Educate. Participate. Regulate. Negotiate.

Example set of POSSIBLE regulation areas

Forward:

Below is a shopping list of areas you can address in your regulations. Which ones you choose and don't choose are up to you. Keep in mind that the more complicated your regulations, the less attractive your city/county may look to a developer.

Everything between your city/county and data center developers is a negotiation. As a policy maker don't be afraid to address concerns with out-of-the-box thinking, or to request documentation on any issue you feel is warranted.

Challenge:

Too often, data center deals play out as single-project siting games that pit giant developers in narrow negotiations with local governments. This mindset results in deals that focus on an important but circumscribed set of issues (electricity, water, noise, and zoning) but leave out larger questions of regional advantage such as higher-value tech benefits and gains for the broader technology ecosystem.

Opportunities:

In contrast, the controversy and competitiveness of new data center sitings mean that regions and states have a chance to negotiate harder for a broader set of benefits aimed at supporting their boldest economic aspirations in sectors where a given region has a competitive advantage. In that vein, more communities have the leverage to trade expedited permitting and approvals for substantive gains that truly advance the region’s goals, whether that involves donations of compute to local universities, R&D partnerships, support of local talent programs, or investments in AI startup intermediaries. Nor do these gains need to be broached as mere deal sweeteners or appended community benefits. Instead, communities can now argue for strategic benefits like these as core elements of any deal, given the increasingly challenging atmosphere surrounding such deals and the overstretched, specialized workforce needed to build these sites.

-Areas to address-

THIS IS NOT LEGAL OR PLANNING ADVICE OR AN ALL INCLUSIVE LIST; it is merely a list of areas you might want to address, further investigate, and alter or include in your regulations.

Definition of Data Center:

• Office (exempt from all): Under .5 Mw and less than 15% of facility square footage

• Small: Under 10 Mw

• Medium: 10-75 Mw

• Large: Over 75 Mw

Location:

• Zoning requirements:

  • Small: Mixed Use

  • Medium: Commercial

  • Large: Commercial

• Setbacks:

  • Small: 100-foot residential setback

  • Medium: 200-foot residential setback

  • Large: 300-foot residential setback

Energy:

• Mandatory: Energy infrastructure cost born exclusively by data center (already covered by KCC Large Load Power Users Tarrif)

• (Medium & Large) Formal electrical use agreement with the serving utility at CUP (Conditional Use Permit) application. Agreement to lock in exactly how much power the facility will use and how much the utility provides.

• Energy consumption limit for single data center. (Example: 50 Mw)

• Total allowed allocation cap for all data centers in governmental jurisdiction. (Example: 200 Mw)

Water:

• Highly Recommended: Closed loop cooling system; evaporative cooling not authorized.

• (Medium & Large) Formal water use agreement with the serving utility at CUP application. Agreement to lock in exactly how much water the facility will use and how much the utility provides.

• Water consumption limit for single data center. (Example: 5,000 gal/day)

• Total water allocation cap for all data centers in governmental jurisdiction. (Example: 50,000 gal/day)

Wastewater:

• (Large) Require real-time monitoring of water flows and quality.

• (Large) Require data centers to pre-treat industrial wastewater on-site, essentially installing mini water treatment facilities, before releasing it to the public sewer system.

Noise (Small, Medium, & Large):

• 55 db daytime (8am to 6pm daily), 50 db nighttime noise limit at property boundary.

• 65 db limit when generators are running, measured at property boundary.

• A sound study would be required before construction, and a follow-up independent testing within 60 days of operations to confirm the facility meets the standard. Annual independent sound testing required.

• NOTE: These example noise limits assume a fairly quiet background noise floor of around 45-50 db. Should there be flexibility for louder areas? For instance, a location near a busy highway could have a background noise floor of 60 db or more.

Required annual reporting (Medium & Large):

• Energy usage.

• Water usage.

• Noise measurement at property boundary.

Backup generation requirements (Medium & Large):

• Hours and days when generator maintenance allowed.

• Example: Monday-Friday 8am to 5pm.

• Generators could only be used in the case of “sudden and reasonably unforeseeable events”, or reasonable maintenance. 

• If Diesel generators allowed:

  • Meet emissions standards at least as protective as EPA Tier 4 standards (as codified in 40 CFR Part 1039).

• If Natural gas generators required:

  • Meet emissions standards at least as protective as EPA Tier 2 for non-road large spark ignition engines.

  • Natural gas supply assessment from natural gas supplier.

• or Require long duration battery storage on-site, in place of generators. While a new and evolving concept, it is feasible for some installations.

Financial Compensation (Medium & Large):

• PILOT (Payment In Lieu Of Taxes) payment amount specified at CUP application.

• Electrical supplier franchise fee assessment/declaration required.

• Request a Property Tax Guarantee. Having a written commitment that the developer will pay the property tax revenues they discuss during the permitting process may help reassure the community that these benefits will materialize.

• Be creative. Open your mind to additional requests that can help your community.

Optional:

• (Medium & Large) Renewable energy standards requirement. NOTE: This also lowers water consumption at the power generation source.

• (Medium & Large) Financial impact study requirement.

• (Medium & Large) E-waste agreement to make sure companies will responsibly decommission/recycle electronics waste.

• (Medium & Large) E-Waste Bond, based on facility square footage, requirement. (Example: $1 per square foot)

• (Small, Medium, & Large) Expansion, or an increase in capacity, beyond original design requires new CUP application.

• (Small, Medium, & Large) Detailed plan to monitor and mitigate Total Harmonic Distortion (THD) in the data center and minimize any impact to the grid.

• (Small, Medium, & Large) Appearance/Aesthetics regulations. Be careful with your requirements. The data center should fit into the community, but balancing aesthetic considerations with operational needs of data centers is key.