Fayetteville to weigh data center regulations
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Fayetteville City Council is expected to consider next week tougher rules that would require Planning Commission approval on future data centers, the Fayetteville Flyer reports.
Why it matters: Arkansas has made itself attractive to data centers through tax incentives and utility law changes, seeing them as economic development prizes.
- Cities and counties are meanwhile trying to protect utility customers, water supplies and local control.
State of play: Five data center projects have been announced statewide, with two under construction, per Arkansas Advocate.
- The list includes AVAIO's $6 billion Pulaski County campus, Google projects in West Memphis and Little Rock, Serverfarm in Clarksville and an unnamed Conway proposal.
The big picture: Data centers can require massive power and water, but often produce fewer permanent jobs than manufacturing.
- They may add "a few hundred jobs rather than a few thousand," University of Central Arkansas economist Jeremy Horpedahl told THV11 in May.
Some people opposed to the projects worry they could increase electric rates for residents.
- Horpedahl also said electricity prices could rise by about 1% to 1.5% in total — not annually — while noting that data centers typically pay for infrastructure upgrades.
Between the lines: NWA is not yet a hub for data center projects. Northwest Arkansas Council CEO Nelson Peacock told the Northwest Arkansas Business Journal in February he was not aware of any planned for the region and said NWA is not recruiting them because of the tradeoff between "resource consumption and job creation."
Zoom in: Fayetteville's proposed changes to rules regulating data centers include water and electricity impact reports, cooling restrictions, generator guidelines, setbacks and buffers.
- "Our code related to data centers is already strong. And it's important we continue to update it to keep up with the changing reality of this technology," Mayor Molly Rawn wrote in a recent social media post. "We've drafted legislation ... that strengthens city code when it comes to data centers as our utility customers, even when outside city limits."
Flashback: Fayetteville recently went through a public fight over Swarm Aero, a defense drone maker near Drake Field, after city planning staff classified it as a by-right industrial use — allowing it to open without rezoning.
What they're saying: The city is "not anti-technology," but wants to make sure one large customer doesn't raise costs for everyone else, Fayetteville Council Member Mike Wiederkehr told the Flyer.
- "This is that classic 'everyone pays their fair share' model," he said.
What we're watching: Arkansas' 2023 Data Centers Act complicates local action. The law references data centers, but focuses heavily on cryptocurrency mining, leaving cities unsure how far they can go before triggering a legal or state-preemptive fight.