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Home My WebLink AboutAgenda 03-17-2026; 6-c - Discussion of Moratorium on “Data Centers” as a Land Use 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 17, 2026 Action Agenda Item No. 6-c SUBJECT: Discussion of Moratorium on "Data Centers" as a Land Use DEPARTMENT: County Attorney's Office & Planning and Inspections ATTACHMENT(S): INFORMATION CONTACT: 1) Overview of Potential Impacts from Large- John Roberts, County Attorney, 919- Scale Data Centers 245-2318 2) Presentation Cy Stober, Planning Director, 919- 245-2575 PURPOSE: To receive an overview of the impacts of data centers and discuss a possible 1-year moratorium on new data centers as a permitted land use. BACKGROUND: At the March 5, 2026, Board Business meeting, Commissioner Marilyn Carter petitioned to ask staff to prepare a presentation for the Board's March 17, 2026, Business meeting addressing the following: 1) The potential impacts of large-scale data center development in Orange County, including electricity demand, water usage, land use compatibility, environmental considerations, and potential impacts on residents' utility costs, and water quality. 2) Policy options available to the County, including, but not limited to, a temporary moratorium on data center development, revising the Orange County Land Use Plan and UDO, and the legal process required to implement each option. 3) Recommendation(s) for Board action. Commissioner Jamezetta Bedford asked that noise and environmental justice also be included. The County Attorney and Planning Director have prepared a presentation, with sources cited for reference, regarding the potential impacts from "large-scale data centers". The County Attorney also assessed two policy options available to the Board in declaring a moratorium on this land use, less than or greater than 60 days. There are differing public notice criteria for the two moratorium options. A pending amendment to the Unified Development Ordinance (UDO) to regulate data centers as a permitted land use may also be directed to staff, at the Board's pleasure. It is not possible to amend the UDO's text within 60 days due to the administrative requirements of Orange County's UDO. FINANCIAL IMPACT: There is no financial impact associated with this item. 2 ALIGNMENT WITH STRATEGIC PLAN: This item supports: • GOAL 1: ENVIRONMENTAL PROTECTION AND CLIMATE ACTION OBJECTIVE 6. Protect water supply/watersheds. OBJECTIVE 7. Conserve and protect high priority open space, including Natural Heritage sites, nature preserves, watershed riparian buffers, and prime/threatened farmland. OBJECTIVE 8. Include environmental stewardship objectives in the Comprehensive Land Use Plan. • GOAL 2: HEALTHY COMMUNITY OBJECTIVE 7. Invest in services and programs that improve the health and quality of life of the community (e.g., recreation and public open spaces, arts, etc.) RECOMMENDATION(S): The Manager recommends that the Board consider the following options and direct staff to take actions accordingly: 1) Direct staff to prepare materials for and give public notice of a legislative public hearing at the April 21, 2026 Board Business meeting to declare a moratorium on "large-scale data centers" for one (1) year; and 2) Initiate an amendment to the Orange County UDO to define and regulate "large-scale" data centers, inclusive of Artificial Intelligence Data Centers, Cryptocurrency Mining Facilities, Data Centers, Data Processing Facilities, and similar uses. 3 Attachment 1 General Definition of a Data Center A large group of networked computer servers typically used by organizations for the remote storage, processing, or distribution of large amounts of data. Source— Dictionary.com Environmental Impact of Data Centers • Data centers require large cooling systems to function, and these systems emit a steady hum that can disturb nearby residents. To address this, local governments are setting noise limits, often 65 decibels at the property line and 55 decibels in quieter or residential areas. How these limits are met is up to the data center designer, but common approaches include sound-absorbing or sound-blocking structures, berms or increased setbacks. Source — National Association of Counties • Communities living in close proximity (i.e., one mile) to EPA-regulated data centers have higher air pollution burdens compared to the national median (i.e., 50th percentile of air pollution). Source— Environmental Data and Governance Initiative • In particular, communities of color within one mile of EPA-regulated data centers face worse air pollution than other communities near data centers and the typical (median) community in the country. These trends are relatively consistent, but not as pronounced when considering state-specific averages. Source— Environmental Data and Governance Initiative • Low-income communities within one mile of EPA-regulated data centers do not have a statistically significant association with air pollution at the national level, but they do tend to face higher levels of nitrogen dioxide and diesel particulate matter (PM) than other parts of the states where they are located. Source— Environmental Data and Governance Initiative Land Use Compatibility • Not currently listed as a specific use in the UDO. • Staff must examine what land use categories are compatible with Data Centers. o Including Artificial Intelligence Data Centers, Data Centers, Data Processing Facilities, Cryptocurrency Mining Facilities. • Due to the high utility needs of Data Centers there are very few areas of the County that would be practical for such a use and a substantial impact is not expected in rural areas of Orange County. Electrical Usage Impact of Data Centers • Large data centers can span hundreds of acres and can have unique power and water infrastructure needs. Data centers can require large amounts of power similar to a medium-sized city, accounting for nearly 4.4 percent of U.S. annual electricity in 2023. In 4 Attachment 1 response to transformations in technologies including Al, hyperscale development across the country and new domestic manufacturing, the total national energy demand is estimated to increase 20 percent by 2030.2 This level of power demand can trigger the need for additional generation sources and new grid infrastructure. Source— National Association of Counties • Nationally, evidence suggests that large facilities' drains on electrical grid infrastructure leads to higher costs for residents. Water Usage Impact of Data Centers • Large data centers can consume up to 5 million gallons per day, equivalent to the water use of a town populated by 10,000 to 50,000 people. Source -- Data Centers and Water Consumption By Miguel Yanez-Barnuevo • Novel technologies like direct-to-chip cooling and immersion cooling can reduce water and energy usage by data centers. Source -- Data Centers and Water Consumption By Miguel Yanez-Barnuevo • Nationally, evidence suggests that large facilities' drains on water utility infrastructure leads to higher costs for residents. Policy Options Available to the County and Process Temporary Moratorium —Two options for moratoria, less than or greater than 60 days. Less than 60 days requires a legislative public hearing with more than 7 days advance public notice and may be imposed by BOCC majority vote/resolution. Greater than 60 days requires a legislative public hearing with notice of the hearing given once a week for two successive calendar weeks. The notice must be published the first time not less than 10 days nor more than 25 days before the date scheduled for the hearing and must be adopted by ordinance. Either option requires specific findings by the BOCC. Revising the UDO— During a moratorium the actual amendment to the UDO would go through the usual process for a text amendment, i.e., staff drafting and review, planning board hearing, review, and recommendation, BOCC hearing and decision. Amending the UDO with regard to data centers would be subject to downzoning restrictions such that Data centers could not simply be prohibited. For any use specifically eliminated, another use must be added. For example, "Data Center" over 20,000 square feet prohibited while "Data Center Local" under 20,000 square feet allowed each with specific descriptions. Recommendations for BOCC Action Manager recommends the BOCC — Direct staff to bring back to the BOCC a public hearing on a one-year moratorium on data center development for the purpose of developing appropriate UDO safeguards related to Artificial Intelligence Data Centers, Cryptocurrency Mining Facilities, Data Centers, Data Processing Facilities, and similar uses. w s r�— llq%��W-MMM. ORANGE COUNTY NORTH GAROLINA Item 6-c: Discussion of Moratorium on " Data Centers" as a Land Use 6 General Definition of a Data Center A large group of networked computer servers typically used by organizations for the remote storage, processing, or distribution of large amounts of data. ORANGE COUNTY NORTH CAROLINA 7 Air Quality Impact of Data Centers • Communities living in close proximity (i .e. , one mile) to EPA-regulated data centers have higher air pollution burdens compared to the national median • Communities of color within one mile of EPA-regulated data centers face worse air pollution than other communities near data centers and the typical (median) community in the country • Low-income communities within one mile of EPA- regulated data centers tend to face higher levels of nitrogen dioxide and diesel particulate matter than other parts of the states where they are located. �^ ORANGE COUNTY NORTH CAROLINA 8 Water Use Impact of Data Centers • Large data centers can consume up to 5 million gallons per day, equivalent to the water use of a town populated by up to 50 , 000 people. • Novel technologies like direct-to-chip cooling and immersion cooling can reduce water and energy usage by data centers . ORANGE COUNTY NORTH CAROLINA 9 Electrical Use Impact of Data Centers • Data centers can require large amounts of power similar to a medium-sized city, accounting for nearly 4.4 percent of U .S . annual electricity in 2023 . • The total national energy demand is estimated to increase 20 percent by 2030 . • Evidence suggests that large facilities' drains on water utility infrastructure leads to higher costs for residents . ORANGE COUNTY NORTH CAROLINA io Noise Impact of Data Centers • Data centers require large cooling systems to function , and these systems emit a steady hum that can disturb nearby residents . — Local governments are setting noise limits , often 65 decibels at the property line and 55 decibels in quieter or residential areas. ORANGE COUNTY NORTH CAROLINA 11 Local Land Use Compatibility of Data Centers • Not currently defined or regulated by LIDO • Due to high utility needs — namely water and power — there are very few areas in the county that can hypothetically support a data center • Staff must examine what land use categories might be compatible with Data Centers — Work must include Artificial Intelligence Data Centers, Data Centers, Data Processing Facilities, Cryptocurrency Mining Facilities — Distinction between "large-scale" and "local" data centers is likely needed �1 ORANGE COUNTY NORTH CAROLINA 12 Moratorium Options • Temporary Moratorium — < 60 Days • Public hearing may be held with one public notice 7+ days prior to the hearing - 60+ • Public hearing may be held with one public notice per week for two successive weeks prior to the hearing • First notice must be posted 25 — 10 days prior to hearing ORANGE COUNTY NORTH CAROLINA 13 Manager Recommendations • Direct staff to prepare materials for and notice a legislative public hearing at the April 21 BOCC meeting to declare a moratorium on "large-scale data centers" for one ( 1 ) year; and • Initiate an amendment to the Orange County UDO to define and regulate both "large-scale" data centers, inclusive of Artificial Intelligence Data Centers, Cryptocurrency Mining Facilities, Data Centers, Data Processing Facilities, and similar uses. ORANGE COUNTY NORTH CAROLINA