Can Power Companies Acquire Private Land for Data Centre Infrastructure? Legal Debate Grows as AI Expansion Drives Grid Upgrades

The rapid growth of artificial intelligence is driving an unprecedented expansion of data centres, but the infrastructure needed to power these facilities is creating new legal challenges.

According to a Pew Research Center analysis, the United States has more than 3,000 operational data centres, with another 1,500 under development. As these facilities consume increasing amounts of electricity, utilities are planning new high-voltage transmission lines to strengthen power grids and meet future demand.

However, many of these projects require access to privately owned land, raising questions about whether power companies can use eminent domain to acquire property without a landowner’s consent.

Rising Energy Demand

Data centres accounted for more than 4% of total electricity consumption in the United States in 2024. With AI adoption accelerating across industries, power demand is expected to rise significantly over the coming years.

To support this growth, utilities need to expand transmission networks and secure land for new power lines.

What is Eminent Domain?

Eminent domain allows governments to acquire private property for public use while providing fair compensation to landowners. In many US states, this authority can also be delegated to utility companies responsible for building critical infrastructure.

The legal question is whether transmission lines built primarily to serve private data centres qualify as serving a public purpose.

Courts Have Issued Mixed Rulings

US courts have interpreted “public use” differently over the years.

Several state courts have allowed land acquisition for transmission projects that improve electricity reliability and benefit local consumers.

However, courts have rejected projects where transmission lines mainly served private interests or failed to provide meaningful benefits to residents within the state.

These rulings suggest that future legal challenges will depend on whether utilities can demonstrate that new transmission infrastructure strengthens the broader electricity grid rather than serving only individual data centres.

Growing Community Opposition

Public resistance to AI infrastructure is also increasing.

Many communities have raised concerns over higher electricity costs, increased water consumption, noise, environmental impacts and the loss of green spaces associated with large-scale data centre developments.

As governments continue investing in AI infrastructure, balancing public interest, energy security and private property rights is expected to remain a key legal and policy challenge.