C (4:31)

Yeah, I am in the epicenter of the data center debate. I'm in the eastern panhandle of West Virginia. I'm side that Loudoun Fairfax county corridor where these have all emerged. If people were to go to Google Maps and they were to look at where the Dulles airport is, you could start to go away from the airport and you can begin to see kind of the air, the industrial stuff you would expect around an airport. And then because of the demand of housing, you can begin to see the housing development occurrence. What we've seen over the last couple of years here is everywhere there's been a hole in between those housing developments. Everywhere there's something along a corridor. These data centers have emerged and they're prolific in this area. I didn't know why. I thought it was because we were Washington D.C. and this is where all of that stuff would be. In fact, it was that this area of the country has or had a lot of electrical capacity. We have power plants that have been built, so there is lots of electric capacity. So what I'm learning from these data centers is that they come in and they are giant warehouses. It's a new zoning category. So where do they kind of go? They're not a warehouse, they're not a factory. They don't have the traffic to them, but they do consume a lot of water and they consume an Enormous amount of electricity. And then they have generators and such so they can create noise and all those pieces. So that it has become a giant debate where I'm at in the country. And I'm starting to hear more of that as we're talking to our local conversations and during as strong towns anything. More and more members are asking questions about these data centers because they're coming in as these new economic development projects. They can go in brownfields, they can go in places that maybe you don't have the transportation system. But there are some real drawbacks that are emerging. And I think the power one in this article, it helps me to understand this a little bit more. So I don't know, Abby, on this. I'm seeing kind of two things that come out of this that are really worth talking through. One of them is the zoning. How do you zone these? This is kind of like an alien thing coming to a community. It doesn't fit one of our fancy letter zoning categories. It's such an emerging thing. We don't know what to protect against. And then there's this other thing with utilities, the fragility of our utilities. This is like the amount of energy, the amount of water that this thing that one of these centers needs and they all cluster together so that they need is like a hundred times that of a suburban subdivision. So like, how do you deal with that in these suburban edge condition areas?

B (7:48)

Yeah, it's really pretty fascinating when you think about kind of the cost of use for these types of, you know, land uses. Because when we look at a subdivision, it's more of a physical cost of use in terms of the inefficiencies. We can see the large lots and how much infrastructure, streets, pipes that, that it requires to make up. And we can kind of look at the costs that are associated with that development pattern. This is a development pattern where it's not really, you know, it's not really based on necessarily the inefficiencies are not rooted in like the physical, you know, sprawl of infrastructure per se. It's more so the cost of electricity, which is, it's kind of hidden in a lot of ways. And right now the model is really set up in a way that kind of socializes that cost amongst all rate payers, which is something, something that I didn't realize before. And it makes you think, you know, what are the repercussions of that. I do have a lot of questions also about land use implications. You know, I've worked in places where data centers are being Implemented in pretty urbanized conditions in addition to greenfield development. So it seems like, you know, data centers are this new emerging land use type that they really can be inserted into like older buildings, in some cases like large warehouses that used to be used for something else. And I've seen that happen. But you also see kind of these large industrial expanses kind of on the outskirts of town. I'm curious what you're hearing from some of the conversations amongst Strong Town's members.

C (9:47)

Yeah, well, there are various concerns that are being raised. Most of these are coming in as economic development projects. And as soon as we hear economic development, for many of us that experience has been let's subsidize for promise of the future. That never pans out. What's really interesting with these data centers is as a municipality here is something that's going to come into your community that you only really have to have fire and EMS attend the building once there's nobody in it. So nobody other than the construction. You don't have any people driving on your streets, so you don't have any rush hour traffic. These data centers have all different types of level of security and they have all these type of fire suppression areas. So these are, I would liken them to the 22nd century version of self storage. I mean this is where all of our iPhone photos are at. This is where all of our Word documents in the cloud are being stored. This is where our credit card data is moving forward. And then there's like this virtual manufacturing. All of that stuff that we have in the world that we're getting for free. The free Gmail and Yahoo accounts are being funneled through here and AI is scrubbing that and figuring out what the next thing to feed to us. So all of this is kind of occurring there. When they come to town, they get built. The fire department goes in once to see where things are in the building. But the fire suppression and all of this stuff because the data is so valuable, there's nothing really that would burn here. There's nobody in the building that's going to have a heart attack. So it's not a strain on your services in that regard. And all the things that we would think through development and then when you look at the money that's put into this, so not only you have the building, but all of that equipment in the building, these are giant cash cows for many of our communities when it comes to the land value that's being created from it. So you're being funded through property tax. They generate a lot of property tax. If you are charging for equipment on a site and you evaluate to that, there's a huge tax benefit off of it. So imagine as a city or a county, one of these centers come in, we're going to tell you we're going to develop a large area or redevelop a site, and you don't have any responsibility, you don't have any liabilities really as a municipality to do development. And by the way, we're going to pay you lots and lots of money in taxes. This is what's really interesting with it now, what it's exposing in this. If you figure out they get put in a place that works, that doesn't disrupt the neighbors, and you've kind of followed through those things. What this article starts to point out is the things you don't see, the things you and I would would just get as a letter in a development review application, it when we come to the utility company, the power company, other than a few jurisdictions around the country, that is a private entity that is obligated to provide a service to anybody that asks within certain distance of their power lines. So as planners and development reviewers in city hall, you get some sort of letter in the. In the building permit process, the power company says, yes, we can provide service. It's part of your electrical inspection when you build a building that those inspectors come out. And if you've done any rural development, you know that if there's a power line on a road within so many feet of that, the power company has to provide you power. So, like in our planning decisions at city hall, we would never look at electricity. We just assume it's going to be there. So this is something that, for me, it's showing the fragility of one of our core infrastructures that we all take for granted as almost as if the air around us is its equivalent. And what is really interesting is all of the things we've done for consumer protection so that we're not gouged with high electric bills. That works when we're incrementally adding onto the system. What's happening here is the gigawatts of consumption is working at a pace faster than we can build power plants. And it's requiring more expensive power, which our consumer protections are now working against us.

B (14:56)

Yeah, yeah. And kind of drawing on the perspective of a planner who may be reviewing this as a development application, you're right. They're not necessarily looking into how that affects the rate structure of people around the data center. I mean, we're looking at trees.

C (15:20)

But like hey, let's look at the energy consumption of this and, and we're going to talk about it in terms of 10 and 100 times any other use that you could imagine in your community. I've been hearing in the news other stories about know we have a fragile network, a fragile power grid in this country. The some of the latest AI investments in this country. Some of the factory development like Apple announced their big investment of their data center and it is going to have its own power plant as part of it. I think this is. And again could you imagine Abby, like how would you permit a power plant in an urban location not to mention the types of power that would be available. Like I've heard the science of these little tiny compact nuclear facilities. I think they've test, they want to test them in different cities. Imagine that discussion showing up at a public meeting. Hey, I'm a planner. I know lots about land uses of residential, commercial and by the way, here's our special application for this extra use, this variance for a nuclear reactor three blocks from your house.

B (16:40)

Yeah, I have a feeling that wouldn't go over well. And there's so much that I'm thinking about because something that I did have on my mind is as retail is becoming, you know, not, not as strong as an industry, a lot of retailers are closing. I wonder if some of those buildings may lend themselves to becoming data centers in certain instances, especially old big box stores. And that certainly would be controversial to put a nuclear reactor inside one of those buildings to power, to power the data center. That would really shift that use to probably being in the middle of nowhere. And that may have all its own implications.

C (17:27)

Imagine if we could even get a solar array big enough like to stick down on the roof for the lot next door. Yeah, I mean for me this is like, this is so fascinating because when we think about planning and zoning has been set up the last eight decades, most of the operating system that you and I have experienced are things that were really developed in the first 20 years of Euclidean zoning. Like there have not been a lot of new emerging uses. They've been points where it's like, oh, we need to adapt. Like the drive in theater doesn't happen anymore or the rooming house. Like those things that existed, like maybe those are in our zoning code but are obsolete.

B (18:19)

And I see obsolete things in zoning codes all the time that you just, you know, blacksmiths, just things that, that carried over from a long time ago.

C (18:30)

But how do you, how do you deal with this and even in terms of, of zoning, when we think about all of the noxious uses, I mean the whole purpose of zoning is to separate the factory on the edge of town. Yeah, they're going to be generators that run and these sorts of things, but that we can kind of correlate maybe with some of our industrial uses. But like in my community right now there is a huge battle with aerial power lines. So the big monster arrays, the things on the big hundred foot towers that shadow the countryside, this is happening, these are coming, this infrastructure is being put through our county to support essentially data centers to extend, broaden the grid. So yeah, for this facility, it's nice to need around maybe we hear the generators go off, but the power that's servicing this is coming from a power facility many, many miles away and their rural and even some suburban communities that are now providing that are miles and miles away that are being impacted by this land use decision. And they're not in eyesight or tax capture or job creation of this at all.

B (19:55)

So I wonder what the implications would be of shifting the cost to data centers because you mentioned all these tools that we're using for free. You know, there's broadly, there's access to a lot of, a lot of tools like Google Gmail, but also AI tools that have become more and more prevalent over the past year or two. And yes, we're quote unquote using them for free. But I do wonder if that changes the whole business model of technology and these sorts of uses. You know, technological uses. If data centers were to take the whole cost of, of, you know, building their own generators and nuclear power plants or paying more to the utility companies. I, I'm curious if you think that would actually impact what we experience as users of technology if we would start needing to pay for certain uses?

C (21:04)

Well, on something like this, like maybe there is a cost benefit or in the business model stability in your product line. If you're doing your own power generation and power generation companies are doing that like energy is something you can make money off of. So if you made enough for this, do you make enough to supply externally? So you could see that as a commodity that you're building. And that makes us, that makes sense for these. But these centers that want to lock into the existing grid, this is where I find this really interesting. And let me put this in turn. It's hard to talk about electricity and all of the things with that, but because not many people have dealt with those pieces or dealt with the power company and the public services commission with that or really understand all the protections we have. So they're not big energy spikes or the 20 years it takes to permit a type of plant. But many of us have been in communities that have had a similar infrastructure shortfall when it comes to water and sewer, where in your community, the community grew so fast the water plant is over capacity, or because of decision making that occurred, the sewer plant is undersized for the community and it's discharging raw sewage into the waterway. And cities are forced to institute growth moratoriums. And in those systems, like, that's a struggle, too. Like, in a community, when you look at your utilities, we assume that the connection fee that we pay to connect to the pipeline, whatever the developer paid to extend the pipeline, whatever we pay every month, we assume that that's going to cover all of the costs to maintain and upkeep that system. And there are countless stories of cities all across North America where they may not say they're insolvent or. But they also are not fixing the pipes at the rate they need to fix them. So in a community like, if you were to go at a state level, this story is coming out of Pennsylvania at a state level, if they were to do an analysis in a community and say, oh, we don't have enough capacity at our water treatment plant, we need to build an expansion to the plant, it's going to take us two years to do that if we find the money to do it. And in that time, we can't issue any more permits to expand our community. If we think about the power grant at the state level, what happens when the state says, okay, we're out of power, we have to limit development. And it wouldn't just be limiting development on data centers, it would be limiting development on houses, which is a critical need on retail electric charging stations for cars and buses. I mean, this just shows how fragile our system is. And if we went to a lot of these communities said, hey, you know, all of that growth Ponzi, you've started, you know how we're in musical chairs and you continue to grow and you've bonded out the expansion of your utility systems, and you build all these big roads for development and you come in and by the way, because we've issued permits for six data centers, we don't have the power for you, so you need to pause construction for five years. I mean, the implications of this just scares me to the bone.

B (24:57)

Wow. Yeah. That's fascinating. And the fact that from the utility company side of things, you know, energy Companies are also expanding infrastructure to support these uses. And while there is kind of more of a direct cost that gets passed on to the utility users, it does make me think about how maintenance, long term of the system works. I mean, is it is deferred maintenance an issue for energy companies or is this a situation where they, they can correct by passing on cost to users of the utilities? Which that would mean that not only is the use of electricity getting socialized among all users of the electrical system, but how does that work with the kind of the long term maintenance of all these new systems that are being established?

C (25:59)

And again, I'm going to go back to the utilities. None of us are going to advocate for our utility bills to go up right like this. And the example that I came across in the last two years is out in Norman, Oklahoma. Norman, Oklahoma has a fascinating community for all different types of case studies. In Norman, Oklahoma, their water and sewer service is controlled by the city, but because it has been related, so it's Oklahoma. All their cities are huge, the way they do their city boundaries. So Norman is in the teens of the largest city by area in the country. But it's urbanized area is only a small portion of the county or of the city. And in the city, if they want to increase water and sewer rates, that has to go out for a public vote of the people. So of the folks within, imagine if you. And the reason they did this really fundamentally is a way to control growth. So if you are a resident in the rural part of the county and you're on a well and septic, you get to vote on this because it's a public referendum. And if you don't want to see growth and you don't want to see expansion and you don't want to connect up to the public systems, you're going to vote no. If you're a ratepayer, if you're paying this stuff and you're being asked, do you want to pay more for sewer? No, I don't want to pay more. My budget's tight. I am not making enough money to cover what I currently have. A similar thing is happening with the consumer protections we have on their utilities. And it's way more complicated because while a sewer plant may be something localized to a city or to a county, a power plant is a multi state piece that goes to the federal government. The nuances of all the different powers we have is a lot of specialties. And like we've seen with water and sewer in many of our cities, we've not expanded at the rate equivalent to our growth. We've also not reserved the money to upgrade all of our systems. So now when we look at this, if we've not been growing that we need to in that fashion, if we've not planned for those components, then we're behind. And if we're behind year after year after year, if we don't want to see that type of, if we've decided as smart citizens that we're going to under 1% every year, that compounds. We are now at the point that two things are happening. We're behind on our maintenance and upgrade of the system and we're at peak demand. So we have whatever we have to get up so that we are solvent today, and we have whatever we need to operate safely today, and then whatever that immediate growth we need. And yeah, this is why it's driving up these prices. And in a lot of this, the only way you can drive up price, the way we set these systems for consumer protection is that we've identified we need to expand the production of the energy or the demand has reached that and we protected it. So if you and I plug into the system, it's not a big charge, but this is now beginning to hurt us.

B (29:56)

Right? It's, you know, you're not going to put the, you're not going to put Pandora back in the box, so to speak, in terms of the technology that's being used, unless it's, unless it's just a complete, you know, it becomes completely unfeasible to, to utilize these tools that we have. But I think the more likely direction is that there's going to be more and more pressure put on data centers to find other ways to create energy to support this. And it does make me wonder if this is how, how we pivot to nuclear power and other types of power specifically to support data centers.

C (30:43)

Yeah, I talk about, when I talk to cities, one of the things I'm learning now from incremental developers. So if I boil it down to things that I can understand and work on, there are a lot of incremental developers working in the heart of our downtowns and they want to build where a house once existed or where that empty lot is in a neighborhood. And they go to the city and they get all the building permits, and then they go to the utility company and they get to the utility company, they get hit with this zinger that there's no utility capacity or they've got to upsize the pipe in the middle of the street and that it doesn't matter what the cost is, other than the cost exceeds what they can actually afford to do to generate revenue to make a project feasible. What's happening here is the same thing, but at a larger scale. If we really need this to save all of our photos to be the top of the technology to take us wherever this is taking us in the world, we're going to have to start looking across the country about where we have that electrical capacity. So when I talk to cities and they have these beautiful master plans to infill downtown, many times they don't talk to the utility company to figure out where capacity is in the downtown. What I suggest is they look at their sewer capacity and maybe the areas where they have sewer capacity are not the places they are actually doing their master planning. And in fact, they should actually go where there's sewer capacity first. Kind of work through on this. Just like where I'm at in Loudoun, Fairfax county, these are occurring here because this is where we have electrical capacity and they're sucking it up. I don't know where else in the country we have that. And maybe in the short term it's not about moratoriums, but actually directing people to where that is at and where or where somebody could build their own power facility with the least amount of resistance. And that's where maybe we should be directing some of this in the short term.

B (33:05)

Yeah, absolutely. I'm actually looking this up right now because I'm curious. And the top regions that align with the capacity question is Northern Virginia, Phoenix, Dallas, Fort Worth, Las Vegas and Atlanta. It sounds like those are the areas in the country that will probably see fast growth in this sector. But there's a number of other cities in this particular article that I, I pulled up here that are listed. So I'm guessing that, that each of these regions will be needing to address the energy cost question and in their own ways, and they may come up with different solutions. But ultimately, when it comes to, you know, by state, by state needs to address these, the cost and the rates associated with infrastructure. I do wonder if this is something that really will move quickly enough to address this emergent technology and land use.

C (34:17)

Right now, I don't think it is the planners. I don't think the planners consult this.

B (34:25)

No, I don't think so.

C (34:26)

Laying a new color on your zoning map is going to solve this, I think where it's going to be and this is where the planners can help influence it. It's going to the public service commissions, it's going to the state level of figuring out how energy rates are set, the amount you pay, and the states that have the ability to process the new energy producing facilities, the new energy plants are going to be the ones that will be more ready for this type of thing. And I'm telling you, these are the big shiny objects that every economic development office across the country wants because of all the tax base and the limited liability, the limited infrastructure requirements on the ground for a municipality. So it's kind of like, hey, these are big wins. And all these centers, the data that's happening in Phoenix is also duplicated in Loudoun county. Like it's moving through. So it's not like a proximity where you have to have the widget factory next to the widget trucking company. So the planners and the thinkers that get up at how we go through this, I don't even know like if one of these centers came online, could they even, could the state even accept a check or the power company accept a check to do an expansion to a facility or that be in violation of some of the laws that are laid out? That that's the type of stuff I'd want to walk through and figure out. How could we deliver this need so quickly? Because it's going to be a really tough conversation in with communities. We say, oh yeah, by the way, our great economic development projects that are occurring have capitalized and utilized all of our electrical capacity and we're happy to have you build, but we can't have you plug in. That's not something we can deal with at a local level. I mean, I don't, unless every city starts their own little power plant. And I just don't think we could do that at scale.

B (36:49)

Right, right. Like is, are there other alternatives even not just from the data center side, but from the city side to, to address, you know, the energy, the need for energy. It's, you know, I feel like this is something that it's, it's a little over my head in terms of the specialization of how, how these things work. But it, I don't think that the issue is going away and there's definitely this strong towns overlay discussion on it even beyond the land use, just the hidden costs of our new technological advances and all these, all these things that we're, we're integrating into our daily life. And it's, it's just something that I think is going to keep, continue to be a challenge for, for people.

C (37:49)

It, it really demonstrates on the energy consumption a giant leap because it's requiring communities to like I, as somebody that's done design work, I could make a data center fit in somewhere and meet all the rules, because there are boxes and that. But the inputs to it that are external to our control as a municipality, such as power, is that unknown. And I hear there are lots of people opposed to data centers. There's lots of groups out there as they're coming forward for a whole host of reasons. What this story really points out is right now where I believe the Achilles heel is for data centers, and really looking at that piece, and it should open our eyes up that this type of fragility within our power grid is also reflective in our water and sewer systems and our roadway systems and our communities. So when we look at these things, there's probably lots of people listening to this that have never heard of a data center. They're never going to see it in their town. What I will tell you is this discussion is the same discussion at a local level as happening with your water and sewer systems, and those are systems at a local level. You actually have control of that. You have the ability to make an impact on and help people think through it and try to get ahead of this at that level. But, yeah, this is a really big deal right now. There's a lot of emphasis at a federal level to get more of these data centers out. And what are we going to do if we can't get the electricity to them?

B (39:41)

Right. That's the elephant in the room, so to speak. Great. Well, let's leave it there. I. I look forward to hopefully talking about this again with you and. And maybe bringing Chuck on. I'd be curious what his thoughts are as well. But, yeah, let's leave it there and go to the down zone, which is the part of this show that we can share anything that we've been up to these days, anything we've been reading, watching, listening to before we close out. So, Edward, what is your down zone today?

C (40:17)

Well, we are at the end or kind of middle of August, and Monday, my boys go back to school.

B (40:23)

Oh. Yep. Exciting.

C (40:26)

Yeah. So there is this mixed emotion in our house. My wife, Michelle and I are ecstatic. We feel like we're coming up on our own personal spring break. Our boys think we're sending them off to some sort of tortured school. Um, but I. I am getting excited to get them. The. The thing that's upsetting for me is every time I take the kids to school, they seem taller and older. And our son, Eddie, his voice is getting deeper. My son Tommy, our youngest, is getting Taller and thinner. So they are growing up like weeds. But it's exciting for us. Next week we'll be getting him off to school, having to get up early, having to do all that sort of stuff. But I do kind of like having. Because I work from home, it will be nice to have my six and a half hours where I can do recording and zoom calls and things without the surprises, without the boys wrestling in the background and getting them back out, you know, out in the world, socializing with folks.

B (41:32)

So absolutely. Yeah, absolutely. I work with quite a few people who have kids and it has opened my eyes to perspective on what the summers are to adults. To kids, it's this fun time. You have free time, it's a big vacation. And to the adults, it is a new pattern, new dynamic in the house.

C (41:58)

When school starts, we now get an entire team of people to help keeping our children active and engaged. So I welcome that. Now it may be in three weeks from now. I complained that we're up late trying to figure out homework and building posters and all those things, but it's the trade offs. And it's always fun to see when our boys, they complain about school in the beginning, but once they get into it, they really enjoy it and they come home with all these great stories of what they're learning and what their friends are up to. So it's just neat. Every year at the dinner table talking through what they've experienced or learned during the day. We've gone from colors and letters up to the Civil War and World War II and crazy math computations and whatever is happening in the solar system. So it's, for us, it's just fun seeing them mature year after year as they go through this.

B (42:56)

And I'm sure it's pretty fun to revisit all these topics that maybe you haven't thought about in a really long time. I mean, I think back to the things that I learned growing up and yeah, it's probably really kind of a fun activity to hear about these topics.

C (43:14)

Well, and we share like, you know, the Whole Electric Company, all those old PBS songs and Conjunction Junction, all that our kids think about. Crazy. When we start to blurt out the things we learned as kids that have, you know, been the foundation of what we know as adults. And the kids, their eyes roll at this stuff. But I assure you, we sing these things to them, we show them these clips, and it now burns into their brain that they can never forget all the things that they need to learn in school.

B (43:50)

I'm sure they will thank you. Later.

C (43:54)

I'm waiting for later, but I'll be patient.

B (43:57)

Yeah, yeah, just be patient. One day. One day when they're in their 30s, they'll say, man, dad, thank you so much. Well, that's very cool. I'm, you know, I've been traveling quite a bit just for work, and this weekend I have kind of a, an open weekend where I am going into the next few days phase of my grass killing spree. I've just been slowly but surely replacing the grass on my, in my front and backyard with, with landscaping and just doing a lot of digging and a lot of paving and a lot of planting. So I'm, I'm doing one section, hopefully this weekend before, just to kind of prepare for the fall and start to put some cardboard down and, you know, kill some of this grass. So I, I have a master plan. It's all in my head and I am, I'm implementing it one free weekend at a time.

C (44:57)

I, I love it when planners take on small projects. So I, I hope you share with us at least on our internal channels.

B (45:05)

Oh, yeah. I should drop some pictures. Oh, I, I, I'll drop some pictures so that you guys can all see. It's my front yard used to be very ugly and it's, it's very different than it used to look. So it's just a matter of acquiring materials and that kind of thing. But yeah, I'll show you.

C (45:25)

Cool.

B (45:26)

Awesome. Well, thanks again for joining me today. And thanks everyone for listening to another episode of Upzoned. Thanks, Edward. Talk to you. Talk to you again soon.

C (45:36)

Great. Thanks, Abby.

B (45:37)

Bye.

C (45:38)

Let me show you what I'm about to do it.