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Madison planners outline options for regulating data centers during moratorium
Summary
City planning staff presented a briefing on types of data centers, potential zoning approaches, water and energy impacts, and next steps under the city's 12‑month moratorium; commissioners discussed size‑based rules, supplemental regulations, and limits on what the city can legally require.
The Madison Plan Commission heard an informational briefing on June 29 about regulating data centers during the city's 12‑month moratorium and discussed policy choices the city should consider as it drafts code changes.
Planner Ernest (Lisa) summarized the city's approach and timeline: the moratorium (adopted January 2026) gives staff time to research different regulatory tools; staff expect to produce a draft code in September for review, introduce code changes in November and seek a final council decision by December. The presentation distinguished four types of data centers—integrated, medium, large and hyperscale—based on size, land use analogues and potential utility demands.
"We are seeing a trend toward closed‑loop cooling systems that minimize continuous on‑site water draw," Planner Ernest said, noting some facilities reported initial fills of about 100,000 gallons and daily make‑up in the thousands to tens of thousands of gallons. Staff emphasized the city cannot unilaterally limit a customer's water usage if the utility can supply the demand, and noted some technology and building‑code questions are preempted by state or building code requirements.
The presentation covered zoning options: allow data centers in conventional commercial or industrial districts with size thresholds; create a new data‑center zoning district; or rely on supplemental regulations (setbacks, building form, pre‑application information about energy and water needs). Staff also highlighted infrastructure realities—centers often cluster near high‑capacity transmission lines and sometimes require on‑site substations and backup generators.
Commissioners and alders raised questions about how the city would verify infrastructure capacity and whether community benefits can be negotiated. Staff and legal counsel cautioned that community benefit agreements cannot typically be required as a condition of land‑use approval under state law, although benefits can be achieved through incentive programs (TIF, annexation terms or negotiated public investments). Several members urged separating hyperscale proposals from smaller integrated or medium centers by adopting size‑based definitions and permitting smaller centers in more places while limiting larger campuses.
Alderfield and others suggested prioritizing location metrics that consider transit access and limiting large greenfield‑scale campuses on scarce developable land. Staff and commissioners agreed further work is needed to define size thresholds, application information requirements, and which supplemental regulations would best align with the city's planning goals. No regulatory action was taken; the session was informational and advisory to staff as they draft code language.
