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his is not a new signal — it’s reinforcement. Over the past several weeks, multiple jurisdictions and grid operators have surfaced the same underlying reality: data-center growth is no longer governed by demand or capital, but by infrastructure tolerance. Kansas City’s move to tighten data-center zoning and ERCOT’s swelling large-load interconnection queue represent the institutionalization of a constraint we’ve already been tracking.
➤ SIGNAL
What’s happening
In Kansas City, local officials are moving from informal scrutiny to formal zoning controls for data-center developments. The rationale is familiar — concentrated land use, high power intensity, and limited public upside — but the shift from case-by-case review to codified restriction is the escalation point.
At the same time, ERCOT is contending with a backlog of large-load interconnection requests that continues to grow, dominated by hyperscale and AI-driven compute users. What was once a planning challenge is becoming an operational bottleneck, forcing sequencing decisions that effectively ration access to power.
Neither development is isolated. Both reflect the same progression: tolerance is giving way to governance.
Why this matters now
The inflection isn’t the existence of constraints — it’s their formal enforcement. Zoning rules and interconnection queues convert soft risk into hard timelines, fixed costs, and binary outcomes. Once codified, these constraints do not ease with capital or market enthusiasm.
For developers and institutional investors, this means feasibility risk is migrating upstream. Site control, design, and underwriting assumptions that worked even twelve months ago now face materially different approval dynamics.
Takeaway
Markets are no longer competing on incentives or speed. They are competing on who can say yes — and how often. The winners will be sponsors and jurisdictions that can align land use, grid capacity, and political acceptance early, not those who assume power will arrive eventually. This isn’t a new trend. It’s the hardening of one we’ve been flagging. Data-center growth isn’t slowing — it’s being selectively permitted.
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