Data center developer sues Hill County, Texas, over moratorium
RCM Hill, LLC has filed a federal lawsuit against Hill County, Texas, challenging the county's one-year moratorium on data center projects, which the developer claims is illegal. The lawsuit highlights the impact on its planned 1,235-megawatt "Project Aquila" and its participation in ERCOT's Batch Zero process. Meanwhile, the City of Hillsboro is also considering its own data center zoning restrictions, which have been tabled for revisions.
RCM Hill, LLC, a Texas-based developer, has initiated a federal lawsuit against Hill County, County Judge Shane Brassell, and Commissioners Jim Holcomb and Larry Crumpton, challenging the legality of the county's recently enacted one-year moratorium on new large battery storage, power generation, and data center projects. The moratorium, approved 3-2 on May 12, temporarily halts such developments in unincorporated Hill County to allow officials to study their potential impacts on public safety and infrastructure.
RCM Hill alleges that the moratorium is "illegal" under state law and directly jeopardizes its planned 1,235-megawatt "Project Aquila" data center on over 800 acres in the county. The company claims it has invested significant time and resources, including acquiring land and working with ERCOT to qualify for its "Batch Zero" planning process, which requires confirmation of local discretionary approvals. The lawsuit contends the moratorium effectively nullifies the economic viability of the project and disrupts its ability to meet critical ERCOT deadlines and secure financing.
Simultaneously, the nearby City of Hillsboro is engaged in its own debate over regulating data centers. Its Planning and Zoning Commission recently tabled a proposed zoning amendment that would define "data center" and impose supplemental regulations, sending it back for revisions after residents voiced concerns about environmental impacts, water shortages, and the need for stricter acreage, setback, and height limits. The article notes that both the lawsuit and the city-level zoning discussions reflect a broader challenge for Texas communities in balancing economic development from power-hungry data centers with local concerns over roads, water, emergency services, and grid stability.
Hill County officials have previously stated the moratorium is a temporary measure to establish permanent standards, citing issues like roadway deterioration, drainage, heavy truck traffic, and the limited capacity of rural volunteer fire departments and EMS to handle industrial emergencies. The county and the named officials have yet to file their responses in federal court. The moratorium remains active unless rescinded or blocked by a judge, while Hillsboro's zoning proposal awaits further review.