Raleigh pauses major data centers as reclaimed-water rules enter review

Raleigh pauses major data centers as reclaimed-water rules enter reviewRaleigh City Council voted 7-1 to impose a six-month freeze on development approvals for major utility data centers. The review will include water-cooling demand and potential reclaimed-water connection requirements, although staff stressed that the city has no hyperscale data-center application pending.

The moratorium runs from October 6, 2026 to April 6, 2027, or until new regulations are adopted, whichever occurs first.

It blocks new site-plan, building and utility-permit applications for major utility data centers, while exempting smaller facilities of 10,000 square feet or less and 5MW or less.

Raleigh Water is considering whether water-cooled data centers located within a specified distance of an existing reclaimed-water pipe should be required to connect.

Staff said it had not seen sufficient justification for data centers to use potable water for cooling where reclaimed water could be used.

Raleigh City Council has approved a six-month moratorium on major data-center development approvals, opening a regulatory review that will include potential requirements for water-cooled facilities to use reclaimed rather than potable water. The ordinance passed 7-1 on October 6 and applies from that date until April 6, 2027, unless the city adopts replacement regulations sooner. During that period, the city will not accept development approvals required by law for major utility data centers, including site-plan, building-permit and utility-permit applications. City staff said the water component of the review will focus on Raleigh Water’s potential use of reclaimed-water requirements. Under the approach being examined, a data center within a specified distance of an existing reclaimed-water pipe could be required to connect, subject to the size of the pipe and other forthcoming details. Deputy City Attorney Jennifer Ashton told council that staff had not identified “sufficient justification” for potable water to be used for data-center cooling. Reclaimed water remains a valuable city resource, she said, but using it where feasible would preserve drinking water for people. The moratorium covers major utility data centers: facilities exceeding either a combined building-and-land footprint of 10,000 square feet or projected peak electrical demand of 5MW. Small facilities at or below both thresholds, including internal server rooms used by businesses, hospitals and banks, are excluded. Existing and vested projects are also protected under state law. Applications submitted before the moratorium that are deemed complete, including special-use permit applications, may continue under the regulations in force at the time of filing. Staff said Raleigh has data centers already in operation but neither a hyperscale facility nor a pending application for one. Major data centers are currently limited to industrial mixed-use and heavy-industrial zones, where they require a special-use permit from the Board of Adjustment in addition to normal development approvals. Council members asked staff to assess cooling-system noise, water demand and utility-price effects, hazardous-material storage, wastewater PFAS considerations, backup-generator air quality and the cumulative effects of clusters of smaller data centers. Proposed zoning amendments are expected to be available for public comment from November 16, with Planning Commission review anticipated in December and January.