Environmental attorneys and community groups have urged North Carolina regulators to reject applications from Amazon Web Services Inc. and Duke Energy Corp. to operate diesel generators at a $10 billion data center to be built in a rural area southwest of Charlotte. The 21-building AI campus is among the largest corporate investments in state history.
At issue is how pollution from the combined 649 diesel generators is accounted for under the Clean Air Act's New Source Review program. The debate centers on whether the permitting for such pollution can be split up on two separate "minor" permits under the law — or should be sorted under a single "major" permit. The minor permits are quicker to obtain and come with fewer environmental reviews and requirements.
Duke has agreed to lease and operate 57 of the diesel generators at the data center property Amazon owns. Those engines will power the site for less than a year until a new substation and transmission line have been built, allowing the data center to connect to the grid. Those generators will then be retired, while the remaining 592 Amazon-owned generators will be installed to serve as emergency backup generation.
The Southern Environmental Law Center (SELC) and nearly 40 advocacy groups argued in a July 30 comment that all the generators should be considered a single, major source of emissions under the Clean Air Act because the Duke generators, while permitted as a part of its adjacent power plant, are only serving the data center and are located at the Amazon property.
"They are clearly artificially having Duke Energy operate them to split them into a separate stationary source so they don't have to comply with these heightened protections for air quality," Caroline Cress, a North Carolina-based attorney for SELC, said in an interview. "When you combine all those emissions together, they exceed the threshold for this higher level of permitting."
The complaint comes at a time when hyperscale developers face increased pushback from communities over energy and water use, noise, pollution and other concerns associated with the booming AI industry. On July 3, Texas followed an earlier decision by New York to halt data center construction, which has turned into a major issue in the November midterm elections.
A question of 'common control'
In response to emailed questions, the North Carolina Department of Environmental Quality (DEQ) rejected SELC's interpretation of what the Clean Air Act dictates, as did Duke Energy and Amazon. The agency has already issued two separate initial draft permits for the companies.
SELC also argued that Amazon violated the Clean Air Act by starting construction of the data center without obtaining a required pollution control permit. DEQ said the work, which began in fall 2025, was allowable under state and federal law as long as it is not related to emission sources under review.
The key question for the regulators, companies and attorneys is the concept of "common control." To determine which of the companies has control over the diesel generators, DEQ applied a test that examined whether they belong to the same industrial grouping and if they are located on the adjacent or contiguous property.
The third question in that test is whether the "sources are under the common control of the same person or persons under common control, including legal ownership, operational control or other arrangements that give the same entity authority over the facilities," DEQ spokesperson Shawn Taylor said in an email. "DEQ's review of the applications determined that the permits did not meet the third requirement that they are subject to common control."
This determination allowed the companies to apply for "synthetic minor" New Source Review permits under the Clean Air Act. Minor source permits apply to facilities that emit pollutants below certain thresholds, allowing faster approval than major source permits that require extensive environmental review.
To get there, the companies agreed to use catalytic emission control technology to reduce releases of harmful nitrogen oxides, carbon monoxide, organic compounds and particulate matter. Amazon said pollution controls on its generators would limit nitrogen oxides, which contribute to smog and acid rain, by at least 90%. Particulate matter, dangerous when inhaled, would be reduced by 70%.
"We're committed to protecting air quality in Richmond County and will continue to work closely with the agency to ensure we meet or exceed all applicable environmental and public health standards," an Amazon spokesperson said in an email.
DEQ in its draft permit determined that the 57 Duke temporary diesel generators should be part of the utility's permit for its natural gas-fired power plant across the road from the new data center, even though the generators will be located on Amazon property.
"Because AWS has no control over operations that could affect air permit compliance at Duke Energy's facility, consistent with US EPA single-source guidance, there is no common control among the facilities," Duke spokesperson Bill Norton said in an email. "Accordingly, they are properly considered separate sources for Clean Air Act permitting purposes and their emissions should not be aggregated."
'Not opposed to progress'
Speakers at a July 30 hearing on the North Carolina permits, most of them from small communities near the new data center, asked DEQ officials why all emissions from the project were not tallied up, since any health impacts would stem from the combined emissions. Others wondered how the state planned to keep the companies from emitting more than they were allowed, considering that the nearest air monitor is 30 miles away.
"I'm especially concerned about children, our senior citizens and individuals living with asthma, heart disease other conditions," the Rev. Rebecca Warren, pastor with the Wayman Chapel A.M.E. Zion Church, told the hearing. "We are not opposed to progress. However, we believe that progress should never come at the expense of the health, safety and quality of life for the people who already call this place their home."
The church, which serves families living around the area, is about half a mile away from the new Amazon data center, near the border of South Carolina. A disproportionate share of the population in those census tracts is African-American or indigenous, with high social and health vulnerabilities, according to community impact reports the companies filed with DEQ. Duke, headquartered in Charlotte, said neighbors of the data center will be protected.
"All emissions from our power plant and the temporary generators combined will remain below the strict permit requirements set to keep the public and surrounding environment safe," Norton said.
Contract may shed light
A number of speakers also questioned DEQ's decision to give each company involved with the data center project its own draft permit.
Duke Energy's temporary generators "wouldn't even come to town if Amazon didn't need them," Michelle Carter, a campaign director for the North Carolina League of Conservation Voters, told the July 30 hearing. "These generators are paid for by Amazon, will be turned on and off by the request of Amazon, and will be placed on the site for the needs of Amazon."
Cress said her organization is awaiting DEQ's review of the public comments in hopes regulators will rethink their decision. A key step would be for DEQ to request a copy of the contract Duke entered into with Amazon to provide generators, she said.
"The contract ... establishes a level of control that Amazon has over those [Duke] generators that legally makes it part of the stationary source that Amazon will be operating," Cress said.
If such issues are not resolved, the Richmond County data center permits could eventually be adjudicated in court. SELC filed a lawsuit in a South Carolina state court in July over a similar permitting dispute associated with a $3 billion data center in that state.
