Memphis City Council approves ordinance to pause data center permits

The Memphis City Council has approved a second reading of an ordinance to implement a temporary pause on data center development permits. This halt is intended to allow the city to study the long-term effects and benefits of data centers, as well as to establish specific zoning definitions. Additionally, the council introduced two more ordinances aimed at managing future data center development once the pause is lifted. Each ordinance requires three readings to become law in Shelby County.

MLGW President Doug McGowan informed city council members that the utility is currently evaluating two potential data center projects in the area. One project involves expanding 5C's operations by approximately 50 megawatts, while another proposed project could demand about 300 megawatts. McGowan emphasized that MLGW has not committed to serving either project, and both would require multiple approvals, including from the Tennessee Valley Authority (TVA), with no potential for advancement until at least early 2027.

The discussion surrounding the ordinances highlighted a debate between economic opportunity and environmental and social concerns. While some argue that Memphis, as a community in need of revenue, could benefit significantly from data center tax revenue, others stress the importance of protecting the aquifer, air quality, and addressing potential increases in utility costs for residents. Questions were also raised regarding the legality of the proposed moratorium and the potential for lawsuits. The consensus was that while data centers present an opportunity, the city must implement the right constraints and conduct thorough studies to ensure long-term benefits outweigh the costs and impacts on resources and citizens.