Raleigh staff brief council on data centers’ water, energy and zoning implications

Raleigh City Council received a staff briefing on data centers’ community impacts, zoning and utility considerations during a work session where information-technology, planning and Raleigh Water staff described types of facilities, cooling systems, local capacity and state policy trends.

Mark Wittenberg, information-technology staff, said daily cloud services and the rise of generative artificial intelligence are the primary drivers of recent data-center expansion, and that different classes of centers have sharply different power and water footprints. "The primary driver for data center expansion ... is artificial intelligence," he said, noting that hyperscale facilities run near peak capacity and demand substantially more power and, in many cases, more water than smaller, edge or enterprise centers. Wittenberg told the council the city currently has no hyperscale data centers and no pending requests for such facilities in Raleigh.

Pat Young of Planning and Development explained how Raleigh’s zoning code treats data centers: small ‘‘edge’’ facilities are classed as minor utilities and are permitted in most districts, while larger facilities are classified as major utilities and are limited to EIX and IH industrial zoning and require a quasi‑judicial special‑use permit before the Board of Adjustment. "Major utilities are limited to the EIX industrial mix‑use and IH heavy industrial zoning districts and, importantly, only after the issuance of a special‑use permit by the Board of Adjustment," Young said, describing the evidence‑based review and mitigation conditions that accompany that process.

Whit Wheeler with Raleigh Water described the utility’s reclaimed‑water capacity and rate framework. He said existing local data centers in the system typically use less than 25,000 gallons per day, and that the city’s reclaimed‑water system has roughly 2,000,000 gallons per day of capacity that could be used for evaporative cooling projects. Wheeler noted that state law constrains rate classification and that currently the city operates two rate classes (residential and commercial) but has authority to establish an industrial class; staff plan to return with related fee proposals in the next budget cycle.

Staff shared utility partner talking points noting that large power contracts typically place expansion costs with the large customers, that utilities generally do not offer discounted rates or development incentives for these facilities, and that while data centers now account for less than 1% of peak demand, they could account for about 13% by 2030.

The presentation flagged Senate Bill 730, described in the briefing as a "Ratepayer Protection" measure under consideration in the General Assembly. Staff said the bill would require comprehensive site and resource‑impact assessments for facilities consuming 100 megawatts or more, direct the Department of Environmental Quality to adopt water‑use standards for data centers, and restrict local incentives or use of eminent domain for siting large facilities.

Council members raised questions about mapping and proximity to residential areas, board expertise, regional water interactions and tracking offsite impacts. Council Member Silver asked staff to provide the spatial map of EIX and IH zones; staff agreed to supply zoning and proximity maps and acreage totals. The mayor emphasized four priorities for any policy work — shielding customers from higher utility bills, limiting environmental harms (water, noise, heat islands), expanding clean energy on the grid, and protecting frontline communities from outsized impacts — and indicated openness to discussing a time‑limited moratorium while rules are developed.

On operational remedies, staff said the special‑use permit process and Board of Adjustment evidence‑gathering are Raleigh’s primary local controls and that staff can proactively brief the board on these issues. Staff also said they are monitoring vendor sustainability commitments and technological shifts (liquid and immersion cooling, edge computing) and will train staff on efficient AI procurement to limit unnecessary demand.

Councilors also sought follow‑up from Duke Energy on apparent discrepancies between large utility investment plans and the utility’s estimate of bill savings for residential customers; staff agreed to request detailed information from the utility. Several councilors pressed staff on e‑waste, accelerated server turnover and recovery of rare‑earth minerals; staff said the city is coordinating with vendors and sustainability teams to prioritize reuse and recycling rather than landfill disposal.

The meeting ended with staff commitments to provide zoning/proximity maps, brief the Board of Adjustment if cases arise, return with system‑development fee proposals as part of the next budget cycle, and follow up with Duke Energy on the utility‑provided projections. No formal votes or motions were taken at the work session; the meeting adjourned until 1 p.m.