Austin Council Fast-Tracks Data Center Rules, Eyes Hyperscale Ban

Austin City Council unanimously approved a resolution August 27 directing staff to draft binding data center regulations citywide. Item 61 requires staff to return rules to council by end of 2026, fast-tracked from spring 2027.

Council members Vanessa Fuentes, Ryan Alter, Mike Siegel, José Velásquez and Krista Laine back a full ban on hyperscale data centers. Proposed rules are expected to limit data centers to certain locations and set new construction standards and permitting, planning and monitoring requirements. Members seek zoning limits prohibiting data centers exceeding 20 megawatts, 100,000 square feet or 5 acres. In the interim, council must be notified of any data center project request exceeding 20 megawatts of electricity or 85 million gallons of water a year, and city departments will hold off on approvals while the rules are drafted.

Austin has about 10 data centers on Austin Energy's grid, ranging from 1 to 20 megawatts. None qualify as large-load users of 75 megawatts or more under Texas law. Hyperscale facilities can exceed 100 megawatts, enough to power about 25,000 homes, and span more than 1,000 acres. City code currently categorizes data centers as communications services with no specific land use definition.

A second phase covering development and environmental standards is expected in spring 2027.