Bannock County Sets a 180-Day Data Center Moratorium
Data Centers Are Reshaping Local Communities While Policy Can’t Keep Up
Communities across the U.S. are caught in the middle of a data center building frenzy, and most are unprepared to manage what's occurring. While the boom is a worldwide phenomenon, the U.S. dominates with 41% of the global data center construction market. Driven by hyperscalers such as Meta, Amazon, Google, and Microsoft, U.S. data center construction starts jumped from $14 billion in 2023 to $77 billion in 2025—a 190% year-over-year increase.
Idaho's Appeal Creates Growing Pains
Although Idaho does not currently have many data centers, it’s an attractive location thanks to relatively low energy rates, low risk of natural disasters, and generous tax incentives. Governments at every level are now grappling with the resulting demand on land, power, and water, and they are racing to put policies in place before development outpaces regulation. The Idaho Legislature considered phasing out eligibility for the large capital investment property tax exemption this year but failed to pass reform.
Bannock County's Moratorium
Bannock County, home to the city of Pocatello, recently passed a 180-day emergency moratorium on accepting or processing data center permit applications. The pause allows county staff to have needed time to research and draft a standalone data center ordinance—one aimed at safeguarding utility ratepayers, natural resources, and energy infrastructure while preserving the county's quality of life despite continuing development.
This isn't the county's first temporary moratorium. In 2023, the Board of Commissioners imposed a similar 180-day moratorium on large-scale solar and wind projects, which allowed time for public hearings and work sessions needed to craft regulations. When that moratorium expired, however, the county didn't land on a regulatory framework—it voted to permanently ban large-scale solar and wind projects outright. That history raises the question of whether the data center ordinance will end the same way.
A Separate but Related Fight - the Hoku site
The moratorium won't affect a proposed data center project within Pocatello city limits, since city land falls outside the county's jurisdiction. Lex Developments applied for a conditional use permit to construct a seven-building AI campus at the former Hoku site in west Pocatello. The city previously denied the application, citing inadequate details, and the developer is now pursuing legal challenges and judicial review. Although the county's policy has no direct authority over this project, the controversy surrounding it likely influenced the Board of County Commissioners' decision to get a written data center policy in place since public opposition to the Hoku project has been vocal and strong.
Other Cities Look for Solutions
It will be interesting to see if other Idaho counties, or any local government, follow Bannock County’s lead. The Sandpoint City Council recently directed city staff to draft a definition of data centers that will be used to develop an ordinance banning them. Until the Idaho legislature passes meaningful policy to limit data center construction throughout the state, local jurisdictions need to decide how they want to handle developer interest.
Bannock County is only the first local government to grapple with this issue and implement a moratorium. Until meaningful statewide policy is passed to guide—or limit—data center construction, that decision falls to local governments. Each county and city is left to decide for itself how to respond to developer interest, with no statewide framework yet established. It will be interesting to see if other Idaho counties follow Bannock's lead or if they decide to chart their own course. According to the National Conference on State Legislatures, 15 states are considering passing some type of moratorium but at the time of this writing, none have enacted a policy.
The Idaho State Legislature passed several meaningful bills last session. One addressed water and another addressed large loads of power. ICL was pleased to see the intent behind these efforts but more work needs to be done. Bannock County’s attempt to get a clear idea of how to handle future projects is a great idea and we look forward to seeing what the final policy looks like.
Timeline updates, local drafts to the ordinance, or to receive local draft notifications can all be tracked on the Bannock County Data Center webpage.
