Planning & Zoning Commission - Regular Meeting

First of all, thank you for coming. We got two pretty good topics. The first one's going to be VIA tonight. As you know, VIA is doing two of our routes in a connector in Las Colinas. It was part of the DART. Last October dropped two of our routes, the 255 and the 225. That ended February 1st, and we put the VIA as a replacement for the DART routes in... June 15th, so that'll be an update. And the second one will be data centers. We'll have three speakers on data centers and we'll introduce each. But before we get started, this is a very informational program. We will have cards for questions. We won't have microphones for questions. So if you do have questions, please, I believe the table's right back here. to get your question cards, start writing them down. We'll have people that can come pick them up during the presentations. And finally, before we get started, I'd like to introduce a few people. Mayor, if you can wave your hand. Mayor Alzapanta. Councilman Dennis Webb. Councilman Fahad Ahmad. I believe we have Councilman Abdul Kabir here. Abdul in the back. And I don't think I missed any other councilmen here. Of course, John Block gonna be here. He's gonna introduce the via here in a second. Also, our city manager, Chris Hillman, if you can wave from back there. And underneath Chris Hillman is our three assistant city managers. Orlando, are you here? Orlando Sanchez in the back. Phillip Sanders, probably Rob in the back as well. And Rachel Wood. Rachel couldn't make it, so she's. So without ado, John Block, City Councilman for District One, which is part of this area right here. And I'll let him introduce our first topic, which is VIA.

Thank you very much, David. So yeah, Via is a topic that's really close to my heart, especially because two of the routes go through District 1 and serve a lot of the people and communities in our district. It was kind of a blow to our city when DART decided to cut the two bus routes, 225 and 255. And We set about pretty quickly trying to determine how we were going to be able to restore service to a significant portion of our city and a lot of lower income areas of our city as well. So this is a topic I'm very excited about. We're going to hear from Melissa Baker about this. She's going to give a presentation and then we will take questions after that.

There we go. Thank you so much, Council Member Block and Council Member Pfaff. Melissa Baker, I am pleased to be here tonight to give you, the residents of Irving, a update and go through here, on the VIA public transportation. We're gonna discuss what we're gonna be discussing tonight, the timeline of the project, the funding, the Irving Connector 225, the Irving Connector 255, the Irving Connector, the Loop at Las Colinas, some of our ridership results that we have right now, how to book a ride in case you have not been on the project, and then how to contact us, and then we'll do questions. Timeline, Irving released in the November-December 2025 timeframe a request for information. In February, the DART did remove both the 225 and 255, as the council members suggested, from their service plan. In March, we did present to the work session council. In March, April, we seeked DART approval for what's called the General Mobility Program funding reimbursement for this project. In May, the council approved the VIA transportation contract with all three components. In June, the Irving Connector routes 225 and 255 were back in operation. And then July, the Irving Connector loop at Las Colinas, our new project, was operational. The funding, the Irving Connector VIA is funded by the General Mobility Fund, the GMF, which is from DART. The Irving City Council approved the amount on May 7th. Now these slides are just gonna do an overview of each of the project components in case you have not ridden them. On the 225, that began on June 10th. It's two 15 seat Ford Transit. Those are ADA compliant. The services are Monday through Sunday, five to midnight. We have 24 stops currently. The frequency is 30 to 60 minutes, depending upon the time. The rider fee is $1.50, and that's valid for two hours after activation of the ticket. We wanted to point out that these are the same operating hours, fares, stops, and frequency as DART. And then again, stops may be adjusted as needed as we look at the data. On the Irving Connector 255, we are proud to bring that back operational as well. Service began the same date on June 10th. This is also two 15-seat Ford Transit ADA compliant. The services are Monday through Sunday, 5 a.m. to midnight, 30 stops with the same frequency, 30 to 60 minutes. The $1.50 fare, that's two hours after activation. The same operating hours and fare stops as frequency as DART. And then, of course, stops may be adjusted as needed as we receive input from the community. The Irvine Connector Loop at Las Colinas, this is our new component. Service began July 6th. This is 115 seat for transit. The service times are Monday through Sunday, 11 a.m. to 10 p.m. 11 stops, the frequency is 15 to 30 minutes. This is free for all riders. Stops may be adjusted as needed as well as we're looking at that. No reservation required, it is a fixed route. If you are looking at trying to find a real-time, when is it coming, we do have the City Mapper app to help you plan that. This is just a snapshot of ridership from the June 10th to July 7th timeframe for you. You'll see the routes on the left-hand side as you're looking, and then you'll also see the ridership by the time of day. Here is a graph that's going to depict the day of the week and what days are more popular than others from that June 10th to July 7th. Again, this is just a snapshot. Here you'll see the loop and just a snapshot of that on the days of the week. Here you'll see the overall boardings of the loop and then the time of day versus the ridership. We also wanted to just talk about how easy it is to book a ride. So you can find your stop on the CityMapper app that you see on the right-hand side. You can check the schedule. It does run every 50 to 60 minutes, of course, depending upon which component you're looking at. And then it shows the next arrival stop at your stop, so you can find out there. Board and pay, you can walk to your stop, hop on, and then pay for the $1.50. And then, of course, the loop is free. The contact us slide, we do have the Irving Transit page, which is the first link on there for everything transit, for your information. We also have our own VIA website right there. If you have any customer service related questions, that's 24-7, we do have an email as well as a phone number with VIA that you can reach out anytime during the day. And then we also have myself, my contact information is there if you have any questions. Thank you for your time today.

Yeah, if anybody has any question cards. And just to kind of give you the timeline on DART, as you know, we called for an election last, I believe it was December. We pulled it from the election in March after reaching an agreement with DART that DART will give us 5% of our one cent sales tax that we send to them every year. They're gonna give us 5% back this year, going to 10% over the next six years. That 5% is called the general mobility funds. So that 5% is funding this Via Connector, and by state law, we can use that for mobility programs, which could be on the roads that the, maybe Melissa, you can kind of tell what the general mobility funds are for everybody. Okay.

The General Mobility Fund is a system to which when DART gives that funding back to us, we can use that for projects like this, sidewalks. There's a plethora of transportation-related topics and projects, Councilmember, that we can use to use that funding for. So we're very appreciative of that funding.

Right. And of all the six cities who had voted to go to the electric, only Highland Park voted it out. Both Addison and University Park voted to keep it in. Us, Farmers Branch, and Plano pulled it from the election. We had seen the similar numbers from Addison, that it had been about a 65-35% vote for the keeping, staying in DART. And the agreement we met with DART also, not just the funding, but it changed the structure of the board of DART from 15 members today, eight of them are elected by Dallas. So the whole 12 suburbs only had seven seats. That'll be changing to where Dallas only has 45% of the board and the suburbs will go to 55%. So the governance model will change. That's a state contract as well. So that'll be in the legislature next session, the session coming up. It should be a pretty easy thing for them to do because we've all agreed on it in contracts. So that'll be happening too.

So John, questions? Yeah. All right, so the first question is, why does the Las Colinas collector have no cost in a more affluent area, but the two bus replacements cost $1.50 per ride?

Thank you for that question. So I think everybody heard it. The two routes that are 225 and 255 were on the DART actual system. They were removed off of the DART system, so we are just replacing that service back onto a system that DART removed. Now, as it relates to the loop, the second part of that question, That loop is a pilot project that we are looking at the data and related to because that was something that was a question and was a demand of the market. So we're looking at it as a pilot project. We're going to see what the numbers are, and then we'll go from there. Yeah.

About DART passes, are we looking at using DART passes on our connectors?

That is a great question, and I'm so glad it was asked. City staff actually is in the process of doing what we call system integration. So we are in negotiations with DART staff right now in order to figure out a way that we can have a seamless integration system that will be able to use those GO passes. So we're looking forward to that partnership with DART and being able to provide that to our citizens relatively soon.

I'm handicapped on a cane and sometimes on a walker. The VIA vans do not have stairs. Why not? I can't climb anymore.

Completely understand that. Actually, we rode as staff. We did ride the 225, the 255, and we've also ridden the loop. As it relates to that, they do have a step stool that they do put out. So it's not visible when the van actually first pulls up, but they do have a step stool on that. Secondly, to that effect, I'd also like to remind everyone that DART still provides paratransit services So, if you do have that need, they still provide that services for the entire city. So, I just want to point that out.

Great. Well, thank you, Melissa. Those were all the questions.

Okay. Thank you.

So, now for our next topic, which is data centers. This is not a conversation on AI or uses of what's going on in the future, jobs, things of that nature. This is about Irving and data centers. We're gonna have three great speakers here. First up will be Chad Powell, who is the Chief Technology Officer for the City of Irving. Next up will be Jocelyn Murphy, who's our planning director, to talk about where data centers are located and what kind of use permits we've put around them. And finally, we'll finish up with legislative affairs, which is Mark Wiggins. Mark's been looking at what is at the federal level, what's at the state level, and what's at the city level. Just to let you know, a lot of people ask me, how's your first year on council? And it's always a very interesting answer. But I'll tell you, the city controls some things, the state controls a lot of things. So this will be very informative, and I look through the presentation before they... before they sent it out or got it ready for today. And there's quite a few things from the state level. So one of the things you'll see from Mark's presentation is not only our federal government of who to contact, but our state leaders also that represent parts of Irving. So I want to make sure that you'll either take a screenshot or we'll send it out after this too. The things that we might not be able to answer, some things like around air quality, around electricity, we don't control a lot of these things. And so make sure you reach out to your state leaders too to share your concerns after the presentation. With that, I'd like to invite up Chad Powell, our Chief Technology Officer of the City of Irving to start the presentation.

Good evening. Chad Powell, Chief Technology Officer. Just to give you an idea of what we're going to be talking about, we're going to talk about the background operation of data centers, the concerns that the community has over the data centers, and then how those concerns are addressed, differing between state and city control, the city of Irving data center development standards, and then the legislature following that. So I myself will be covering what is a data center and how do they operate. Jocelyn Murphy will be covering what are the concerns and the regulations regarding data centers. And then Mark Wiggins will cover the legislature and what's coming from the state in the next session. So what is a data center? A data center is a physical facility that stores and processes digital information. They house servers, networking equipment, and supporting infrastructure used to store, process, and transmit digital data. And data centers are... necessary for all the wonderful things that we enjoy in terms of being online. So it's online banking and transactions, streaming and gaming, cloud services, phone and internet networks, as well as our social media. Why are data centers coming to Texas? Texas has a business friendly environment, relatively lower cost energy, faster permitting timelines compared to other states. There's been state incentives and exemptions, and then the available land in proximity to the power infrastructure. The location requirements for modern data centers, they generally are recognized as the prime considerations, which is connectivity, so the proximity to fiber and internet connectivity, lower natural disaster risk, power availability and cost, so that's resiliency, the proximity to power sources, cost of electricity, and the access to renewable energy sources. And then there's the security and compliance factor, which is robust physical security, and then the regulatory compliance requirements, such as data privacy laws. And then they're looking for scalability for future growth. The data center market growth, DFW is one of the top three data center markets in the United States, behind or in line with Atlanta, and then the Washington, D.C., Virginia area. The markets in the United States are there because of centralized location, extensive telecommunications infrastructure, abundant fiber connectivity, access to high capacity electric transmission lines, the favorable business climate, utility capacity, energy infrastructure, transportation access, and then the compatible land use. So data centers come in all shapes, sizes, and colors, and we'll just walk through some of the different types of data centers. You have your traditional data center, which is a large facility, at least 10,000 square feet or more, but can be up to a million square feet and contain one building or multiple buildings on a single campus. And then we have edge or modular data centers. These are smaller in nature. They're often prefabricated and designed to be unstaffed or remotely monitored. You'll often see these at communication sites or radio towers as an example. And then we have the hyperscale data centers that are large, typically campus size, comprised of multiple buildings spread over 50 to 300 plus acres. These are the ones that are predominantly associated with mass cloud computing and AI services. They have to be located next to electric transmission lines and substations are made, in some cases that we've seen recently, they're constructing their own power generation. exclusively for these facilities. They need water source for cooling and they're often operated by the big tech companies such as Amazon, Google, Meta and Microsoft. So the design requirements for modern data centers, you have to have strong physical security. There's chiller and cooling units, energy generators for backup power supply. You'll see fuel tanks, fuel cells, and energy storage. These are typically gonna be in the height of one to two stories up to 50 feet. And now I'll turn it over to Jocelyn.

Good evening. So some of the concerns that we hear about data centers, both in the ones that we had locally, some of the cases, but also, of course, the ones that you hear nationwide, is if they're in proximity to residential uses, some of the impacts they may have on those uses. The building height or the bulk of the building, often the size and the scale is of concern. Setbacks from property lines, from streets. The noise, the humming that you hear from even your HVAC at your house, you hear that condenser or the compressor outside. Or sometimes they have backup generators and they will often have to turn those on just to maintain those routinely. Some screening, you want to make sure that those are screened, any type of equipment they have, whether it's on the rooftop or on the ground. Landscaping and lighting pollution, if we're going to have data centers, you want them to be compatible with an area, and often landscaping can help that. But the lighting is also a concern, is minimizing the impact of lighting, any type of glow that a data center may have. Some of the concerns, especially in some of the rural areas, have been groundwater contamination and also just making sure that they have enough parking. So as Council Member Pfaff said, there is very much a difference between the authority of the state and the city. The city is an entity of the state and therefore what the state allows us to regulate is what we regulate and they regulate everything else. So the energy, the power, is regulated by the state. Of course, ERCOT is the statewide, most of the state, not all the state, but ERCOT regulates the generation of the power and the distribution of power. Encore, of course, in the DFW area, if you get to Houston or some of the other parts of the state, they have different distribution companies, but those are all regulated up at the state level. And the PUC, the Public Utility Commission, regulates not only electric but also the generation, whether it's a gas-powered plant or the solar or whatever, those are all regulated by the PUC. The Water Development Board does the state water, statewide water planning and all of the cities and all the communities communicate with the Texas Water Development Board, of course, because water doesn't stop at borders. So they have a water plan and they also regulate the water distribution. Not at the local, of course, but the larger scale. The Texas Commission on Environmental Quality is also known as TCEQ. They regulate any air quality, any emissions. And the state controller and state economic development office regulates any exemption or tax incentives. So what does that leave for the city of Irving to regulate? We have zoning and land use control. That is what my department, the planning department does. We have the zoning and then we create development standards, which is, I'll go through that into the second. And we have building permitting. And so we can regulate what happens here on the property within the city. We also have noise regulations. Most of those are for loud noise. And we will have to look at any type of lower impact noise to see if that's something that we can regulate. Also, water capacity. Of course, we do own our own lake, our own water source, our own distribution. And then we have our system here, of course, in the city that when you turn on your faucet, that is all city regulated. And then any economic development incentives the city, of course, can control. So in June, 2024, the city council directed staff to look at ways that maybe we should regulate development or data centers more. We had a few come in and as they started to pick up, city council recognized that this is something that we need to get in front of. So we created a whole section on a unified development code. We differentiated them as a principal use, which would be the main use on the property or an accessory use if it's part of an office or, a medical clinic or something like that. So of course the principle use, the definitions are pretty much the same except for the accessory use can be no larger than 1,000 square feet. But again, one is the main use on the property and one is only secondary to the main use. So if it's a principal use as the main use, it has to be 300 feet from any residential zoned property lines. Maximum building height is 75 feet as measured at the top plate, not including any of the equipment. And then parking is based on where the people are. So offices, training, those types of things. So there are setbacks for ground mounted equipment, and here we're talking about the chillers, the generators, any HVAC, those types of equipment. Those cannot be between any wall and a public or private street, so we're worried about that public entity, that public space. and also not permitted within 300 feet of any residentially zoned property because we want that building to serve as the screen for the visual appearance of the equipment and also any noise that may come from that. So that was a big reason we wanted to have that building in between. And any ground and roof mounted equipment also has to have a screening wall. Sometimes they're perforated for air, but there is a screen wall requirement. Lighting, mainly, they just have to be shielded. Basically, the lighting has to remain on site. And there are certain regulations for whether it's mounted on the building, whether it's on light poles. But we do try to make sure that it's not over-lighted as much as we can. But the most important thing is all the light stays on site. If it's an accessory use, it has to be no more than 1,000 square feet, maximum height of 15 feet. The placement also can't be, you know, it's regulated so that we don't affect any adjacent properties in the building is also part of that buffer system. Any cooling systems has to be in the structure or in the principal building and has to be screened as well. So in February, 2025, you know, we had already created these standards and the city council realized we needed to start reviewing these on a case by case basis. A few years ago, we created this conditional use permit and I thought that this will be a great way to be able to trigger a process so that we go through the zoning considerations each time a data center comes through. So the map that you see on this are light industrial districts. So you have to be in one of these districts to even ask for the conditional use permit. So these are in pretty standard areas. You see Freeport, you see the Loop 12 area, you see the County Line area on the west. So they're pretty standard areas for the most part of where they can even request a conditional use permit. All of the data center regulations that we just went through apply. They can ask for variances. Council will look at that on a case-by-case basis. The conditional use permit allows for time limits and verification. A data center is a pretty permanent use, so that is something we would have to consider if necessary. I don't want to reiterate, this is a rezoning process. So the rezoning process requires two public hearings. So people, all the neighbors within 200 feet would get a mailed notice. And so it's property owners. So it's whoever is at the appraisal district list. And we also put it in the newspaper and there will be signage out front. So, again, there's an opportunity if you get that notice, there's opportunity to give input and let the City Council and the Planning and Zoning Commission know what your opinion is. So there are a few things that the City Council consider when they're looking at approving one of these. Is it consistent with the comprehensive plan? Again, making sure that it's in an industrial area. Is it compatible with what's in the area? Just because it's in an industrial area doesn't mean that this is a good location for that. Does it meet certain supplemental standards? Is it compatible and preserves the character of the adjacent development? Is there any negative impact on the area and it's not detrimental to the health, safety and welfare of the community. So I'll run through these two slides on water. We do have a water director here. If you have any questions, he's happy to expand on these. There are three different types of cooling technology. It's either some use more water and less energy, and if it's less water, then it's typically more energy. Evaporative cooling is definitely the highest water demand. It uses that fresh water, and that's one of the older technologies. The closed-loop cooling, they have an initial, they usually do a flush, an initial fill, And after that, they're not adding any more water. They may come through every 10 years or whatever it might be to put more water in, but they're reusing that water. And then air cooling, of course, has the lowest water demand, but would require more energy to move that air. If somebody, if a data center wants to come in and build in our city, they have to go through our adequate public facilities consideration process. We adopted that ordinance last August. And there's a whole detail they have to tell us what they're looking to do. And they will compare that to our capacity in that area, our capacity to supply. And so they do have a detailed study that they would have to complete. And if it doesn't exist, if there isn't any capacity, then the developer would have to add that capacity if they would want to continue with that data center. So this is just a slide to compare the water usage. The single family residential uses in the city use about a million gallons per month. So the evaporative cooling, which again is the least efficient, is about 10 to 60 million gallons a month. A closed loop cooling where you have that initial fill is about 150,000 gallons per month after the initial fill. And then the air cool is about 120. So it's just a little bit less. And then the total, down the bottom, total city of Irving water usage is about one to two billion gallons per month, just for scale. And I'll turn it over to Mark.

Okay. Thank you, Jocelyn. We'll talk about state and federal policymaking. And just to give you an overview of the order that we'll go through this, we'll talk about federal first, then state. We'll go over batch zero in case you've heard about that term being tossed around, and then the interim charges, and then talk about a couple of things and a little bit more specifics. So just as a refresher, this is the civics portion of this presentation. These are your federal representatives. We have our two U.S. senators and our three members of Congress who represent the Irving area. And so at the federal level, one of the more recent actions that's happened has been an executive order that's been signed by the president that was back in July of 2025. And this executive order expedited federal permitting for data centers and related projects. It basically put them on a expedited approval process called FAST-41, which really just streamlines things and gets things moving through the process a lot more quickly. The executive order also promoted the use of federal lands for placing data centers, as well as Brownfield and Superfund sites. More recently, there was the Ratepayer Protection Pledge that you may have heard about. That one was covered in the news quite a bit, I think. That was signed by Amazon, Google, Meta, Microsoft, the big hyperscale AI companies. And this was really an industry-motivated action. that the industry came and agreed to bring their own power to producing new data center projects. And this was accompanied by the Federal Ratepayer Protection Act, which has been filed. It's H.R. 9340. It's bipartisan. There are a Republican author and a Democratic author. And it would require, under federal law, tech companies to pay the full cost of providing power for those data centers. This bill has been introduced and referred to committee, but it has not yet received a markup or moved any further than that. So to the state delegation, we have our two state senators who represent parts of Irving, and we also have our three state representatives. And just as an aside, there's contact information for all of your state and federal representatives at the back with all the rest of the brochures. And if we are out or running low, come find me and I'll get you one. So here's a slide from ERCOT that I've seen now in a couple of presentations that they have given and I've stolen it for you. So this is an illustration of, you see, if you see the, I wish they would have chosen more contrasting colors, but if you look at the teal bar, that is where we are, everything but data centers. And you see, we are in 2026 at 98 gigawatts forecast load. If you look at, without data centers again, going into 2032, we'd be around 111 gigawatts forecast. Now, when you include the large loads, which is mostly we're talking about data centers, when you get out to 2032, that forecast goes up to 367, almost 368 gigawatts. So you see this scale of power that is increasing. estimated to be needed for some of the projects that are coming in and I will put a little bit of a caveat here because this is inclusive of all of the projects that have that are currently under application and and there's a little bit of a disagreement or it's unclear at least over how many of these projects are actual projects that could physically break ground versus how much of these are speculative and folks have just applied so that number is a little weird, but that's what we're going with for the moment. And just by the way, we had a ERCOT record demand yesterday of 91 gigawatts at 6 p.m. Wednesday afternoon. Fortunately, we had about 30 gigawatts of reserve capacity. So grid is working well. That's the good news. So what's some recent legislation? I'll give you four, four and a half bills here, one of which passed, the others did not pass. Senate Bill 6 is the one that passed, and this is a bill regulating large electrical loads, and you'll hear that term come up again and again. That is the way that the legislature refers to data center projects. They're large load projects. So this is a bill that passed a new regulatory structure for those types of projects. There were some other bills that were filed that did not pass, such as revising sales tax exemptions for qualifying data centers. This reference is a bill that was passed into law in 2013 that provided some sales tax exemptions. state sales tax exemptions for data center projects and was sort of, you could look at it as maybe one of the precipitating factors in why Texas is such a target destination for a lot of folks. Also, House Bill 5558, which would have addressed property tax exemptions and SGR 72, which would align with that previous bill and would have required a constitutional amendment. Anything that's a constitutional amendment means that we have to vote on it. So it goes to voters in November and it has to pass in order to become law. So delving into Senate Bill 6, because this was the big piece of legislation that passed last session. This created a new planning process for large loads, and large loads is defined as 75 megawatts and up. So really big power users. It would require them to help pay for transmission infrastructure. So if there needs to be high power transmission lines built out to carry power towards this project, then they got to pay for it. It also requires financial commitments before permitting. It requires demand curtailment during grid shortages. And what that means is that if we are in a winter storm situation where there is a concern that there is limited grid capacity, then those facilities can be ordered to curtail their usage and shut down. Now, it could also, Senate Bill 6, require these facilities to dispatch their on-site power to the grid during shortages. So if there is on-site generation available at these projects, they would be required, ERCOT has the ability to require them in an emergency scenario to push their power onto the grid to make it available for everyone else. So batch zero was really the big component of, or sort of the big outgrowth of Senate Bill 6, because as we said, you know, this is, Senate Bill 6 created a new large load permitting process. And what batch zero is in a nutshell is, it is replacing the process before it, which is basically a first come, first serve. I wanna build a data center, then I gotta submit my permits and it's first come, first serve as I go through the ERCOT PUC process. There are so many permits right now in the pipeline that ERCOT and PUC are now going to combine them all into a batch study. And what they wanna do in doing so is look at all of the projects, identify which ones are viable and are actually looking like they're going to happen and ensure that we have the grid capacity to support those and that everything is balanced out as opposed to doing it one piece at a time. So they are simultaneously creating the framework for what is going to be required of a data center developer or a developer who wants to get in on that and then how that process is going to move going forward. And right now, they have begun notifying folks who have been approved as part of this initial batch zero process. And I mentioned earlier, this is a requirement under Senate Bill 6, these financial security requirements, just giving you a little idea of what that looks like. $100,000 to $300,000 for an interconnection study fee per project, and then there's a $50,000 per megawatt interconnection fee. So if you're talking about, if you're someone who's wanting to build, say for example, a 200 megawatt hyperscale facility, that's a $10 million check that you have to write off to the state of Texas right off the bat in order to get your project off the ground. That is something that the state has implemented to try and weed out people who are just applying on spec and try to make sure they're talking about legitimate projects. So interim charges, we'll talk about this for a second. So where we are right now in the legislative process is we're in the interim. So the legislature is not actively in session at the moment. The legislature will convene in January of 2027 of next year. We're in the space between legislative sessions, which is the interim. But there's a lot of activity that happens during the interim. What happens is the Speaker of the House and the Lieutenant Governor each assign interim charges to the committees of their respective chambers. And if you wanna think about the interim charges, they're like homework. And it's the homework that each committee is assigned to study and come up with legislative recommendations, potential bills that can be passed in the next legislative session. And all of these interim charges were released earlier this year and committees have already begun to meet and talk about these things and take testimony and hear from stakeholders. And by the way, if you see anything on here that you're interested in, you can go down there and you can testify and you can send in emails and provide responses as well. But I just highlighted a few of them on here that actually speak specifically to data centers. And I'll go through them really quickly just to give you an idea of which committees are looking at data centers at the state and how they're looking at them. So Senate Business and Commerce Committee, they're looking at efforts to modernize transmission and enhance affordability. They are also looking at a specific charge, and this is the exact phrasing, of managing data center growth. The House State Affairs Committee, which is one of the big catch-all committees in the Texas House, is looking at data centers and the batch zero process. The House Natural Resources Committee has met several times now to talk about data center water use and conservation. And one of the things that they've been talking about is what does the state do in order to ensure some sort of a minimum efficiency standard for water usage for data center projects. So let's also talk about some things from the executive branch. The governor, Governor Greg Abbott, has proposed a couple of different regulatory ideas pertaining to data centers. He has asked, and he did this in the form of a formal letter to ERCOT and to the PUC, the Public Utilities Commission, and he asked them to require data centers to fully fund the cost of electric infrastructure. He has tasked them both with safeguarding residential and small business rate payers and asked them to take action to reduce residential rate payers' transmission costs by July 31st, 2026. And if you're following along, then that is coming up very soon, isn't it? So the governor has also proposed some legislation. He's proposed legislation that would require water-efficient cooling systems. Like I mentioned before, the House Natural Resources Committee is looking at what that legislation could potentially look like. Are they gonna require a certain technology? Are they gonna do it technology neutral? And they've received lots of testimony from lots of different stakeholders, both in environmental groups, as well as data centers, all talking about these topics. He's also called for legislation to phase out outdated tax incentives, as I mentioned, the 2013 tax incentive bill, adopting other practices that protect neighboring communities, such as setbacks and noise reduction. So in response to what the governor has called for, ERCOT and PUC, they issued a joint letter a couple of weeks ago that lined out what they have done in response to that directive. And this is their language, so this is not me interpreting it, this is what they have put verbatim. So they've said that they have improved ERCOT's load forecasting process, ensured new data centers don't take existing megawatts off the grid, evaluated the fairness of how transmission costs are charged and enhanced ERCOT's transmission planning process. And I put batch zero there in parentheses. That's what they're talking about. They've stood up the batch zero process. So some things that they say are ongoing. They are working on standards that large loads must meet to connect to the grid. This is batch zero, batch one, batch two. What are the state requirements for connecting to the grid if you're wanting to stand up a data center? Protecting consumers from the costs to interconnect large loads and creating new reliability tools using large loads and their backup generation. The ERCOT and PUC have also called for legislation, three components, one that would be to clarify the PUC's authority to adopt reliability requirements for all market participants, clarify their authority to require registration of large computational loads, and that's an interesting term there. That's the first time that I've seen that term, so I would highlight that and add that to your list of Google search terms if this is a topic that interests you, because that sounds like they're gonna start talking about them in that way now. Require large computational loads to comply with Lone Star Infrastructure Protection Act. And there's the acronym, LACIPA. So considerations for the legislature. What are the things that they are thinking about in their minds as they are contemplating potential bills to file in the next legislative session? So for one, what is a data center? What defines a data center? We kind of heard a little bit about that earlier in this presentation. There can be very large projects. There could be very small things that you wouldn't even notice if you drove by. It could be a data center. Is a data center a data center? How data centers are permitted and regulated. What is the role of local government in that process? What is the authority of ERCOT PUC? Transparency. What are some efficiency regulations that can be put in place, both in terms of natural resources like water, but also electrical efficiency? grid capacity, stability, and also security. One of the big topics that comes up in a lot of these hearings where legislators are talking about data centers is the security of the data centers and also the role of some of the data centers in national security and the potential for them to be targets of foreign state actors. So a lot of different dimensions to this topic that the legislature is trying to address. So here's the timeline. Right now, as I mentioned, we're in the interim, which sounds like a very calm and pleasant time, but it is a time of furious activity in Austin. Lawmakers are there every week. They're there most days holding hearings talking about these very issues. And in each one of these hearings, they are inviting public testimony, they are inviting stakeholders, and they are having the conversations that are going to shape the way these issues are addressed by the legislature when they convene. November 3rd, general election day, a day that should be on everyone's calendars. November 9th, the week after election day is bill pre-filing. What that means is now the legislature can start filing bills and they will start and they will come in in boatloads. Those bills will start getting filed and then you'll have an idea of, okay, what exactly are some of these legislators trying to do as pertains to data centers or any other topic that you may be interested in. December 31st of this year, every committee has to submit a report to the incoming legislature that includes the findings and recommendations that they have compiled over the course of the interim and all these hearings. So if you happen to go down and speak your mind to one of these committees, then a staffer at a committee office will dutifully take that down and they will collate and work that testimony together into a report that that that committee will ultimately submit to the 90th Texas Legislature by December 31st. And it'll include everything that they've found through testimony, and it'll include their ideas of bills that they want to see filed, and that you will likely see filed. And then on January 11th, we'll get what's called the biennial revenue estimate, which is something that the comptroller puts together every two years to tell the legislature how much money they have to spend. And then January 12th of 2027, the Texas legislature will convene and we will be off to the races. And that brings us to the end of this part. And I think we're ready for questions.

Yeah, I think that's right. Thank you very much. If you have question cards, just pass them to one of the staff.

While we're waiting for questions, Jocelyn, can you kind of go over where, not specific locations in the city, but how many data centers do we have in Irving and what are their general locations?

Sure. We have five. Some of them are single buildings. Some of them are campuses. So you may be familiar with a QTS. It's a 161 and 114. We have the one that is almost near Irving. finished construction on the Neiman Marcus site. We've got a couple called the Edge Data Center. They have two buildings now that are just off Loop 12, so in the southeast corner of the city in an industrial area. We also have, it's property that is near Cistercian, it's what we used to call PUD 6. It was taken out. They have the entitlement for that. They have not built it. I don't know if it's going to get built. They've got a lot of floodplain issues to work through. And the only one that has been approved by Conditional Use Permit is down off Graweiler, again, on the east side, almost Loop 12. They're working through that process now. I don't know if that will be constructed or not, but that is the only one that is even current. and is in play, and we have not had any recent requests for data centers.

And Jocelyn, my business, I use data centers for the last 30 years, so some in downtown, some in Irving. What really changed where we're getting these massive data centers, and I know the city reacted to it, but did we see any foresight come in that this whole world was changing this quick?

Yeah, what I understand, and Chad may be able to respond to a little bit more, we've always had data centers. Everybody, you know, you have the cloud and your phones and transferring, you know, paying online and your medical records. We've had data centers in our lives for a while, and they've made our lives better, I would assume most people would agree, at least more efficient, if nothing else. I think what really has put all this on steroids is AI. And the generation, the information capacity that is necessary for that is just exponentially greater than what the data centers are that we have in play now. And that's what we hear on the news, some of those hyperscale ones that are out, you know, often in rural areas, more typically in rural areas. We don't have... properties. Chad had talked about the hyperscale centers. We don't have that amount of land in Irving. So that really can't happen here. But that doesn't mean that we shouldn't be concerned. It doesn't mean that we shouldn't have created our standards because we care about our community. So that's really the difference is AI really kind of threw everything into hyperdrive.

Yeah, I would certainly agree with that. The hyperscale data centers, the very large campuses are very dense, high compute environments. There's hundreds of thousands of GPUs and CPUs that are being used to train AI models and also like autonomous vehicles, but mostly artificial intelligence requires that high density, high compute in order to operate and that's what's changed.

Okay, so we've got some questions about water. The first one is, what is Irving doing to protect our water source in regards to data centers? So we'll have our water director, Todd Rack, take a crack at that one.

Yeah, good evening, Todd Reck, Director of Water Utilities. So the water quality really hasn't been an issue for us. I know it can be with some of these newer technologies with the closed-loop systems where you're circulating, equated to like the radiator in your car that's circulating the same liquid around and around over a period of potentially even years. But we really haven't seen an issue with that. I know we have an environmental compliance team that stays on track of that. They go out and talk to these businesses pretty frequently to check on things. It really hasn't been an issue for us to this point.

And I'll just add to that as well, in addition to the water quality question. Because we have the conditional use permits in place, we go through the whole zoning process for every one of these when they come in. The last two, I believe, you know, three that we approved are either zero water or closed loop systems. And that's definitely something that we've been very cognizant of when we get these cases. We want to make sure that we are planning for the future of Irving, not just with, you know, what kinds of uses do people want to bring into our industrial areas, but also we want to make sure that we have this tremendous investment into our water infrastructure that was put in place 75 years ago, or that was started 75 years ago, and we want to make sure that 75 years in the future it's still going to be going strong. The other question I had on water was, basically the same one, so we'll move on to a couple of other questions. We got some on power here. This one's kind of both. How are the servers being cooled? By our water, power, our power? What are the city's plans in regards to the noise and air pollution being caused by the data centers? That's gonna hit most of you.

As Council Member Block said, all of them except for a couple of the older ones are being, they're in the closed loop systems. So they'll have that first fill. And after that, they may have some fills in the future, but they won't be constantly working on the water supply and needing more water. So that is something that when one goes through the conditional use permit process, through the zoning process, that's one of the requirements that we have now. is they disclose how they're going to do it and we require that it be a closed system. Does that answer the question?

I think so. So how do data centers construct their own electric grid? Which I think is more how are they going to be supplying their own power is more of the

I can give you one example. So there's a new hyperscale data center going up around Bastrop County down there just west of Austin. And they are building a $1.2 billion natural powered power plant in order to exclusively feed their data center. And there could be other uses if you

Yeah, you know, I would just add that that is one of the things that the legislature and the PUC and ERCOT are dealing with right now, and that is making sure that through regulation and through legislation that any additional transmission capacity that has to be brought online to power data centers is going to be paid for by that data center. So, for example, like I mentioned, you know, if you have to add transmission capacity to the grid, then... That's got to be that data center that pays for it. Now, there are also efforts to come up with regulatory and legislative answers to providing that additional power, providing that additional generation capacity to support those data centers. And that is an area of active regulation under ERCOT and PUC right now.

And Todd, I'll have you come back up on water costs for the residents. Do any of these data centers impact their monthly bill versus, well, I'll just let you kind of answer, what's the impact on our water bill from data centers or any other type of high-use people?

Really no impact. If you look at, we only have a handful of data centers in Irving and they really don't use much water. So if you look at the percentage of our overall water use, it's well below 1%. I would say on the good side is when they do use water, it can be a pretty consistent usage, which is the kind of customer that has less of an impact. The biggest impact we have in the system is when we have the big swings. Like we're seeing right now, everybody's irrigating, and the usage goes way up, and then the winter, it drops way down. So you have to build a system to meet that highest demand. So data centers really don't put that inconsistent load like a residential home would, so... Really no impact or very little impact.

Thank you. And Jocelyn, I've got the next question for you. Talking about the powerhouse, they're finishing their first building. Is there anything we can do on the second and third building? And maybe talk a little bit about the zoning process once it's approved. And is there anything we can do after the fact to put in things from our CEP?

Yeah, the powerhouse was built. zoned before we created the standards, but they are following the standards that we subsequently adopted. So they are supposed to use the buildings as that screen between any type of generation or outdoor equipment and the residential. They do have the setbacks. They have the wall, the fencing and the screening they should do. So all of that is set through the zoning. and it is consistent with our current standards now. So they don't have a specific site plan they're tied to, but they have to follow all the regulations that are in the site plan in their development standards. So the subsequent buildings, the future buildings two and three, won't have anything different, and we can't go back and apply anything. But again, they do have a set of standards they have to meet in order to be a good neighbor, as good as possibly they can be.

And Jocelyn, talking about trees. So I know QTS is donating 1,600 trees to the city. Encore got money, I guess, from Powerhouse for trees. Tell us about landscaping plans around these centers that are required as well.

Yeah, I'm not sure specifically what Powerhouse will be doing with those trees, if anything. They're not doing anything, as far as I know, these ones that we've done, anything above and beyond. The one on Grawaller does have a pretty extensive landscape plan that they had adopted with their conditional use permit because there are some residential properties adjacent to it. So they are doing a pretty heavy tree buffer, shrub buffer, in order to visually screen the large building, or buildings plural, from the residential property and from the street. Whether it's non-residential or industrial to any type of residential, there is a screening requirement along the property line that all of the data centers will have to meet as well.

Do you know what kind of cooling system they're using at that facility? We have a few questions on that.

Todd, you may know better than I do what that one is. The only one I know of that is not a closed cooling system is one of the older ones, and it's not powerhouse. Right. Thank you.

How many megawatts are data centers considered to use or permitted in Irving, and would you allow no-scale power plants? Megawatts?

I'll take a crack. So if you're talking about what is defining a data center, then the legislature is contemplating anything above 75 megawatts is sort of what they're deeming a large load customer. So for the purposes of state regulations, that's going to be kind of the threshold that you will be looking at, because that is what legislators are looking at when they're trying to target their regulations for, you know, what are we going to permit? What are we going to allow when they are required to be part of this batch process? It's that 75 megawatt threshold that you'd be looking at. So I don't know if that really answers that question, but we're doing our best.

Our next one's on noise. So maybe Jocelyn, you can tell us about zoning requirements for noise and maybe Shane, if you don't mind introducing yourself and talking how code enforcement looks at noise at industrial buildings like this.

Okay.

This is Shane Dillard, our code enforcement director.

Hi, how's it going? So our noise ordinance has a table that contains decibel level limits and data centers fall into the industrial decibels level limits, which are set at 75 decibels during the day and 60 decibels at night. And so when we've gone out proactively, to the known data centers and to some of the ones that are under construction to test sound there. And then anytime we were to get a complaint about noise at a data center, we would go out and we would make sure that the noise decibel levels that we're taking measurements of at the sidewalk of the data center are within the standards that the ordinance allows. And then if not, issue notice to the business and require that they make changes to come into compliance with that ordinance.

Thank you.

What is the city's position regarding data centers using small modular nuclear plants to power their facility?

I'll take a stab at this one because I went to an ERCOT meeting with the head of ERCOT, speaking about nuclear power. Number one, it's federal rules on nuclear power. You cannot put a nuclear power plant in without going through the federal government on that, and you cannot get the fuel source without the federal government permit on that. So it's not even a state issue, it's more of a federal issue. Also, we've been looking towards some of Abilene Christian's nuclear power plant, small nukes that they're doing. They're still 10 to 15 years away from any viable option. There's also no viable fiscal option on these small nuclear plants at this time. What the director of ERCOT said, and if we go to nuclear power, they need to build the large nuclear power like we have down at Comanche Peak and need to build these in series. If you look at a small nuclear power, what they're asking is about 10 megawatts. One of these buildings is 200 megawatts, so you're talking about 20 small nukes just for one building. building versus a gigawatt or more for one of the larger nuclear power plants like at Comanche Peak. So those are all big federal issues. We'll see what the federal government's doing and keep an eye on that from our legislative affairs but it is nothing none of that is going to happen fast at all compared to what's going to be needed to power these data centers from from Mark's presentation between now and 2032 or actually now and next year you know so there's a lot going on with your production centers in Texas that will not be nuclear nuclear please Nuclear, not nuclear. George Bush.

We also don't have, the plants that are wanting to create their own self-generation, be it nuclear or gas or whatever, those are on really large sites, hundreds of acres, if not up to thousands of acres. Irving does not have that much developable land yet or anymore. So we're seeing things on maybe 50 acres, 30 acres. So while it's a concern, it's good to be educated about, I don't think we're going to have that here because we just don't have room for that. So I just wanted to add that.

And I'm not sure who can answer this question, but we have some health questions about maybe, Chad, you got some research on any health issues versus a normal warehouse versus a data center on pollution, noise, or anything else?

Probably not the best one to speak to health, but we... The city of Irving is a client of one of the data centers here in Irving. We use it to power our infrastructure and to keep it up and stable. So I've certainly been inside and visited the data centers that we're a customer of. They do a very good job in terms of being good environmental stewards. For me, visiting the site, the noise is at a minimum. That's about all I have to offer on that question.

Right, and we've talked to them also about their generators, their backup generators. Those are not being used unless an emergency and not being tested full on very often. So maybe Shane?

Probably speak to it, yeah. We have some regulations in place about the testing of generators. Emergency generators have to be tested periodically, but they're only allowed to be run in the event of a power emergency, and they're only allowed to be tested during daytime hours, during business hours. Typically, I think our ordinance is 8 a.m. to 8 p.m., so that they can't be tested at a time when it would be more disruptive to neighbors than the normal noise levels in the neighborhood. Thank you.

Who pays for the additional substations, transmission lines, and grid upgrades needed to serve these very large loads?

Okay, so under the regulations that ERCOT and PUC are talking about, that's going to be on the data center. And that is really the focus of a lot of what is being discussed right now at the state level and at the federal level as well, really, is trying to make sure that there's a regulatory structure in place so that if those additional regulations infrastructures need to be built in order to put that project there, then that is going to be on the data center to do. It's one of the reasons why that they're requiring such big financial commitments on the front end from a lot of these projects to make sure that if something like that needs to be built, that they have the financial resources to do it. So that is where all of the legislative and regulatory momentum is at the moment. It is to ensure with belt and suspenders that these projects are paying their own way with regard to creating the infrastructure that's required to have them there. Also, the same with ensuring that they are providing some sort of an offset to make sure that residential rate payers aren't burdened by whatever their impact is on the grid overall. They are trying to make sure that they are paying their way and that there is not a cost whether... through taxes or through higher rates or any other side effect that is landing on homeowners. And I can tell you that legislators at the state and federal level are watching all of this really closely to try to make sure that they get it right. And right now, they are also very sensitive to all of this feedback. So it is a good time, if you haven't contacted your state or federal legislators, and again, contact cards are there at the back, if you haven't contacted them yet and let them know your thoughts or if you have concerns, Now is a really good time to do it because they're talking about all this, gathering feedback on all of this, and trying to make sure that they're thinking through these problems and coming up with solutions that are going to get where they want to be, which is that to the extent that we're going to have data centers and there are going to be new developments, that it doesn't impact the residential rate payers.

What city economic development incentives have been asked for and or given by Irving for data centers? Have we considered requiring registered capital bonds for projected employment by data centers? We're going to have Assistant City Manager Philip Sanders.

Philip Sanders, thank you. I'm not sure what registered capital bonds are. I'd have to... looked that up, I can't answer the question about economic development incentives. Just for a little context, in the not too distant past, before this rapid transformation to AI that occurred literally in just probably the past 12 or 24 months where they've become such a big issue, data centers were highly competitive economic development projects. On a per square foot basis, data centers produce more tax revenue ten times than really any other type of use that you would have. They're relatively low impact on infrastructure. They don't have a lot of employees that drive streets. They're basically a bunch of valuable property that is taxed every year. And so they became very highly competitive, coveted projects. In fact, so much so that you saw in 2013, the state actually offered a statewide incentive because they were rare and they were competitive trying to recruit this type of operation because the value that they can create for the community and lowering the tax burden on everybody else. So that's kind of the history and the city has in the past offered economic development incentives usually in the form of sharing or rebating a portion of the property taxes that they generate back to the data center operator. Those are not automatic for the city of Irving. They have to ask. They have to be reviewed. And ultimately, the city council is the only one that can authorize that. And they're reviewed on a case-by-case basis. I think on a go-forward basis, the world has changed. These are not as competitive projects. In fact, you really have the data center operators looking for space places, looking for communities that will even allow it. And so I think because the world has changed, because The climate has changed. You saw where the governor is wanting to phase out the state incentives. And I certainly think the city of Irving is going to take a much more judicious approach in the future as well.

Thank you, Phillip. And one final question. How does the humming from a data center affect honeybees? Mark? Roy, we're gonna have to go to the state for this answer, all right? Appreciate the question.

Get down to Austin during the interim charges and ask them to look into that and provide it to the legislature in their report.

And kind of one last question, maybe Jocelyn or maybe even Phillip. There's concerns on, you know, I have a data center in my neighborhood. It's affecting my property value. No one wants to buy my house. You know, these are concerns of citizens. What would be a good answer? And Phillip, I think I'll put this on your shoulders here.

I would say, first of all, if there are conditions associated with the data center that are of concern, please call the city. Call code compliance. Shane is responsible for taking a look at the operational standards, noise issues related to data center operations to determine if what they're doing violates the city code. And if it does, then we will take action to compel compliance with the operator. That would be the thing that I would encourage you to do the most. With regard to the construction of the data centers, again, if you feel like they're doing something that doesn't comply with the building code or with the development standard, please call, let us know. Those can be investigated. And again, we're committed to enforcing compliance with the standards that we have. I think that's the best answer I can give as we go forward and consider new data center projects. Each one of them has to be a zoning case. There is a public hearing associated with each request, and we would certainly welcome the public's input and testimony on any future projects that come forward. I'm sorry, could you answer the question about the... What it could be for your property values? Yeah, I'm not in a position to answer that. I don't know really. It's a site-specific issue, and I couldn't really speculate as to the effect the data center might have on a particular property. And I'm sorry, I'm just not in a position to really answer that. Oh, absolutely. I think, as Jocelyn talked about, that conditional use permit process, the effect that a project has on adjacent properties, whether it be residential or any other property, is of primary consideration of concern that the council would consider.

Thank you. We're not really doing Q&A verbal, but you've got everybody's number here. You've got to meet a lot of our, and a round of applause for our city staff. They do a great job for the city. It's a pleasure to get to work with them and see the great work they do day in and day out for our city. And I appreciate you all for being here. These are from our first topic with VIA and DART. There's a lot more left to our DART and VIA discussions going forward. I think we're really in the first inning of why we even... called for the original election with DART, and we want to make sure our public transportation works for everybody in the city at a cost-effective manner in the future. The data center is front and center. Glad you're all here. You've got to hear a lot, but don't stop here. Please email us. Please, you've got a lot of contacts. I've got commitments from the city that you'll be answered if it's a city thing within two weeks about any question you have. So if your answer today didn't fill some of the questions you have, please send them in, and the staff will make sure we get back to you. What is the best way, Mark, for everybody to reach individuals? Do we have it up there?

Right up there on the board. Please send us an email, and we'll get right back to you. Okay. And with that, we are adjourned. Thank you so much for coming.

Thank you.