Imperial County approves massive data center. Then he changed his mind.

from Deborah BrennanCalMatters

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In April, developers of the massive Imperial Data Center cleared a major hurdle after Imperial County supervisors approved a plan to combine several parcels of land for the nearly one million-square-foot facility in rural Southern California.

It will be the largest data center in the state; The parent company, Imperial Valley Computer Manufacturing, LLC, describes it as a hyperscale facility “designed exclusively for advanced AI and machine learning operations.”

That progress stalled last week when the county board reversed its decision, declaring a 45-day moratorium on the data centers and forming a public commission to advise the county on zoning policy for the facilities. Their cancellation came after months of backlash and a more than hour-long public hearing in which residents voiced sharp criticism of the massive project and its swift approval.

The businessman, Sebastian Rucci, said he is filing a lawsuit to seek a temporary restraining order against the moratorium today, arguing the county has failed to show a true emergency, explain what damage and impacts it will cause and what specific concerns residents have expressed.

“It’s defective,” he said. “The county wrote a moratorium after one year of the approvals. Moratoriums are not there as a planning tool. They are there for very specific emergencies.”

The conflict over the massive facility reflects the push to build infrastructure for the mushrooming artificial intelligence industry and growing concern among Californians about its impact on air quality, water, energy, traffic and more.

Imperial Valley Computer Manufacturing, LLC promises it will produce 2,500 construction jobs and 100 permanent jobs and generate $72.5 million in one-time sales tax and $28.7 million in annual taxes. But many residents and local leaders worry that the public health, environmental and economic costs to their rural, working-class community could outweigh those benefits.

Earlier this year, State Senator Steve PadillaDemocrat from San Diego, introduced a series of bills aimed at building data centers in Imperial County and in California. One of them will review the membership of Imperial County Air Pollution Control Districtto provide stricter oversight of projects that affect air quality in the polluted region. Others would regulate energy use and tighten environmental protections for facilities across the state.

This year, the city of Imperial filed a lawsuit challenging the review of the data center under California’s Environmental Quality Act, known as CEQA. And local voters are collecting signatures for a referendum to ban data centers in the county. Rucci said his project is permitted under existing industrial zoning and does not require additional environmental review.

“They can’t just come in and claim they’re exempt and have the right to build the largest data center in the state without any oversight,” Padilla said at City Hall in El Centro on Thursday.

Padilla has been a fierce critic from the start. In January, he urged Imperial County supervisors to hold off on approving the data center before conducting a thorough environmental review and seeking public input. One of his bills would change the Imperial County Air Board from its current five county supervisors to a broader panel of 10 local members representing the county, city councils, public health, environmental groups, labor and agriculture.

“I think it might be a good idea to have people with professional training and credentials in mitigation science,” Padilla said of the proposed change.

Some farmers and business owners in the audience were skeptical, arguing that the board’s expansion would expose them to even more costly regulations without addressing out-of-area pollution originating from Mexico or the Salton Sea.

“We’re losing our ability to compete because of California-specific rules and regulations,” said Lawrence Cox, owner of Coastline Family Farms. “I want clean air. I want clean water. But the economy is coming to the fore because of some of the rules and regulations put in place by California lawmakers.”

Michelle Hollinger, vice president of Victoria Homes, said homebuilders already face complex environmental rules and argued Padilla’s proposals would apply the same standards to newer projects such as data centers while addressing the hidden costs of lax regulation.

“Let me tell you what is really expensive,” she said. “It’s expensive when the Imperial Valley has some of the highest rates of pediatric asthma in California. It’s expensive for families to miss work, pay for emergency room visits and watch kids struggle to breathe. I don’t want to hear that public health is too expensive while data centers avoid CEQA.”

Padilla introduced two other bills to impose restrictions on data center development across the country. One will require large data centers prepay the cost of their energyand prevent them from passing on these costs to other payers. Without those safeguards, Padilla said, “You’re suddenly going to create a giant sucking sound of electrons, drawing energy and creating shortages and driving up prices” of energy-intensive data center projects.

Another would bar data centers from receiving exemptions under the California Environmental Quality Act, which requires developers to disclose their project’s impacts, seek public input and propose ways to mitigate any harmful effects.

It would also require the project to include zero-carbon energy generation and storage, pay for any new investment in the grid to avoid passing costs on to other electricity customers, use recycled water, offset any increased air pollution and invest in local workforce development and training programs.

The bill warns developers that “You’re going to do better than the minimum. You’re going to set a new standard in California,” Padilla said.

All of these bills have passed the state Senate and await a vote in the Assembly.

The controversy over the Imperial data center plays out in similar battles across the state, where other planned technology facilities face community pushback and watchdog groups seek to uncover their effects.

Data centers are spreading to areas with excess water suppliesbut do not provide public accounts of their extensive water use, CalMatters reported.

Imperial County is one of California’s most productive agricultural regions, but is highly dependent on the Colorado River and subject to water scarcity. So the Imperial Data Center’s projected water use is a key issue.

The company initially promised to use recycled water from neighboring towns, but when that didn’t work out, sued Imperial Irrigation District in Imperial County Superior Court this month, seeking 260 million gallons of river water each year. Rucci states in the lawsuit that the water will come from 160 acres of adjacent farmland purchased by the company, which has an existing water right. He proposed burning the land and diverting the water to the data center, saying it would not create additional water demand.

In many cases, companies are exempt from such disclosure for projects permitted under so-called ministerial approval or automatic permits for projects that meet certain zoning criteria.

That’s a big part of the argument in Imperial County; the data center merger and an earlier zoning permit were approved under routine city planning rules, without the extensive environmental review typically required for major developments under California law.

The city of Imperial objected to that shortcut in a lawsuit that argued the project sits just a few hundred feet from homes in the incorporated city, but didn’t account for its effects on air quality in the region, which already suffers from high levels of pollution and childhood asthma, or on water use, energy demand or other impacts.

“This process lacks the basic safeguards necessary to ensure that the public is protected and that the impacts caused by the Hyperscale AI Data Center are mitigated,” the city of Imperial argued.

Some voters want to eliminate data centers altogether. Earlier this month, Monterey Park, a city in Los Angeles County, became the first city in the United States to adopt a moratorium on data centersfueled by months of controversy over a planned project.

Rucci argues that public opposition to data centers is irrelevant to the legal status of his project. He argued that county zoning would allow for other, higher-impact industrial projects.

“People can’t just emotionally say I don’t like data centers,” he said. “It’s just a building, but with much less intensive use than other uses.”

Padilla thinks data center development can be done right, but said it requires guardrails to protect neighboring residents: “We can figure out ways to power this technology without completely destroying and exploiting communities.”

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.