By Ben Appiah
Where are we now in the statewide efforts for responsible data center development? As this industry rapidly grows across the country, organized and passionate actions by citizens have also spread throughout Delaware. Our community continues to engage with neighbors via canvassing and has formed DE-CLEAR, a collective of members from several organizations and neighborhoods dedicated to pursuing strong regulations and guardrails on data center development within the First State.
It’s not just you and your next-door neighbor pushing back against developers. Our forward-thinking legislature is currently working on the details of bills that would set guardrails and hold data centers accountable for their infrastructure costs. The Delaware General Assembly is currently debating several bills that could serve as a focal point of how the State regulates this transforming industry.
One of the bills, House Bill 233, would establish a large load tariff for major electric customers such as hyperscale data centers. This is essentially a “rate class” for large customers of energy with similar characteristics. The Public Service Commission (PSC) and Delmarva would set standards to ensure these massive consumers of energy would be held accountable for their own expenses. While data center projects seeking development cannot be denied under the tariff, they would be subject to provisions such as a guarantee to pay for infrastructure costs, including energy transmission and distribution investments, and minimum contract lengths or early exit fees. These would prevent further impact to residential customers on the grid and deter any quick profit schemes for developers.
Senate Bill 312 is a new key factor in ensuring transparency and accountability. Introduced just this month, it prohibits state agencies, counties, and municipalities from entering nondisclosure agreements that would prevent information about data center development from reaching the public. Several projects, such as Microsoft’s land purchase of 1,350 acres in North Carolina in October 2024, have relied on NDAs to keep residents, and even some county officials, completely out of the loop. Microsoft didn’t even officially announce the land would be home to a new data center until late February of this year. The people whose lives and homes are directly impacted by this new proposed infrastructure should have been the first to know, not hung out to dry by big tech companies and private investors.
In addition to these proposals, there are important regulatory provisions within Ordinance 25-101, passed by New Castle County Council on March 10th of this year. This Ordinance puts guardrails in place for future data center projects such as a requirement that noise levels not exceed 55 dB(A), demonstration of grid capacity or on-site energy generation capability, and prohibition of open loop cooling without the use of reclaimed water. However, Project Washington and the Newark plan are exempt due to the retroactive amendment on the ordinance not being passed.
Speaking of Project Washington…
Starwood Digital Ventures has shown its determination to gain a foothold in Delaware’s coastal communities. Even after DNREC’s decision in February to prohibit the project from moving forward, its representatives appealed to the Coastal Zone Industrial Control Board (CZICB). From March 24th through the 26th, the CZICB duly voted to uphold DNREC Secretary Patterson’s decision prohibiting the project within the coastal zone as well.
Starwood could once again appeal DNREC’s decision, but this time to the Delaware Superior Court, and onward to the Supreme Court. While reaching the Supreme Court may take up to two years, the vote could go in favor of Starwood and the DNREC’s prohibition under the Coastal Zone Act would be overturned.
With such a push to build out the data center in Delaware City, Starwood still has the option to present a modified plan to the CZICB. But the investment group seems to be keeping project development as is, and the South Campus proposal’s “by-right” status, where projects are rubber stamped if the zoning category is met, in front of New Castle County Council only emboldens their efforts. The second proposed site would require rezoning, a change from the “suburban” to “industrial” classification for the facilities to be built. The land use process, public community discussions, and a verdict from the NCC Council are what stand in the way of development on sensitive wetlands and forests.
Beyond Project Washington and the Newark plan, there are, at the very least, four warehouse plans in the state that have filed applications and expressed interest in converting into data centers. One of these is on the beloved Frightland attraction land, just south of the Canal and includes wetlands possibly affected by Coastal Zone limitations. It is also conceivable that the warehouse plans would be subject to 25-101 regulations.
There has been a recent piece published in the Delaware Business Times vying for support for data center development in the state. The article gives misleading points on the supposed benefits of the well-known Project Washington. But ultimately, it will be Delawareans footing the bill for these large investment firms. The 153rd Delaware General Assembly has until June 30th to pass legislation protecting us from the worst impacts of data centers.
In the meantime, it is up to local residents to continue the push for city-specific policy and countywide ordinances in Kent and Sussex to further curtail unwanted impacts on our homes and energy bills.
—---------------------------
Interested in joining the fight? Email Marissa McClenton at marissa.mcclenton@sierraclub.org to get involved with DE-CLEAR!
Add new comment