Data Center Zoning Debate Centers On Utilities And Community Concerns

A proposed set of zoning regulations for data centers drew concerns about noise, water, electricity and neighborhood impacts Monday night, while representatives of the company operating an existing computing facility in Hopkinsville urged Community Development Services to adopt clear standards without making future projects impractical.

The Sept. 28 hearing was the second public hearing conducted by CDS as it develops an amendment to the Hopkinsville zoning ordinance governing data centers. The latest publicly posted draft is dated Sept. 21 and remains subject to further review before being sent to Hopkinsville City Council.

The proposed amendment would establish local standards for data centers based on their size and electrical demand. The current draft divides facilities into small, medium and large categories and prohibits hyperscale facilities. It also establishes setbacks, screening and noise requirements; requires closed-loop cooling for liquid-cooled systems; addresses backup power and utility capacity; and requires decommissioning plans and financial security for removal of facilities that cease operating.

The latest draft defines a small data center as one with less than 5 megawatts of connected electrical load and less than 10,000 square feet; a medium facility as less than 20 megawatts and less than 20,000 square feet; and a large facility as less than 75 megawatts and less than 50,000 square feet. Facilities meeting either the 75-megawatt or 50,000-square-foot threshold would be considered hyperscale and prohibited under the proposal.

The proposed setbacks increase with facility size, with additional consideration given to surrounding residential, public and quasi-public property.

For residents who spoke Monday, however, the discussion was less about technical definitions and more about how data centers could affect the neighborhoods surrounding them.

One Christian County resident, said she was encouraged by changes made to the draft since the first public hearing but remains concerned about Hopkinsville’s existing data center and its proximity to residential property.

She said generators at the existing facility are approximately 100 feet from a resident’s bedroom and questioned how an industrial facility came to be located so close to homes.

She also advocated for larger setbacks and said she would prefer data centers be limited to heavy industrial areas rather than lighter industrial districts.

D.C., another Hopkinsville resident, similarly urged CDS commissioners to visit the area where a proposed 50-megawatt facility could be located.

Water consumption was another recurring issue during the hearing.

Cinnamon Watts, a Hopkinsville resident and founder of Lacey’s Legacy, said her primary concerns involve water consumption and the possibility that utility costs could eventually be passed on to customers.

“I still am not clear on whether or not my electric bill will be higher, whether or not my water bill will be higher,” Watts said. She also expressed concern about environmental effects.

Watts cited the experience of a friend in North Carolina whose water bill, she said, increased from $150 to $600 after a data center opened nearby. That account was presented by Watts as an example of her concern and was not independently established during the hearing as being caused by a data center.

Jackie Lincoln also questioned whether Hopkinsville has enough water and electrical capacity to accommodate additional data centers.

“We do not have the power grid nor the water capacity to do this, and you will find out going down the road that we do not,” Lincoln said.

Lincoln cited a figure of approximately 300,000 gallons of water per day while discussing her concerns. That figure was part of her public comments and was not established at the hearing as the expected water consumption of the proposed Hopkinsville facilities.

Another resident who moved back to Hopkinsville last year after living in the Nashville area, said the community’s small-town character was one reason she returned.

She said she opposes additional data-center development because of environmental concerns and what she described as potential pressure on natural resources.

She called for a two-year moratorium to allow additional research and to ensure the city meets standards and restrictions proposed by Kentucky Gov. Andy Beshear.

The proposed ordinance addresses those concerns by requiring utility documentation showing that a proposed facility can be served without adversely affecting existing customers. It also requires closed-loop cooling for liquid-cooled equipment and contains provisions governing water sources and infrastructure.

Stephanie Shakespeare, a Hopkinsville resident who said she was born and raised in the city, raised another environmental concern involving the area around Blue Lake and Jeffers Bend.

Shakespeare said she recently learned that a data center was operating near an area where her family and friends currently live.

“We kept saying, what is that noise? What is the humming?” she said.

Shakespeare also said she observed what she described as a film on Blue Lake and said fish were dying in a nearby creek.

“So is the data center using all the water from the lake and the creek?” she asked.

She said she wants greater transparency about what is happening in the community.

(Those statements were allegations and questions raised by Shakespeare at the hearing, not findings established by the hearing record.)

(In an Aug. 20 meeting of the Hopkinsville City Council’s Committee of the Whole, HWEA General Manager Melissa Spurr discussed Blue Lake and reported that recent testing showed the water had not been harmed by the data center.)

Thomas Masiero of Dark Horse Technologies, which operates the existing Hopkinsville facility and is proposing additional computing operations, said the company has participated in the zoning process since the first hearing.

The existing facility has operated in Hopkinsville for approximately three years. A separate proposal calls for a 50-megawatt data center. ( Earlier reporting identified the existing operation as a roughly 15-megawatt cryptocurrency mining facility at the Hopkinsville Electric System Holland Substation. )

Masiero said the scale and type of the company’s proposed facilities should be considered when developing regulations.

Masiero said the company’s largest proposed facility would be 50 megawatts, considerably smaller than the hyperscale campuses being proposed in other parts of the country.

He said the company’s proposed facilities would use closed-loop cooling. For the existing 15-megawatt site, Masiero estimated water use at less than 100,000 gallons annually, with most of that associated with restrooms and sinks. He said the estimate would be submitted in writing and reviewed by HWEA.

“You shouldn’t have to take anyone’s word for the answers,” Masiero said. “They belong in the ordinance, in writing, where anyone can check them.”

Masiero also said the company supports decommissioning requirements and has agreed to pay infrastructure costs associated with its projects, including a new electrical substation.

The company previously said it would cover the estimated $8 million to $10 million cost of a new 65-megawatt HES substation, with approximately 15 megawatts of additional capacity available to other HES customers.

Robert Ison, an attorney representing the company, told commissioners that his client supports industrial zoning requirements and performance standards for data centers but believes portions of the CDS proposal are unnecessarily restrictive.

He said the company supports standards involving cooling, on-site power generation, lighting, screening and decommissioning.

One of Ison’s objections concerns how the proposed ordinance calculates a data center’s footprint.

Ison argued that the city’s approach could include open areas between buildings and supporting equipment when determining which size category applies.

Ison also objected to the conditional-use process and argued that grid-served data centers that comply with the ordinance’s objective standards should be allowed as a matter of right in designated industrial districts.

“We ask that grid-served data centers meeting the objective standards of the final ordinance be permitted as a matter of right in the defined industrial zone areas that the Commission has identified,” he said.

He also questioned a proposed requirement that an applicant demonstrate its electrical load would not adversely affect the cost of electric service to other customers.

Ison said the applicant cannot control electric rates or availability because those decisions are made by HES.

Concerns about electricity have been part of the local discussion since the first hearing.

The proposed ordinance would require documentation from utilities showing that a proposed facility can be served without adversely affecting the availability, reliability, quality, cost or safety of service to other customers.

Residents, however, continued to question whether additional demand could ultimately affect utility customers.

Watts said that uncertainty remains one of her primary concerns.

“I still am not clear on whether or not my electric bill will be higher, whether or not my water bill will be higher,” she said.

Several residents framed their objections around larger environmental concerns.

Andrea Santos-Rickard, a Hopkinsville resident and candidate for the Ward 11 seat on Hopkinsville City Council, said residents have concerns based on what they have heard about data centers in other communities.

“Water pollution is a real concern,” Santos-Rickard said. “On top of the fact that water has always been a concern for people in our communities, but then adding on on top of a whole other data center and the way it functions, there’s definitely concerns for the people in our community.”

Her comments were statements of concern at the hearing, not a finding by CDS that a Hopkinsville data center has caused water pollution.

Nikki Chambers also urged residents to distinguish between information that has been independently established and claims circulating about data centers.

“A lot of misinformation is being given concerning data centers,” Chambers said, adding that residents should seek information directly from utility officials when questions involve water or electricity.

Chambers pointed to HWEA General Manager Melissa Spurr for water-related questions and HES General Manager Jeff Hurd for energy-related questions.

Noise was also a repeated concern among residents.

The proposed ordinance would require data centers to comply with the city’s existing noise standards rather than establish a separate numerical noise limit specifically for data centers.

Masiero said the company supports noise limits measured at the property line and said its proposed closed-loop cooling system would be quieter than the air-cooled equipment at the existing facility.

The draft also includes screening requirements designed to limit the visual and operational impacts of facilities on surrounding properties.

Decommissioning provisions would require a plan for removing a facility if it ceases operating, along with financial security intended to ensure the city is not left responsible for cleanup costs.

Masiero said the company supports those requirements.

Another important provision concerns facilities already operating when the regulations take effect.

The current draft would allow an existing data center that is already operating or has begun construction before the amendment takes effect to continue under legal nonconforming status.

That provision is important because Hopkinsville’s existing cryptocurrency mining operation predates the proposed zoning regulations.

For residents, that facility has become a reference point for concerns about noise and proximity to homes. For the company, its three years of operation are evidence that data centers can operate in Hopkinsville while being subject to local oversight.

K.M. said she believes future facilities should face stronger location restrictions.

“I would consider relegating them to heavy industrial only, not light industrial, and I would recommend increasing the setbacks,” she said.

For residents, the discussion remains centered on protecting neighborhoods and ensuring that water and electricity demands do not create problems for existing customers.

For the company, the focus is on establishing predictable standards that distinguish smaller, grid-served facilities from the hyperscale campuses driving much of the national debate over data centers.

CDS will review public input and continue developing its recommendation before the proposal moves to Hopkinsville City Council. The council ultimately will consider the zoning amendment.

Data Center Zoning Debate Centers On Utilities And Community Concerns

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