Plan commission recommends Portland not permit data centers

Data centers may not be allowed in or around Portland for the foreseeable future.

Portland Plan Commission on Thursday recommended the city not permit data centers within city limits or it 2-mile buffer zone. The recommendation moves next to Portland City Council, which meets Monday.

Portland City Council approved a one-year moratorium on data centers in July. Since then, Jay/Portland Building and Planning Department has been drafting regulations for such facilities.

Building and planning director John Hemmelgarn and assistant director Pati McLaughlin presented a draft ordinance defining data centers as “a facility or portion of a facility housing networked computer systems and associated components such as telecommunications equipment and storage systems used for remote storage, processing and distribution of data.”

The draft proposed allowing data centers in agricultural residential zones outside Portland city limits, with special exception use approval from Portland Board of Zoning Appeals.

Other proposals in the draft included specifications for setbacks, height limits, water usage, generators, noise levels, buffers, equipment, lighting, battery storage enclosures, building permit requirements and calculations for permit fees.

According to Environmental and Energy Study Institute, data centers support cloud computing, video streaming, artificial intelligence, cryptocurrency mining and other digital functions. As of March, there were 5,426 data centers nationally, surpassing other countries by the thousands, according to data from Statista. 

A 2023 report from technology, media and telecommunications group McKinsey & Company said U.S. data centers consumed 17 gigawatts of electricity the year prior.

“Do we even have the infrastructure here now that can support one of these?” asked plan commission and city council member Kent McClung.

Hemmelgarn noted recent upgrades to transmission lines. He recalled a conversation he shared with a solar farm representative, saying the representative had told him Portland is “prime for data centers.” He later suggested a possible location for a data center in Portland would be on the city’s northern edge or in a rural area near bigger transmission lines.

“(If) they’re taking that kind of power, they’re going to need probably a substation like we’ve never seen,” Hemmelgarn said.

Plan commission and city council member Matt Goldsworthy — he also teaches junior high computer science at Jay School Corporation — talked about school curriculum diving into artificial intelligence.

“Eighth graders have to take a class where we learn nothing but AI; that’s what I’m teaching all day long,” he said. “And it’s coming from the government — they’re wanting to start working that way.”

He later pointed out data centers can bring jobs, though others questioned how many jobs such facilities typically provide.

McClung asked whether the plan commission could prohibit data centers as a whole within its jurisdiction, with others confirming it could.

“I’m not a Luddite, I know these things happen, you know, you look at the history of the world,” said McClung. “You can’t stop the technology, but how do we do — this is moving so fast, it’s hard to get a handle on it right now.”

McLaughlin referenced a data center in Fort Wayne, which she said originally planned to have 36 diesel generators but has now upped that amount to more than 175. Another plan commission member noted data centers are often spread across multiple buildings.

“We are open to alternative energy, we’ve got solar panels, we’ve got windmills,” McClung said. “The proof is in our landscape, and, so, I think, you know, we might have data centers out in the country somewhere, but … I don’t see a place for a data center of this size in Portland if it’s going to be that huge.”

Goldsworthy noted the city could revisit the issue in the future. Plan commission members also pointed out plan commission’s recommendation Thursday doesn’t impact how Jay County government approaches the topic.

Plan commission members Ashley Hilfiker, Bart Darby, Jerry Alexander, Goldsworthy and McClung, with Steve McIntosh, Kyle Cook, Randy Geesaman and Ron Laux absent, voted to recommend an ordinance prohibiting data centers within plan commission’s jurisdiction.

Also Thursday, plan commission reviewed a draft ordinance with proposed regulations for small-scale battery energy storage facilities.

McLaughlin explained the building and planning department distinguished the difference between small-scale and commercial-scale battery storage projects, with 10 megawatts as the dividing line.

The draft also clarifies battery storage systems for personal use are allowed as long as they comply with manufacturer’s requirements and regulations.

McLaughlin pointed to Jay County REMC’s plans to implement battery storage units, saying their eight-megawatt sites would qualify as small scale.

The draft outlines regulations for zoning — they would be permitted in agricultural residential and industrial zones by special exception use approved by Portland Board of Zoning Appeals — as well as substation permit requirements, which are not regulated by plan commission or building and planning department. The draft suggests a $200 per megawatt permit fee for each small-scale battery storage site.

Commercial-scale projects, per the ordinance draft, would not be allowed within Portland city limits and its surrounding 2-mile buffer.

“I think it’s just something we have to deal with in the future, and we just want to be as safe as we possibly can with them,” said Hemmelgarn.