AI Arrival: County officials race to set AI data center rules as Pocatello permit fight heads to a vote
Bannock County officials are proactively developing new regulations for AI data centers, including model ordinances for surrounding counties, while the Pocatello City Council denied a conditional use permit for a major AI data center project proposed by Lex Developments LLC. The developer is seeking reconsideration and has threatened legal action, as the county's temporary moratorium leaves other areas exposed to unregulated data center development.
Bannock County officials in Idaho are forming a work group to draft model rules for AI data center projects, involving representatives from Power, Oneida, Franklin, and Caribou counties. This proactive measure comes as Bannock County's temporary moratorium on new data centers in unincorporated areas highlights a regional lack of specific ordinances.
The initiative, led by Bannock County Commissioner Jeff Hough, aims to educate local governments on energy demands, environmental impacts, and state tax laws related to data centers. State lawmakers, including Sen. Jim Guthrie and Rep. Richard Cheatum, have been invited to understand the pressures faced by local communities. The goal is to provide a framework that individual counties and cities can adapt into their own ordinances, potentially starting in January, and to encourage revisiting Idaho's property tax exemption for data center server equipment.
Simultaneously, the City of Pocatello is dealing with a contentious proposal from Gilbert, Arizona-based Lex Developments LLC to build a large-scale AI data center campus at the former Hoku plant site. The Pocatello City Council denied Lex Developments' appeal for a conditional use permit on July 16, citing a need for more environmental information, and formally notified the applicant on August 7. Gus Schultz, representing Lex Developments, has vowed to pursue the matter in court if the denial is upheld, and has filed for reconsideration with a hearing expected in September.
Ali Khan, a Pocatello technology executive involved in Hough's work group, emphasizes the technical differences of AI data centers, noting their reliance on closed-loop cooling systems that consume less fresh water than older facilities, and their significant electricity demands. Khan also advocated for specific noise-pollution standards, maximum water requirements, and limits on grid dependency to be incorporated into future local laws. City officials are considering a city-wide moratorium or amending zoning codes to better manage future data center proposals.