Council Begins Process of Banning Large-Scale Data Centers

It’s the perfect moment for an easy vote. The Austin City Council just came through a tough budget-writing process. It’s only weeks removed from the controversial decision on the Dog’s Head development. Taking a vote to ban large-scale data centers must feel quite comfortable by comparison.  

And banning large-scale data centers is definitely the plan. As Mayor Kirk Watson said at Tuesday’s work session, “It’s pretty clear what we’re hoping to see.” Watson opened the conversation by referring to recent Council message board posts, including one of his own, stressing that data center approvals in Austin’s extraterritorial jurisdiction should be frozen until Council finalizes a policy on their development. A post from Council members Vanessa Fuentes, Ryan Alter, José Velásquez, Zo Qadri, and Mike Siegel took the sentiment further, stating they are “committed to ensuring that Austin does not allow a single large, ‘hyperscale’ data center within the City limits.”

State law forbids Austin from simply banning data centers overnight, however. Joi Harden of the Austin Planning Department told Council that a data center ban will need to be executed through the city’s zoning process. That process would allow opportunities for public comment and conclude with Council amending the city’s Land Development Code, which currently does not even define the term “data center.” Council pushes the proposal forward today, Aug. 27, with a vote directing City Manager T.C. Broadnax to begin crafting amendments to the LDC for Council consideration. Harden told the CMs the process could be complete by spring of next year. 

Harden also ran through a presentation with the now-familiar reasons that large-scale data centers are causing such an emetic backlash – they consume obscene amounts of energy and water, give off sound and light pollution, and are housed in ugly industrial buildings. She and Austin Energy’s Stuart Reilly said the city is currently providing electricity to a handful of small data centers of 20 megawatts or less. These are not to be confused with large wholesale data centers, those using between 20 and 100 MW, Harden said, or the hyperscale data centers, the thousand-acre facilities consuming more than 100 MW. 

With the presentation complete, the Council members offered comments. Alter noted that the increased electricity use would increase the state regulatory fees that are a portion of everyone’s utility bill. 

CM Krista Laine agreed with the call for a ban on hyperscale data centers within city limits, suggesting Council also consider banning the not-quite-as-large centers using between 20 and 100 MW. She asked Harden if there is a plan to bring surrounding jurisdictions into the hyperscale conversation, insofar as electricity and water are ultimately shared resources that can be drained by any city or town in the area. Harden assured her the city will be talking with neighboring entities. 

CM Marc Duchen brought nuance to the discussion as well, revisiting the idea that the city currently has roughly 10 data centers, each using less than 20 MW of electricity. He pointed out that some of these are not commercial data centers, asking whether they should be subject to the same rules. 

“I appreciate that we’re moving in this direction of prohibiting large data centers or hyperscalers – and I agree with that position wholeheartedly,” Duchen said. “I think the real challenge is going to be hashing out where do we draw the line? Is it going to be at 70 MW?”

Wrapping up the meeting, Watson emphasized that whatever plan the city comes up with must have no exploitable loopholes. Fuentes, Alter, Siegel, Velásquez, and Qadri then walked over to the City Hall media room for a press conference on the issue. 

Fuentes told reporters that data centers have raised electricity rates in Virginia and contaminated wastewater in Wyoming. Alter took up the argument, saying, “We don’t want them to come here and make our electricity more expensive. We don’t want them to come here and suck us dry when we’re already in drought.” Velásquez said he fears that if large data centers come to Austin, they will be built in his District 3, extending the neighborhood’s legacy of environmental racism. Qadri said banning data centers is consonant with Austin’s values of  mitigating climate change, advancing equity, and ensuring the city remains a desirable place to live.

Siegel framed the issue through the perspective of class. “When we are jacking up electric rates and water rates, when we are driving up land prices to purchase these facilities, when we are negatively impacting people’s quality of life with noise and vibrations and light and other negative impacts, who are we doing this for?” he asked. “Fundamentally, this is to benefit the billionaires, the very few. It’s not to benefit humans.”

Editor’s note: We originally stated that Wyoming drinking water was impacted by data centers. The state’s wastewater was contaminated. We also stated that the costs of developing electrical infrastructure for large-scale data centers would be passed on to Austin residents. Austin Energy actually requires data center developers to pay 100% of costs upfront for the infrastructure. The Chronicle regrets the errors.

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