San Jose drafting data center rules; staff say Planning Commission hearing planned Nov. 18

San Jose is writing new rules for data centers, the large buildings full of computer servers, city staff told the Planning Commission at an Oct. 23 study session, according to the meeting video.  Staff said the commission's public hearing on the rules is planned for Nov. 18.  That meeting was not yet on the city's posted meeting calendar on Oct. 30.

A written city report gives a sense of the money involved.  A 50- to 99-megawatt data center, once fully running, could bring the city $3 million to $6 million a year in utility user tax, Deputy City Manager Manuel Pineda wrote in a March 30 report to the City Council.  Staff also gave estimates for property and construction taxes at the Oct. 23 session; those could not be checked against a written city record and are not included here.

On the video, staff described two proposed fees:  a commercial linkage fee, which charges new commercial buildings to help pay for affordable housing, and a fee for city energy programs.  No amounts were given, and the fees do not yet appear in a written city record.  In August, Mayor Mahan and four council members asked the city manager to include options for community benefits from data centers, such as clean energy programs and affordable housing.

Some limits already apply.  The Bay Area Air District requires new diesel backup generators larger than 49 horsepower to meet the federal Tier 4 standard, the strictest level, according to a city presentation in April.  Data centers that need 50 to 99 megawatts of backup generators must get an exemption from the California Energy Commission, the state's power-plant agency, before the city can approve them, and that commission does the environmental review, the March report says.

Source:  Planning Commission study session video, Oct. 23; city report on data centers, March 30; city presentation, April; council memo on data center community benefits, Aug. 12