsuit, recall petitions, and a developer insisting on "vested rights" against a hostile new government. Camdenton and St. Charles are advancing their own pauses. No state framework exists to stabilize any of it. What changes this rating: the Festus litigation outcome, which will define developer "vested rights" doctrine for the whole region.

MAINE - Caution The Mills veto held; the legislature is drafting a modified moratorium for next session; LD 713 already stripped data centers from business incentive programs; Bangor's local pause stands. With less than 5 MW of planned capacity, Maine matters less as a market than as a bellwether, and the bellwether says the fight resumes in January. What changes this rating: the next session's bill, and the governor's-race outcome (Mills is Senate-bound).

1. Virginia is not a top-tier state anymore. The world's data center capital rates below Texas and Louisiana on new development risk, because a seven-year queue, the nation's first consumption tax, and a scheduled exemption rematch are real costs, however priceable. The center of gravity for greenfield megaprojects has already left Loudoun County. The ratings just say it out loud.

2. New Hampshire rates Build while giants rate Caution. A state with almost no pipeline outranks Michigan, Washington, and Florida, because it's the only state that wrote law for the era the industry is actually entering: self-generated, off-grid, behind-the-meter power. Positioning beats installed base when the rules are changing this fast.

3. Louisiana is running the pattern that failed everywhere else. Governor-signed NDAs and shielded project details produced today's smoothest buildout, and preceded every major backlash we've documented. We're rating it Build because the record says build. We're flagging it because the record also says what comes next.

The Q4 edition publishes in late October. Between now and then, these are the documented events that trigger changes:

Reply to this email with a state and "RATING" in the subject if you think we've got one wrong, with receipts. The methodology only stays credible if it gets pressure-tested, and this readership includes the people who know.

The ratings and the Map are two halves of one project: the ratings tell you where the risk sits; the Map is being built to tell you who solves it. Note how many rating triggers are power events, the PJM backstop auction, New York's self-generation framework, New Hampshire's off-grid law, seven-year queues. The supplier ecosystem around power is the variable that moves states between tiers.

Early access list is open: reply with "MAP" in the subject line. Applications open soon.

Eighteen states. Five tiers. One conclusion: there is no longer any such thing as "the U.S. data center market." There are eighteen different regulatory countries that share a currency, and the spread between them is widening every quarter.

The industry's capital doesn't care about any of this, $725 billion is getting spent somewhere. The ratings exist to answer the only question that matters: where can it actually land, and at what price?

This is the first edition. It will be wrong somewhere, and we'll correct it in public, the same way we've scored our predictions all year. That's the point. A reference you can't argue with is a reference nobody trusts.

Quarterly updates from here. Upgrades and downgrades as they happen.

Welcome to the index.

The DC Pipeline State Risk Ratings are published quarterly, with interim rating actions as documented events warrant. Ratings assess new-development risk only and are not investment advice.

Think a rating is wrong? Reply with the state and "RATING" in the subject, bring receipts.

To join the Power Equipment Map early access list, reply with "MAP."

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