A Protect Oxmoor Public Interest Guide
Not All Data Centers
Are the Same.
A plain-language guide to the seven very different things all called "data centers" — and the questions every neighborhood and policymaker should be asking before approving one.
Including: why your hospital's server room and a 3-million-square-foot AI Factory should probably not be regulated by the same paragraph.
Introduction
What is a data center, really?
The phrase "data center" is used to describe seven wildly different kinds of buildings that have almost nothing in common with one another. The server room at your local hospital is called a data center. So is a 3-million-square-foot AI Factory that draws as much electricity as every home in the city combined. So is a Bitcoin mining warehouse. The same two words — data center — cover all of them. Which is roughly like using one word for "bicycle, semi-truck, and aircraft carrier."
The differences matter enormously — for your power bill, your water supply, your neighborhood, and your tax dollars.
This guide separates the seven types using plain English, so the public and policymakers can ask the right question when a new project is announced: which kind of data center is this, really?
Part 1
What Kind of "Data Center" Is It Really?
If a project is described as a "data center," the most useful first question is: what is it actually comparable to? The honest answer changes the policy conversation completely.
| Type of "Data Center" | Actually Comparable To |
|---|---|
| Private Server RoomEnterprise / hospital / bank | Office IT infrastructure |
| Edge / Neighborhood RelayTelecom node / 5G hub | Utility cabinet or telecom shed |
| Shared Data CenterColocation / "colo" facility | Conventional industrial warehouse |
| Government Data CenterNSA, IRS, military, state systems | Secure federal or state facility |
| Crypto Mining Data CenterBitcoin / blockchain facility | Industrial electrical load with no local product |
| Hyperscale Data CenterCloud campus (AWS, Azure, Google Cloud) | Major utility-scale infrastructure |
| AI FactoryAI Data Center / AI Computing Campus | Industrial megaproject — comparable in scale to a steel mill, refinery, or power plant |
The bottom row is what is currently proposed for Oxmoor Valley. If a steel mill, refinery, or power plant were being sited within one mile of homes, schools, and churches in Birmingham, no one would suggest skipping the public hearing. The question worth asking is whether the existing zoning category for "data centers" was ever designed for a facility on that scale.
Part 2
Why Existing Zoning Codes Struggle With This
The strongest governance argument is also the most reasonable one: the rules were not written for the thing now being proposed under them.
Most municipal zoning ordinances were written before hyperscale AI infrastructure existed. As a result, many cities are now attempting to regulate facilities with city-scale power and water demand using ordinances originally written for conventional office technology uses.
The Birmingham Zoning Ordinance recognizes a category called "Data Center." That single category currently covers:
- a hospital storing patient records,
- a colocation building leasing rack space to several local businesses,
- a cloud campus serving global digital services,
- and an AI Factory that may consume more electricity than every home in the city combined.
These facilities have almost nothing in common except that they all contain computers. Regulating them under a single category is not a technical problem — it is a fairness and public-process problem. The ordinary public protections that apply to industrial megaprojects — environmental review, water and grid impact analysis, binding setbacks, decommissioning bonds, and a real public hearing — do not automatically attach to something called a "data center" under current zoning.
This is the governance question worth raising at every public hearing, in every records request, and in every conversation with elected officials:
Part 3
Why This Matters at Your Kitchen Table
If you only lose power during storms, you may be wondering why any of this matters to you. Here are four things every Birmingham resident should understand.
1. The grid is one shared pie.
Your electricity comes from the same regional power grid that serves every home, hospital, school, traffic light, and business around you. That grid was built for the customers already here. When a giant new customer plugs in, it does not bring its own power. It takes a slice of the same pie everyone else is eating from.
2. Somebody pays to widen the grid — and it's usually you.
To serve a 300-megawatt customer, Alabama Power needs new power plants, new substations, and new transmission lines. Those cost billions. Under current law, those costs go into the "rate base" — recovered from all customers through monthly bills. That is exactly why Alabama Senate Bill 270 and House Bill 403 were filed this year — to change that.
3. Water is the question nobody answers directly.
"Closed-loop" cooling uses far less water day-to-day than older evaporative systems, but it does not eliminate water use. Closed loops still require initial charging, periodic blowdown discharge, makeup water for losses, and emergency evaporative supplements. Without a binding numerical cap, "closed-loop" is a design choice — not a guarantee.
4. Heat and noise do not disappear.
A facility this size exhausts the heat of a small city, around the clock. Households within roughly a mile may see higher summer cooling costs. Industrial cooling fans run continuously, producing constant low-frequency sound — closer in character to a distant highway than to ordinary commercial noise. Constant industrial sound has documented effects on wildlife, pets, and livestock.
Putting the Numbers in Human Terms
A proposed 300 MW facility — like the one proposed for Oxmoor Valley — would use in one year:
230,000 Alabama homes' worth of electricity, running 24 hours a day, every day
This is the standard utility talking point. It is also incomplete. The substation is the driveway — the on-ramp connecting one customer to the grid. It does not generate one watt of electricity.
The grid itself — the power plants, the high-voltage transmission, the regional network — was sized for the customers already here. Under regulated rates, the cost of new generation goes into the rate base, recovered from all customers through monthly bills.
That is exactly why Senator Lance Bell (R-Pell City) introduced Senate Bill 270 and Representative Neil Rafferty (D-Birmingham) introduced House Bill 403 in February 2026 — to require data center operators to pay the full cost of grid infrastructure upgrades. If the utility's assurance were already true, those bills would not be necessary.
Closed-loop cooling is a meaningful improvement over older evaporative systems. It is not a guarantee that the facility has no water or heat impact on the surrounding community. Three points:
- The heat still leaves the building. A closed loop picks up heat from GPU chips, then transfers it to the outside air through chillers, dry coolers, or cooling towers. "Closed-loop" and "no heat island" are not the same thing.
- The water still has to be changed. Closed loops require initial charging (millions of gallons to fill the system), routine makeup water, and periodic blowdown discharge. The Birmingham ordinance itself acknowledges this in paragraph 17.
- The ordinance permits evaporative supplements. During a heat wave — the exact time the public water supply is most stressed — the facility may be permitted to switch into water-intensive evaporative mode. Duration and volume limits are undefined.
Part 4
The Seven Categories at a Glance
A quick visual reference for distinguishing data center types by community impact. If your eye lands on a row full of red — that is the point.
| Type of Data Center | Power | Water | Jobs | Tax Abatement | Community Impact |
|---|---|---|---|---|---|
| AI Factory AI Data Center / AI Computing Campus |
Extreme | Extreme | Moderate | High | Greatest grid, water, heat, noise, and infrastructure exposure of any facility type. |
| Hyperscale Cloud Computing Campus |
High | High | Moderate | High | Major grid and water demands. Heavy abatement requests. |
| Crypto Mining Cryptocurrency Data Center |
Extreme | High | Minimal | Low | Highest scrutiny: extreme power use, almost no local benefit. |
| Shared (Colo) Colocation Facility |
Moderate | Moderate | Moderate | Moderate | Conventional industrial use. Standard zoning review. |
| Government Government Data Center |
Moderate | Moderate | High | Moderate | Strong, stable employment. Limited tax base. |
| Private Enterprise Server Room |
Low | Minimal | Low | Low | Minimal community impact. Standard building permit. |
| Edge Neighborhood Relay Facility |
Low | Minimal | Minimal | Low | Small footprint. Cooling-fan noise is the main concern. |
Note: Impact ratings reflect typical conditions for the category. Specific projects vary based on size, technology, design, and conditions imposed by local government.
Part 5
Each Data Center Type in Detail
Beginning with the AI Factory — the category currently driving the largest public-policy decisions, and the type proposed for Oxmoor Valley.
AI Factory
also known as: AI Data Center / AI Computing Campus / a specialized type of "hyperscale" data center
500 to 2,000+ megawatts. May require a dedicated power plant. Can exceed total residential demand of an entire mid-sized city.
Cooling water depends on design. Closed-loop reduces day-to-day use but does not eliminate it. Initial charging, blowdown, and emergency evaporative supplements remain.
Highly automated. Fewer permanent jobs than size suggests. Construction jobs are temporary. Quoted figures often include construction headcount.
Large nominal investment, but aggressive tax incentive requests are common. Net public benefit depends entirely on terms negotiated.
Key Questions for Policymakers
- Grid & Infrastructure — Will any new power plants, transmission lines, or substations be required, and will those costs be added to the rate base? TVA imposed its first-ever rolling blackouts in north Alabama during Winter Storm Elliott (Dec. 2022). The grid does not have unlimited spare capacity.
- Capacity vs. Operating Load — What is the binding, enforceable maximum operating capacity — not the engineered build-out capacity? Will the developer agree in writing that the facility will not operate above its initially-approved capacity without a new public hearing?
- Heat Island — What is the projected ambient temperature increase for homes, schools, and businesses within one mile? "Closed-loop" cooling does not eliminate the heat — it rejects it to the surrounding air.
- Noise — What are the documented decibel levels at the property line, day and night? Has a pre-construction and post-construction acoustic study been required and made public?
- Water (Binding Cap) — What is the binding daily and annual water consumption cap, in gallons, written into the development agreement? Without a numerical cap, "closed-loop cooling" is a design preference rather than an enforceable protection.
- Water (Change-Out & Discharge) — What is the projected frequency and volume of cooling-system blowdown discharge? Where does it go? What chemicals will be in the discharge?
- Water (Emergency Evaporative Mode) — Under what specific conditions would the facility switch from closed-loop to evaporative cooling? Is there a binding cap on duration? During a drought heat wave, what protects the public water supply?
- Jobs & Wages — What is the binding, enforceable commitment on permanent local jobs and wages, separated from construction-phase headcount?
- Incentives — What tax abatements, utility rate concessions, or other public subsidies are being granted, and what is the calculated public return per dollar foregone?
- Environmental Review — What air quality, stormwater, emissions, and combustion review has been required?
- Decommissioning — When this technology becomes obsolete or the operator leaves Birmingham, who is legally responsible for cleanup? Is a decommissioning bond required? At what amount? Without a bond, the answer is: the public.
Hyperscale Data Center
also known as: Cloud Computing Campus — the back-end of services like Amazon Web Services, Google Cloud, Microsoft Azure
100 to 1,000+ megawatts. Can strain regional grids.
Millions of gallons per day for cooling systems.
200 to 500 permanent jobs despite massive footprint. Highly automated.
Large potential property tax base, but major abatements are frequently requested.
Key Questions for Policymakers
- Grid & Infrastructure — Does utility capacity exist without grid upgrades that get socialized across all ratepayers?
- Heat Island — Same questions as for AI Factory; the waste heat is comparable.
- Noise — Acoustic studies and binding sound-level limits at the property line.
- Water — Supply agreements, drought protocols, and impact on residential pressure.
- Incentives — Are tax abatements proportionate to the small number of permanent jobs actually created?
- Decommissioning — Bond required for eventual site cleanup and equipment removal?
Crypto Mining Data Center
also known as: Cryptocurrency or Blockchain Data Center — in plain English, a Bitcoin mining facility
Maximum constant draw — power consumption is the entire business model.
Significant cooling required.
Highly automated. Very few jobs per megawatt of power consumed.
Grid strain can raise rates for other ratepayers. Produces no local product or service.
Key Questions for Policymakers
- Is there any local economic benefit proportionate to the grid strain?
- Will residential and small-business electricity rates rise?
- Has a moratorium been considered, as in other states?
- Same heat, noise, water, and decommissioning questions as larger facilities apply.
Shared Data Center
also known as: Colocation Facility or "Colo" — a building where multiple companies rent server space
10 to 100 megawatts.
Cooling systems required, at conventional industrial scale.
50 to 300 permanent jobs. Construction-phase employment in addition.
Property tax revenue; some localities offer abatements.
Key Questions for Policymakers
- Is the site properly zoned industrial?
- What is the truck and vendor traffic impact?
- Are tax abatements being requested, and are they justified?
- Noise and decommissioning provisions should still be in writing.
Government Data Center
also known as: Government or Military Computing Facility
Moderate to high, depending on classification level and function.
Conventional cooling.
Well-paid, stable, long-term jobs. Clearance requirements keep employment local.
Federal facilities may be tax-exempt; state and local vary.
Key Questions for Policymakers
- Federal facility = limited local leverage. State or local = real negotiating room.
- Workforce pipeline agreements are the highest-leverage ask.
- Stable, secure employment generally outweighs limited tax base concerns.
Private Data Center
also known as: Enterprise Data Center or Company Server Room — a facility for one company's internal use
Predictable, stable draw.
Conventional building cooling.
Mostly internal IT staff.
Internal cost center; no new tax base.
Key Questions for Policymakers
- Standard building permits. No special zoning typically required.
- Minimal community impact. This is the kind of "data center" that probably belongs near other commercial uses.
Edge Data Center
also known as: Neighborhood Relay Facility — small, located close to where people live
1 to 10 megawatts.
Minimal.
Often unmanned; remote-managed.
Minimal tax base; often on existing telecom or utility property.
Key Questions for Policymakers
- Siting near residential areas is the most common policy issue.
- Cooling-equipment noise can be a real nuisance concern at residential property lines.
The Bottom Line
When a project is described as
"just a data center," the first question is: which kind?
A neighborhood relay node and an AI Factory are both "data centers" in name only. One serves the surrounding community with minimal impact. The other can draw electricity comparable to every home in the city combined, consume millions of gallons of water per day, exhaust the waste heat of a small city, and operate within sight and earshot of homes, schools, and churches — around the clock, for the operating life of the facility.
The legal frameworks, public hearings, and incentives appropriate for one are not appropriate for the other. Treating them as interchangeable is how communities end up with industrial infrastructure they were never asked to approve.
Plain language. Real questions. Honest answers.