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Data-center nondisclosure agreements (NDAs) can keep a project’s developer, anchor customer, electricity demand, water use, energy plan and proposed public benefits confidential while a site, utility connection, tax package or land deal is being assembled. That secrecy can leave residents with less time to check the numbers, obtain independent advice and influence decisions before commitments become expensive to reverse. Several states now respond by restricting NDAs and requiring public dashboards, recurring resource reports, comment channels and enforceable community-benefit agreements.
What a data-center NDA changes
An NDA is a contract that limits what one party may disclose. In a data-center negotiation, a developer, site-selection consultant, utility, state agency or municipality may use one while discussing land, power, water, incentives or a prospective customer. Confidentiality can protect legitimate trade secrets, but it can also cover project-level facts that determine public costs and environmental effects.
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The central issue is timing. If residents learn about a facility only after a preferred site, utility arrangement, tax incentive or draft benefits package has been selected, they may be asked to comment on a nearly completed deal. By then, the developer may have spent money on engineering, the utility may have reserved capacity, and public officials may regard changing the project as impractical. Earlier disclosure gives journalists, neighbors, utilities and independent experts time to test assumptions and propose alternatives.
What may remain undisclosed
- The legal name of the developer, its parent company and any site-selection agent.
- The identity of an anchor tenant, when one has been disclosed to public officials.
- Projected peak electricity demand, the schedule for reaching that load and proposed substations or transmission upgrades.
- Annual and peak-day water demand, the cooling method and planned water-treatment capacity.
- The energy plan, including grid purchases, on-site generation, storage and backup generators.
- Expected employment, construction traffic, tax exemptions, land concessions and other community benefits.
Keeping those items secret does not merely hide a corporate name. It prevents a community from comparing the promised benefits with the roads, substations, water systems, emergency services and monitoring that public agencies may need to provide.
Why the information gap matters to residents
Public-records and participation problems
Negotiations conducted behind closed doors can make it difficult to determine which records exist, which agency is responsible for a decision and when a formal approval will occur. A resident who hears about a project through a rumor or a late planning notice may not have enough time to commission a water study, obtain utility expertise or organize testimony. Confidentiality can also make it harder to compare a proposed deal with other sites or with the developer’s public projections elsewhere.
An NDA does not automatically erase every public-record obligation. Public-record, open-meeting, environmental-review and permitting rules vary by jurisdiction. The practical question is which project information an agency is withholding, under what legal authority, and for how long. Communities should ask agencies to separate genuine trade secrets—such as proprietary computing designs—from public impacts that can be disclosed without revealing a customer’s commercial strategy.
Electricity, rates and reliability
Large data centers can require new generation, substations, transmission lines or demand-management arrangements. A confidential load forecast can conceal whether the utility’s existing capacity is sufficient or whether ratepayers may finance upgrades. It can also obscure who bears the cost of interconnection, reliability reserves and emergency power. Massachusetts identifies grid investment, energy affordability and reliability as community concerns, not simply private matters between a developer and a utility.
Residents should see both projected peak demand and the assumptions behind it: operating hours, expansion phases, redundancy, on-site generation and the share expected to be served by renewable contracts. A single annual electricity figure can understate the infrastructure needed to serve short, intense peaks.
Water and cooling
Cooling choices affect withdrawals, treatment, discharge and drought risk. A project may have modest average consumption but a much higher peak-day requirement during hot weather. Pennsylvania’s GRID requirements call for annual energy and water reporting that includes total consumption and peak measures. Those metrics let a community compare the approved design with actual operations and detect growth that was not part of the original public discussion.
Air, noise, light and traffic
Backup generators, construction equipment and increased road traffic can affect air quality and noise. Cooling equipment, transformers and generators may operate continuously or during testing. Exterior lighting can alter nearby neighborhoods. New Jersey municipal guidance tells local governments to evaluate air, noise, light, utilities, infrastructure capacity and emergency services alongside the facility itself.
Public health and emergency response
Fire departments and emergency medical services may need training, specialized equipment, additional staffing or new access routes. Water-system failures, transformer fires, fuel storage and extreme-weather events can create response demands that are not visible in a developer’s job estimate. A public review should identify those needs, their recurring cost and the party responsible for paying them.
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A negotiated package can include tax exemptions, discounted land, utility upgrades, road work, expedited approvals and donations. Secrecy makes it harder to evaluate whether those concessions are proportionate to permanent jobs, tax revenue and other benefits. It can also hide whether benefits reach the neighborhoods carrying the noise, traffic or water burden.
The Federation of American Scientists recommends that agreements identify where community money goes and report employment, water, energy and noise results. A credible proposal therefore states the baseline, the promised benefit, the measurement method, the deadline and the consequence if the promise is missed. “Jobs” should specify direct and permanent positions rather than counting temporary construction work as an indefinite total.
How current state approaches differ
States are taking related but distinct approaches. The key differences are when information becomes public, whether commitments are legally enforceable, which impacts are measured and how residents participate.
| Jurisdiction and policy | NDA and disclosure approach | Measurement or participation tools |
|---|---|---|
| Maryland, Executive Order 01.01.2026.16 | Executive-branch agencies may not enter, renew or extend an NDA with a data-center developer, operator or site-selection agent concerning a proposed or existing project. Required disclosures include the developer, parent company, anchor tenant when disclosed, projected peak demand, water use and energy plans. | A public dashboard model lists location, developer, projected demand and water use, agency engagements, commitments, annual reports, a community contact and a public-comment route. |
| Pennsylvania, GRID requirements | NDAs are prohibited for covered proposals. | Annual energy and water reports include total consumption and peak measures, allowing review after approval rather than only at the permitting stage. |
| Massachusetts, Statement of Expectations | State agencies, municipalities and communities should avoid NDAs whether or not a project receives the tax exemption. | Qualifying permits are tied to a community-benefit agreement, with state attention to energy, water, air, public health, noise and land use. |
| New Jersey, Economic Development Authority guidance | Provides negotiation and technical-assistance guidance rather than a single statewide NDA ban described here. | Municipalities are told to examine utilities, emergency services, water, air, noise, light and infrastructure capacity. It defines CBAs as legally binding contracts between developers and host municipalities and/or local community groups. |
These policies do not mean every project has identical rules. Coverage can depend on the agency, incentive program, permit type and project date. Residents should ask which statute, executive order, regulation or grant condition applies to their specific proposal.
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Disclosure is most useful when it is specific, timely and updated. A community can request the following before a major permit, incentive, land transfer or utility commitment:
- Identity and control: developer, parent company, site-selection agent, anchor tenant when known, property owner and entities signing the agreement.
- Location and schedule: parcel maps, construction phases, expected operation date, expansion triggers and decommissioning assumptions.
- Resource demand: projected peak and annual electricity demand; annual and peak-day water use; cooling technology; wastewater and discharge plans.
- Energy and equipment: grid connection, generation and storage, renewable-energy claims, fuel storage, backup-generator testing and emissions controls.
- Community effects: traffic, noise, lighting, air emissions, land-use changes, emergency-service demand and infrastructure capacity.
- Public finance: tax exemptions, grants, land discounts, utility contributions, road or water-system work and the party responsible for each cost.
- Benefits: direct and permanent jobs, workforce programs, local procurement, payments to affected neighborhoods and delivery deadlines.
Maryland’s dashboard concept is a practical model because it pairs project facts with agency contacts, commitments, annual reports and a way to submit comments. A static announcement is not enough when load, water use and construction plans can change.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to negotiate a fair community-benefit agreement
A community-benefit agreement (CBA) should be a binding contract, not a press release or informal letter. New Jersey’s guidance describes CBAs as legally binding contracts between developers and host municipalities and/or local community groups. The agreement should be available to the public before the decisive permit or incentive vote.
Define measurable promises
Write each benefit as a measurable obligation. Examples include a number of permanent local jobs by a stated date, a funded training program, a maximum construction-noise level, specified water-efficiency performance, or a contribution tied to verified operating capacity. Define the baseline, unit, measurement interval and independent verifier.
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Assign reporting and audit rights
Require monthly or quarterly construction reports where impacts are intense, and at least annual operating reports for energy, water, air, noise, traffic, jobs and payments. The community should be able to inspect underlying records or commission an independent audit when reported results are disputed. Reports should identify both total and peak values; averages alone can miss the conditions that drive infrastructure and environmental stress.
Include remedies and successor duties
Specify cure periods, penalties, payment clawbacks, permit conditions or other remedies for missed commitments. Obligations should bind purchasers, affiliates, operators and successors so that a sale does not erase them. The contract should state what happens if construction stops, the facility expands, the tenant changes or operations end.
Plan for decommissioning and review
Require a funded decommissioning plan covering equipment removal, fuel and battery handling, site restoration and outstanding public costs. Add periodic review dates so standards can be updated when technology, water conditions, grid rules or neighborhood impacts change. Review should not permit unilateral weakening of existing obligations.
A resident’s action plan
- Request the developer identity, parent company, anchor tenant when disclosed, site, peak electricity demand, annual and peak-day water use, cooling method, energy plan, backup generation and expected jobs.
- Ask every involved agency whether an NDA, site-control agreement, utility agreement or tax-incentive term limits public access, and request the legal basis and expiration date.
- Separate trade secrets from project-level impacts. Ask for redacted versions rather than accepting a blanket refusal.
- Request independent review of water, energy, air, noise, traffic, land use, emergency services and ratepayer effects before approvals or subsidies.
- Insist on a public dashboard or recurring reports, with a named community contact and a working comment channel.
- Place benefits and mitigation in a binding CBA with deadlines, metrics, reporting, remedies, successor obligations, decommissioning and periodic review.
- Publish the final agreement and performance reports so residents can track compliance over the facility’s life.
What the evidence can and cannot establish
Available policy documents and governance analyses establish that NDAs can reduce the time and information available for public scrutiny and that states are building disclosure and enforcement mechanisms in response. They do not provide a causal, peer-reviewed estimate of how much an NDA alone changes participation, property values, utility rates or health outcomes. Those effects depend on the project’s size, location, infrastructure and the rules governing the approval.
The defensible conclusion is narrower and more useful: secrecy can make it harder to test claims and negotiate before choices become entrenched, while timely disclosure, independent measurement and enforceable agreements give communities practical control over public costs and promised benefits.
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