Melton halts data centers for one year

Gary, Indiana Mayor Eddie D. Melton issued an executive order on September 16, 2026, implementing a one-year moratorium on new data center development within the city. The pause provides the city time to thoroughly examine the potential impacts of the rapidly expanding data center industry on local infrastructure, including electricity and water, economic development, and residents' quality of life. Mayor Melton emphasized that Gary, which currently has no operating data centers, has a unique opportunity to establish proactive safeguards rather than addressing problems after projects are approved.

The executive order mandates a comprehensive review covering expected electricity demand, effects on utility customers, water consumption, health and environmental considerations, infrastructure requirements, potential city costs, emergency preparedness, and projected tax revenue. The scope of the review extends to projects outside Gary that would materially increase demand on city-owned utilities. This decision follows prior discussions in the Gary Common Council where residents, including Gary Advocates for Responsible Development member Carolyn McCrady, raised concerns about transparency, utility consumption, and called for a moratorium. Council Vice President Darren Washington has also advocated for caution regarding data center size and impact.

The city's review is also informed by widespread power outages in Northwest Indiana following an August 11 storm, raising questions about electricity demand and grid reliability, particularly as utility provider NiSource prepares for large data center loads elsewhere in its system. Mayor Melton intends to consult residents, businesses, utility stakeholders, and experts during the moratorium period. He also urged federal policymakers to consider safeguards for AI development, which drives significant demand for computing facilities.

Gary's action aligns with a broader trend across Indiana and the nation, where communities are increasingly scrutinizing data center development. While Indiana offers significant tax incentives to attract the industry, cities like Indianapolis and Boone County have also enacted moratoriums to assess local impacts. Nationally, the U.S. House recently passed the bipartisan Ratepayer Protection Act, which calls for state utility regulators to ensure large electricity users bear their fair share of infrastructure costs. The moratorium in Gary reflects the city's commitment to welcoming responsible investment while prioritizing infrastructure reliability and residents' quality of life.