Google and Avaio proposals raise concerns about power, water and rural land
Two hyperscale data center proposals emerged in January in and near Little Rock. Google plans a 1.43 million-square-foot facility at the Port of Little Rock. Avaio has proposed a project 10 miles south of the city in a rural area of marshy forest in unincorporated Pulaski County.
Avaio says its first phase would cover 30 acres and use 150 megawatts of power, roughly the consumption of 100,000 homes. A second phase would require up to a gigawatt of power and use about 4 million gallons of water each day.
The proposals have focused attention on the costs that residents could face through water and electricity demand. Little Rock Mayor Frank Scott Jr. said residents worry that the projects will consume water, raise electricity costs and fail to pay what they consider a fair share.
“Water is, as we know, a security issue. It’s a way of life issue,” Scott said. He also pointed to Arkansas’ nickname, the Natural State, and said many residents are concerned about natural resources.
The data center industry has found Arkansas attractive for the same reasons crypto miners did: inexpensive land and power. Arkansas industrial electricity customers pay between 5 and 7 cents per kilowatt-hour, compared with a national average of 8.71 cents, according to figures from the U.S. Energy Information Administration.
A Pew Research analysis of planned data centers found that three-quarters of those projects are expected to be built in the South and Midwest. The South alone accounts for nearly half of the planned facilities.
Arkansas lawmakers passed legislation three years ago that prevents cities and counties from banning data centers. State Rep. David Whitaker, a Democrat from Washington County, said the measure originally addressed concerns about crypto mining in rural areas and that data centers were added to the definitions during the legislative process.
“Nobody was talking about these datacenters in 2023,” Whitaker said.
Scott, who was at the state Capitol during debate over the bill, said the inclusion of data centers “seems very intentional to those involved” now. The law blocks outright bans but leaves cities and counties broad authority to regulate projects.
Little Rock used that authority in June, adopting an ordinance that sets limits on noise, heat and water use and establishes requirements for sewerage and setbacks. The ordinance includes financial penalties for violations and bars hyperscale data centers from residential neighborhoods, effectively limiting them to the Little Rock Port Authority district.
Some residents have called for a broader moratorium so the city can spend more time developing its rules. Scott said supporters of data centers consider the ordinance too strict, while opponents say it does not go far enough.
“When you are a blue city leader in the midst of the red state, you have to figure out how to get in the middle, and still be progressive at the same time,” Scott said.
Pulaski County rejected a proposed one-year development moratorium last month, along with an exemption for Avaio. The proposal followed criticism that Justice of the Peace Dianne Curry took direction from an Entergy Arkansas executive while drafting the exemption.
County lawmakers returned to negotiations over how to constrain development without violating state law.
Wendell Griffen, a retired Arkansas circuit judge and court of appeals justice who won the Democratic primary in March to replace Pulaski County chief executive Barry Hyde, said the Avaio site relies on a volunteer fire department without specialized equipment, sufficient personnel or commercially available fire-suppression foam for potential large-scale lithium-ion battery or electrical fires.
Griffen described the project as “very real redlining” and said it would appropriate rural, Black-owned land for industrial use without producing large numbers of local jobs. Avaio projected 70 permanent jobs in the first phase, he said.
Gale Jefferson, who lives near the proposed site, said the surrounding community is largely Black or immigrant, working class and often elderly. Residents have distributed handbills urging neighbors to attend the quorum court, and a recent hearing filled the chamber, but Jefferson said many people lack the energy or inclination for sustained protest.
“Our government, who we choose to have represent us, can’t say no, regardless, even though we would want them to say no,” Jefferson said.
Jefferson’s family has held its property for generations. She said much of the surrounding land is heir property, and that some owners do not want to return after their parents have died. Jefferson said her family property has no sewer line, and many homes rely on window air-conditioning units rather than central systems.
Jefferson said residents are sensitive to electricity-price changes and fear that the project could reduce the value of modest properties. She also questioned whether the data center would employ people from Wrightsville, where a boarded-up Dollar General stands near the road connecting the community to Interstate 530 and Little Rock.
Scott contrasted opposition in Little Rock with the response in West Memphis, a smaller Arkansas city where Elon Musk’s xAI has a project. He said residents there welcomed Google’s $25 million commitment to workforce development and impact funds, while other similarly sized cities have opposed data centers.
Scott is up for re-election this year and has tried to oppose the proposed projects while managing the city’s relationship with state officials. He said he has a longstanding relationship with Arkansas Gov. Sarah Huckabee Sanders, whom he came to know while working as a political aide for former Democratic Gov. Mike Beebe and Sanders worked for Sen. John Boozman.
“There’s a very hostile relationship between the state legislature and Little Rock,” Scott said, adding that the city’s lawyers drafted the ordinance to leave as few openings as possible for a legal challenge.