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The Environmental Protection Network reports that federal regulatory changes easing rules on data center backup generators and utility emissions could contribute to nearly 600,000 asthma cases, 1,300 premature deaths and almost $21 billion in healthcare costs by 2028. In Virginia alone, on-site generators operating at just 10% of permitted emission levels are projected to cause 13 to 19 premature deaths annually. The report, covered by Utility Dive, identifies 30 federal regulatory actions it says increase pollution risks.
Backup generators and turbines at data centers are contributing to rising public health risks as federal regulatory changes weaken emissions monitoring and enforcement, according to a new report by the Environmental Protection Network (EPN). The report projects that air pollution from data centers could add nearly $21 billion in U.S. healthcare costs by 2028, contributing to roughly 600,000 asthma cases and 1,300 premature deaths.
EPN, a nonprofit whose members are former public officials with an interest in environmental policy, detailed its findings in a report titled “Hidden Health Costs of AI Data Centers.” The group attributes much of the projected health burden to federal regulatory changes intended to help utilities meet surging data center electricity demand — including expanded use of coal and the extension of combustion-based power plant operations rather than phased retirements. But a distinct portion of the risk, the report says, stems from rules that make it easier for data centers to maintain and operate on-site backup power.
“These engines and turbines can emit nitrogen oxides, smog-forming volatile organic compounds, and soot pollution,” the report states. “The combined generating capacity of a large generator or turbine fleet can rival that of a conventional power plant.” In Virginia, a major data center hub, emissions from on-site generators running at just 10% of permitted emission levels would contribute to approximately 14,000 asthma symptom cases, 13 to 19 premature deaths, and $220 million to $300 million in annual public-health costs, according to estimates from researchers cited by EPN.
The report identifies several specific regulatory actions it says are fueling the risk. An EPA rule finalized earlier this year created a category of small and medium temporary turbines that can remain on site for up to two years with substantially reduced monitoring, recordkeeping and reporting requirements. As a result, EPN estimates 89% more nitrogen oxide will be released annually than under a more restrictive 2024 version of the rule that the Trump administration scrapped. The report also cites an EPA interpretive letter from last year allowing backup generators to participate in utility demand-response programs, and a May emergency order from the U.S. Department of Energy authorizing PJM Interconnection to use backup generation at data centers during grid stress. In total, EPN lists 30 federal regulatory actions it says risk increasing data center pollution.
Health Burden of the AI Buildout
The findings arrive as data center construction accelerates across the United States, driven largely by demand for artificial intelligence computing. Communities near concentrated data center clusters — particularly in Northern Virginia, the world’s largest data center market — face a growing accumulation of diesel generators and gas turbines that can operate during grid emergencies, demand-response events, or extended construction periods. The report argues this shifts pollution burdens onto nearby residents, with children and people with respiratory conditions most exposed.
The projections also carry financial weight. Nearly $21 billion in projected healthcare costs by 2028 represents a quantified public cost of the AI infrastructure boom that is typically absent from discussions of data center economics. In addition, the report warns that running backup generation during heat waves adds smog-forming nitrogen oxides and fine-particle soot “at times when extreme heat and existing air pollution already place people at greater risk” — meaning emissions peak precisely when public health vulnerability is highest.
Permit Loopholes and the xAI Dispute
The EPN report points to an ongoing legal dispute in Mississippi as an illustration of the permitting gaps it identifies. A high-profile lawsuit was filed against xAI over its data center in Southaven, Mississippi, challenging whether the company obtained appropriate permits for temporary or mobile on-site turbines used to generate backup power. “The company and Mississippi regulators dispute that a permit was required,” the report notes, arguing the case shows why clear permitting requirements and consistent enforcement matter as equipment labeled “backup,” “temporary,” or “mobile” is used more extensively.
The report also situates the changes within a broader policy shift. “Before 2025, stronger pollution safeguards, planned fossil-plant retirements, and expanding cleaner power were on track to constrain additional pollution from rising demand,” EPN writes. “Current federal policies are making it easier to keep more-polluting sources of power online or add new ones while weakening many safeguards.” Among the 30 actions listed is a rule exempting private power facilities from acid rain program permits, emissions requirements and standardized reporting.
“These engines and turbines can emit nitrogen oxides, smog-forming volatile organic compounds, and soot pollution. The combined generating capacity of a large generator or turbine fleet can rival that of a conventional power plant.”
— Environmental Protection Network, ‘Hidden Health Costs of AI Data Centers’ report
What the Estimates Leave Out
The health projections are modeled estimates produced by researchers and EPN, not observed outcomes, and their accuracy depends on assumptions about how many backup generators actually run, for how long, and at what emission levels. The Virginia figures assume generators emit at just 10% of permitted levels — actual operations could differ in either direction.
The EPA demand-response interpretive letter cited in the report carries a scope limitation EPN does not address: according to an analysis by compliance firm BackupPower AI, it applies only to on-site generators operating within a local balancing authority’s jurisdiction and does not extend to RTOs or ISOs. The precise effect of the temporary turbine rule on real-world emissions will not be measurable until fleets are deployed under the new requirements. It also remains unclear how the xAI litigation in Mississippi will be resolved, or whether courts or regulators will tighten permitting for mobile and temporary generation.
Watch the Permit Fights and Grid Orders
The outcome of the xAI lawsuit in Mississippi could set an important precedent for whether temporary and mobile turbines require full air permits, potentially shaping how data center operators deploy backup power nationwide. Additional DOE emergency orders authorizing backup generation during grid stress — like the May order covering PJM — are likely if electricity demand from data centers continues to strain regional grids during heat waves and maintenance seasons.
Advocacy groups and public health organizations are expected to pressure EPA to restore stronger monitoring and reporting requirements for temporary turbines, while state regulators in data center hubs such as Virginia may face calls to impose their own permitting limits. EPN says its report is intended to inform that debate by quantifying the health costs of current policy. Future studies tracking actual generator runtimes and measured emissions will determine whether the projected health impacts materialize.
Key Questions
What does the EPN report claim about data center health impacts?
The Environmental Protection Network projects that data center air pollution could contribute to roughly 600,000 asthma cases, 1,300 premature deaths and almost $21 billion in healthcare costs by 2028. These are modeled projections, not observed outcomes.
How does backup power at data centers create pollution?
Data centers use diesel engines and gas turbines for backup and, increasingly, supplemental power. According to the report, these emit nitrogen oxides, volatile organic compounds and soot, and a large fleet’s combined capacity can rival a conventional power plant.
What federal regulatory changes does the report highlight?
Key actions include an EPA rule creating a category of temporary turbines with reduced monitoring requirements for up to two years, an EPA letter allowing backup generators into demand-response programs, and a DOE emergency order letting PJM use backup generation during grid stress.
Why is Virginia singled out in the report?
Virginia hosts the world’s largest concentration of data centers. Citing earlier research, EPN estimates that on-site generators emitting at just 10% of permitted levels would contribute to about 14,000 asthma symptom cases and 13 to 19 premature deaths annually in the state.
Is the xAI lawsuit connected to these findings?
Yes. The report cites the lawsuit over xAI’s Southaven, Mississippi data center as an example of unclear permitting for temporary turbines. The company and state regulators dispute whether a permit was required, illustrating the enforcement gaps EPN identifies.
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