Montgomery County passes a longer — and likely stronger — data center moratorium

The Montgomery County Council voted unanimously Tuesday to pass an 18-month moratorium on data center development, one that will supplant the current six-month pause and, likely, be harder for developers to challenge.

At-large council member Will Jawando thanked the few dozen residents holding anti-data center signs who cheered when the moratorium passed.

“It was clear. You all wanted to see a meaningful moratorium so that we can go through the tough issues: noise, water usage [and] tax rates,” Jawando said. “We don’t want to be first; we want to be right.”

This moratorium, which will go into effect as soon as County Executive Marc Elrich signs it into law, comes on the heels of a six-month moratorium he put into effect by executive order last month. That shorter moratorium was soon challenged by Atmosphere Data Centers, the California-based developer behind a proposed data center project in Dickerson.

It filed an appeal against Elrich’s moratorium earlier this month, arguing that he had overstepped his authority.

The council’s 18-month moratorium may be harder to challenge, since it went through the full legislative process, including public hearings.

“They can’t appeal it,” Council President Natali Fani-González told The Banner following Tuesday’s meeting. “It’s done.”

Atmosphere CEO Chuck McBride told The Banner in an email Tuesday that he is “disappointed” by the council’s decision.

“Throughout this process, we worked collaboratively with the Council and other stakeholders to demonstrate that the Dickerson Data Center Campus is a unique redevelopment opportunity and to develop what we believe would be one of the most sustainable data center campuses possible,” McBride said.

Dueling moratoria

The council in the past few months had considered competing moratorium proposals. Jawando wanted a two-year pause, while his at-large colleague Evan Glass had pushed for six months. The council’s Economic Development Committee saw 18 months as a compromise and advanced the proposal last week.

Residents and county officials worry that data centers will raise energy bills and contribute to water and air pollution. There are already at least four data centers in Montgomery County, according to the planning board.

The council on Tuesday also defined a data center: “a building or group of buildings, which has or is projected to have an aggregate monthly electricity demand of at least 25 megawatts, used to house computer or network systems, computer storage equipment, or computer servers to store, manage, process, and transmit digital data,” according to the bill text.

Some council members and Elrich have said their ultimate aim is not to shutter down or block date centers in the county.

“We are not going to do things that shut existing data centers down,” council member Dawn Luedtke said on Tuesday. “The fact that we already had data centers existing in Montgomery County, but had no definition of a data center in our code, was a big problem.”

And Elrich earlier this month said a moratorium will assure that if the county is going to have more data centers, they will be constrained by rules that protect the environment and residents. “I happen to believe it is possible to do them right,” he said.

In a July 17 letter to the council, Atmosphere Chief Platform and Sustainability Officer Chris Baughman and Terra Energy Senior Vice President Jeff Ferrel wrote that Atmosphere will bear the brunt of expenses associated with the project.

The company’s outlays will include a more than $70 million to build and fully fund a new on-site electrical substation, he wrote. “These costs are covered entirely by the project, not by Montgomery County taxpayers or electric ratepayers, and the future data center user will pay for all electricity the campus consumes.”

Zoning regulations

The council also unanimously passed a zoning bill Tuesday that, in addition to the definition of a data center, is intended to serve as a bridge between the moratorium and future regulations. Companies won’t be permitted to build data centers until planners and council members determine where in the county to allow them.

Fani-González, a co-sponsor of the zoning bill, said she is optimistic that state and county studies, both underway, will help local legislators make better decisions on regulating data centers.

The council will assure that a future bill “embraces our values to protect the environment and also to protect people who live in, work in and love this county,” she said.

Jack Hogan contributed to this story.