Denton City Council held its first public hearing on whether to implement a moratorium on new data center development in the city during its Sept. 22 meeting.
Denton residents spoke during the hearing, which is the first of two public hearings as part of the moratorium process.
“It’s important to hear your voices,” Denton Mayor Chris Watts said. “It also helps us, because we’re up here trying to make decisions to better the community.”
During the same meeting, Denton officials said Core Scientific, one of two data centers in the city, previously requested to lease more public land from Denton Municipal Electric, the city’s public power utility operator.
Some context
The city is required to hold two public hearings as part of the moratorium process, which is a temporary pause on accepting or processing new development applications, according to previous reporting.
Those who are for the moratorium cited the long-term effects of data centers in the community and the strain on the electric grid, while those who are for continuing the expansion of data centers cited the financial benefits, such as the increase of property tax value.
According to previous reporting, the city of Denton saw a $3 billion increase in property tax value stemming from data center development.
“We don’t have longitudinal studies [on data centers],” Council Member George Ferrie said. “I don’t know a 20-year impact on air quality because they haven't been this dense, this present for two decades.”
Before the public hearing began, Watts asked if the moratorium applies if a data center wants to expand or if it requires additional land to fulfill the terms of their agreement with the city.
Mack Reinwand, the city’s attorney, said that question will require additional research into what that data center’s project is and what the plan included when it was submitted.
“A moratorium being passed does not necessarily stop an existing project from being built out,” he said.
Core Scientific currently operates a data center in Denton with 391 megawatts of electrical capacity and Qumulus AI will have 20 megawatts of electrical capacity when it is in operation in 2028, according to a presentation from Charlie Rosendahl, Denton’s director of development services. The Qumulus AI data center has not started construction yet, Rosendahl said.
DME Assistant General Manager Chris Lutrick said at the meeting Core Scientific requested to lease more public land just south of its current facility 3-4 months prior, though he said it was not disclosed how that land would be used.
“What I do know is in the [power purchase agreement], they’re limited by their megawatt consumption,” Lutrick said. “They have not got there, and those limits are controlled by the Electric Reliability Council of Texas. They have not requested any additional power beyond what’s in the PPA.”
He added that Core Scientific had to go south to a private residence to rent land just to park its contractor vehicles. Lutrick said that Core Scientific officials know about the land swap the city approved with a transfer station in that area and said that if land became available, they were interested in leasing it.
“They never mentioned another data center or anything of that nature,” he said.
Rosendahl said the city is not having any discussions about future data center development at this point since the moratorium process is ongoing, and Interim City Manager Cassey Ogden said Core Scientific had not reached out to the city about leasing more land.
Rosendahl also said during his presentation recent studies show that Denton’s electric transmission system already was running near its limits, even before the large data center developments came online.
Zooming in
On Sept. 21, Gov. Greg Abbott said Texas environmental regulators must stop issuing new permits for data centers, according to previous reporting.
His order expands an existing pause on data center development in the state and stops new data center permits while ERCOT, which operates the state power grid, conducts an audit of proposed data center projects.
“The process for the electric connections requires an interconnection study,” Rosendahl said. “Those over 75 megawatts require ERCOT approval, which the governor does have a directive on right now regarding ERCOT and the need to analyze anything above 75 megawatts in more detail.”
The backstory
Denton City Council members unanimously voted to start the legal process for a moratorium on the development of data centers in city limits at the Aug. 18 regular meeting.
The discussion to start the legal process for the moratorium was broached with a two-minute pitch from Mayor Pro Tem Nick Stevens May 14, and council members approved the pitch June 2.
The start of the legal process means Denton City Council must hold two public hearings with notice to gather community feedback, then council members will vote for or against a 90-day moratorium on new development and permitting for data centers.
Looking ahead
Once the public hearings are held, Denton City Council will vote on passing the moratorium as early as Dec. 2, according to Rosendahl’s presentation. The next public hearing is scheduled for Oct. 27.
If the resolution passes, all new development and permitting for data centers in Denton city limits will be halted effective immediately.
City officials can also vote to extend the moratorium another 90 days at the end of the original 90-day resolution.
Hannah Norton contributed to this report.
