Effort to block Reno data center offers glimpse of increasingly thorny issue in Nevada

This article was originally published by Nevada Current.

An environmental group is appealing the recent approval of a data center by the Reno Planning Commission, arguing the city established zoning guidelines for data centers without giving the public the opportunity to weigh in.

Webb Data Center, a planned 82,000-square-foot industrial building adjacent to an Amazon warehouse in North Valleys, would be the first data center located within Reno city limits. And Sierra Club Toiyabe’s attempt to block it underscores growing pushback on data centers over their potentially negative impact on the environment and energy sustainability goals. 

Sierra Club Toiyabe earlier this month filed an appeal of the approval of the Webb Data Center by the Reno Planning Commission on Dec. 18.

The planning commission approved a conditional use permit for the data center using ordinances established in January 2024 through what is known as “an administration interpretation/decision” — something City of Reno Assistant Director of Development Services Angela Fuss says is allowed and common practice when existing ordinances don’t address an emerging type of development.

Fuss estimates city planners were getting “at least one phone call a week” from developers asking about data center zoning requirements.

The ordinances setup by the city through that administrative process treat data centers “like warehouses” but have some differences, such as requiring fewer parking spots (because data centers often have fewer employees on site and no semi-trucks). They did establish a requirement that all data centers must go through the conditional use permit process.

Fuss says that requirement allows the city and commissioners to ask questions specific to each data center: “Will this be loud? How much traffic? Will you have bright lights like a prison, like Switch?”

Sierra Club Toiyabe argues in their appeal that those changes were never agendized in a public meeting or even announced by the city a year ago, meaning the public had no opportunity to weigh in beforehand. They see it as unethical and a potential violation of open meeting laws.

“A data center is not a warehouse,” says Sierra Club Toiyabe Director Olivia Tanager.

The group’s appeal argues that data centers are “unique in their impact to residential communities, the electric grid, and natural resources use, and therefore need to be considered under an ordinance that caters to their unique impacts.”

Adding to the controversy surrounding the Webb Data Center is the fact that the administrative decision it benefitted from was made in January 2024 — when Doug Thornley was Reno’s city manager. Thornley, who resigned in July, is now a private attorney at Holland & Hart and representing the Webb Data Center project. This Is Reno has reported on the ethical concerns raised by Thornley’s involvement.

Thornley did not respond to a request for a statement responding to those concerns.

But Fuss said that for the city Webb project “wasn’t even a twinkle in our eye” when the new data center ordinances were established.

The Dec. 18 approval by the planning commission was 4-2, with one commissioner abstaining after expressing she did not have enough information to decide. Commissioners first considered the project two weeks earlier, at a Dec. 5 meeting, but postponed taking action after two hours of debate over concerns, particularly about the data center’s energy use.

Commissioner Manny Becerra, who voted in opposition, in a prepared statement argued that “with additional data center applications on the horizon, addressing individual concerns piecemeal is not a sustainable approach.” He advocated for Reno City Council to take action by passing an ordinance specific to data centers.

“Establishing a comprehensive framework now would ensure predictability for residents, applicants, and decision-makers alike,” he wrote.

Thornley in a letter to Reno City Attorney’s Office and presented to the planning commission in December suggested his client may take legal action if his former employer does not approve their project.

Reno City Council will hold a hearing on Sierra Club Toiyabe’s appeal of the Webb Data Center approval on Jan. 22.

Growing industry, growing concerns

S&P Global in an October report put the current number of data centers in Nevada at 40. The website DataCenterMap.com lists 42 data centers within Nevada.

What the industry calls the Reno data center market includes the City of Sparks and other parts of Washoe County, as well as neighboring rural counties like Storey and Lyon where a cluster of data centers have already been established. That broader market currently has 16 data centers and is projected to grow at a much faster rate than Southern Nevada, which currently has 26 data centers.

In 2023, 15 states accounted for 80% of data center electrical demand, and Nevada was one of them, according to the Electric Power Research Institute. Data centers used nearly 9% of all the electricity “consumed” in Nevada in 2023, and EPRI projects that to grow to nearly 20% by the end of the decade.

The Webb Data Center will be served by a new substation NV Energy is currently building, according to materials presented to the planning commission. NV Energy has issued a “will-serve letter” to confirm this.

Tanager worries further embrace of data centers will stymie Nevada’s ability to meet energy sustainability goals.

“Nevadans, in particular, should be concerned about the rise of data centers because of the impacts to electricity rates and our shared climate and conservation goals,” she said. “Data centers and AI facilities use an extraordinary amount of energy, and are the impetus for NV Energy building out new fossil fuel infrastructure. These facilities also pose a great threat to our already limited water resources.”