Tipton County residents will have the opportunity to weigh in Monday on proposed rules that would decide where data centers and cryptocurrency mining operations could be built in the county and what developers would have to show before getting approval.

The Tipton County Commission will hold a public hearing on an amendment to the county zoning resolution that would define both types of facilities for the first time and set standards for them. The Tipton County Regional Planning Commission recommended the amendment Aug. 24.

Here is what the county’s proposal does and what it doesn’t do.

What the proposal does

1. Defines data centers and crypto mining

The amendment defines a data storage center as a facility used mainly to store, manage, process and transmit digital data, often called a “server farm.” The definition also takes in battery energy storage systems, accessory energy generation systems and energy reclamation systems, so on-site batteries and power generation fall under the same rules.

It defines cryptocurrency mining as industrial-scale computing that validates transactions on blockchain networks. Computers solve complex math problems that take enormous processing power, and operators are paid in new cryptocurrency. Operations range from small setups to large “mining farms.”

2. Limits where they can go

Both would be allowed only in the county’s I-1 industrial zoning district, and only as a special exception. A special exception is a use that is not automatically allowed but can be approved case by case after review. In Tennessee counties, the Board of Zoning Appeals typically decides special exceptions.

The proposal says these facilities generally belong in industrial areas that already handle heavy utility use and are buffered from neighborhoods because of noise and vibration.

Sets five requirements

On top of other county rules, a developer would have to provide:

1. Proof of approval from the electric utility, including an inspection report showing the project would not affect existing customers or hold back future development nearby.
2. A noise mitigation plan, with a sworn statement verifying operating sound levels, if the site sits next to residentially zoned land (FAR, R-1, R-2 or R-3 districts).
3. A 300-foot buffer between all buildings, generators and cooling systems and any residential district. Accessory structures, including generators and cooling systems, must also meet existing county rules for accessory structures.
4. A decommissioning plan, filed with the site plan for Planning Commission approval, explaining how the facility would be shut down and the site restored, and showing the company can afford it.
5. Copies of all state and federal permits required to operate.

The rules would take effect as soon as the commission passes them.

What the proposal does not do

• It does not ban data centers or crypto mining. It sets the terms under which they could be approved.
• It does not approve any project. Each would still go through its own review.
• It does not apply inside city limits. Covington, Atoka, Munford, Brighton, Mason, Garland and Gilt Edge handle zoning inside their own boundaries.
• It does not set a specific noise limit, such as a maximum decibel level.
• It does not address water use, which is one of the biggest concerns raised about large data centers nationally.
• It does not distinguish between a small server building and a massive facility. The same rules apply regardless of size.
• It does not require a bond or other financial guarantee for cleanup, only a plan showing the company has the means.
• It does not require ongoing reporting once a facility is running.

Covington working on moratorium

The county isn’t the only area discussing data centers.

Covington’s Board of Mayor and Aldermen voted Sept. 22 to have city attorney Rachel Simmons move forward with a moratorium on data centers in the city. Alderman John Edwards made the motion.

“We unofficially asked for our city attorney to work on a moratorium on data centers, but I would like to make it a little more formal,” he said.

When an alderman asked how long a moratorium would last, Mayor Jan Wade Hensley said the motion only allowed the attorney to begin the work.

“I’m not for them, don’t get me wrong,” Hensley said of data centers.

Simmons told the board a moratorium would have to start at the city’s Planning Commission, a process she said can take time. She said she would bring a resolution to the board’s next meeting stating the city’s intent to pursue a moratorium. Once it is adopted, she said, Director Lessie Fisher would not accept data center applications because an ordinance would be pending.

Simmons said a pause could last until the city adopts its own regulations or until state or federal rules are in place. She said officials around the country are still learning what goes into these buildings, including where they belong and how they should be designed.

Edwards said he was encouraged that technology tends to shrink over time and hoped future data centers would need less space, energy and water.

The motion passed by voice vote with no opposition heard. The board will decide later how long a moratorium would last.

How to weigh in Monday

The Tipton County Commission’s public hearing is at 5:45 p.m. Monday, Oct. 12, at the Tipton County Justice Center, 1801 S. College St., in Covington. All interested residents are encouraged to attend.

A copy of the proposed amendment is available at the Tipton County Building Inspector’s Office during regular business hours.