Non-disclosure agreements on data centers spur talk of 'secret deals'

Limerick Township, Pennsylvania, is at the center of a debate regarding a proposed 191-acre data center development in Montgomery County. The project, put forth by applicant MCD 7 LLC, involves plans for eight two-story data center buildings, three substations, and support structures, totaling approximately 2.8 million square feet. The proposal has brought to light the contentious issue of non-disclosure agreements (NDAs) in data center development, as the township initially received a request to sign one, which supervisors and their solicitor ultimately rejected. According to Daniel Kerr, Limerick's longtime township manager, the municipality decided against the NDA because they prioritize public discussions. This contrasts with practices in Virginia, where a university study found 25 out of 31 surveyed local governments had signed NDAs related to data center work. The secrecy surrounding these deals, particularly the identity of the 'end user,' has drawn criticism. State Rep. Joe Ciresi (D), representing the Limerick area, has filed a bill in Harrisburg to prohibit state and local agencies from entering into NDAs for data center projects, while State Sen. Tracy Pennycuick (R) also expressed concerns about the lack of transparency. U.S. Sen. Richard Blumenthal (D-CT) has also inquired with state utility regulators, including Pennsylvania PUC Chairman Stephen DeFrank, about data center-related NDAs. The Limerick planning commission is scheduled to review a 'conditional use' request for the data center, with anticipation of a large crowd necessitating a move to a high school auditorium. The development has raised broader concerns about data centers' massive power and water demands, as well as potential noise. While some residents, like Phillip Marks, oppose the project, others, like John Platchek, who runs an adjacent auto business, have no objections. Attorneys such as Frank Hoegen argue that NDAs are standard business practice for protecting proprietary information, especially when the ultimate 'end user' may not be known in early development phases, while Clint Barkdoll suggests government NDAs raise 'real concerns'.