Montgomery County Approves 18-Month Data Center Moratorium

Montgomery County lawmakers on Tuesday halted development of large data centers, the latest in a growing wave of moratoriums happening in the D.C. metro area and across the U.S.

The county council voted unanimously to institute an 18-month pause on permits for data centers that demand at least 25 megawatts per month and don’t yet have a building permit.

The council also approved a zoning text amendment that defines large data centers and prohibits their use anywhere in the county.

The two measures combined will “allow the necessary time for the Council to deliberate regarding appropriate guardrails for large data centers,” a council spokesperson told Bisnow in an email after the vote.

“Nothing will happen until we answer all the questions our community deserves,” Councilmember Evan Glass, the lead sponsor on the moratorium bill, said before the vote. “There are a lot of questions about what happens to the water in the Potomac River, what happens to our utility bill payers, and what happens to the community as a whole.” 

“It is my hope that over the next 18 months we have some very serious and earnest dialog with all of our stakeholders to answer these questions,” he added.

The ZTA says it does not apply to facilities “used primarily for manufacturing, quantum computing research, biomedical research, or medical care,” cable communications systems or institutions for higher education.

While Montgomery County sits next to Virginia’s Data Center Alley, the world’s largest concentration of the digital infrastructure behemoths, it hasn’t yet seen much data center development, and it currently has no hyperscale data centers. 

The county is weighing its first hyperscale data center proposal: Atmosphere Data Centers’ plan to build a 300-megawatt campus on a former coal plant in Dickerson.

The 18-month moratorium extends a six-month pause on data center permits, enacted through an executive order by Montgomery County Executive Marc Elrich in June.

Atmosphere challenged the six-month pause earlier this month, arguing in part that Elrich lacked the authority to enact such a moratorium. A spokesperson for Atmosphere told Bisnow in an email the new legislation would apply to the Dickerson project.

Atmosphere CEO Chuck McBride said in an emailed statement the company was “disappointed” by the council’s decision and will “take the time to fully evaluate the Council's action and determine what it means for the Dickerson project.”

Next door to Montgomery County, both Prince George’s and Frederick counties also enacted data center development pauses this month. Prince George’s County approved a two-year moratorium on hyperscale development, while Frederick County is pausing new data center development through the end of the year.

New York became the first state to enact a moratorium when Gov. Kathy Hochul signed a yearlong freeze on large data center construction on July 14. At least a half dozen other states are also weighing statewide bans on data centers, according to the National Conference of State Legislatures.