photo by: AdobeStock

Data centers to power artificial intelligence have been built on agricultural land near Dublin, Ohio, pictured in this undated photo.

Normally, an electrical substation between agricultural fields in Harvey County drew little attention from residents. But then, the trailers showed up. They were filled with machines.

Noisy machines.

Questions about the operation grew, with the most from planning officials in Harvey County. They didn’t know what the noisy machines were either. Come to find out, the machines were high-powered computing equipment that was “mining” for cryptocurrency – a type of digital money created by computers solving complex equations.

The entire process takes a lot of electricity, so the owner of the trailers figured the location next to an electrical substation was a good one, especially since the electric cooperative that owned the substation didn’t object. Harvey County planners thought differently. They told the cooperative that nothing in the county’s code said such an operation could locate in the county.

The crypto company’s response: Nothing in the county’s code said such an operation couldn’t locate in the county.

Today, the same answer could be given in Douglas County. The county’s codes don’t specifically address cryptocurrency facilities nor their larger cousins – data centers, which use even more power, more water and are considered the key to America becoming the world leader in artificial intelligence.

In Harvey County – which is just north of Wichita – the lack of code language led to a two-year lawsuit with the landowner and the crypto company, which Harvey County eventually won. But the ordeal caused county officials to dig into their codes. They’ve now approved a moratorium on all such projects, meaning no such projects can apply to locate in the county until the county finishes writing codes on the matter.

Douglas County doesn’t have a moratorium, but it is surrounded by interest in such projects. Large data center projects are proposed just outside the county in De Soto and rural Tonganoxie.

Thus far, Douglas County officials are betting they don’t need a moratorium while they work to write language in their codes. The code-writing process though is proving to be a complex one. The county’s planning staff has been working for more than 20 months on the project, and hasn’t yet created a draft code to consider. County officials told the Journal-World they don’t yet have a timeline for completion.

Given that, is Douglas County at risk of having its version of a noisy trailer arrive on the scene? County officials say no. While Douglas County doesn’t have a moratorium in place, it has something else it intends to rely on. County officials say the county is in a “de facto pause” until its regulations for data centers, cryptocurrency facilities and battery energy storage complexes – often used to store renewable energy – can be presented to county commissioners for approval.

Moratorium vs. ‘de facto pause’

Several counties have opted to go the route of passing an official moratorium on such projects. Saline, Sedgwick and Jackson counties have moratoriums in place for data centers, the Journal-World found.

In Harvey County, Karen Rothe, planning, zoning and environmental director, said a moratorium seemed to be the clearest approach to send the message that such projects should not apply for consideration currently.

“We don’t have any applications in Harvey County, but I know there’s some interest in putting those types of projects in Harvey County,” Rothe said, adding that it also helped keep people from worrying about a development setting up near them.

While a moratorium is an officially, legally-adopted action, Karl Bauer, a planner with Zoning and Codes, said Douglas County has zoning regulations in place outlining how staff would approach a use not listed under permitted uses.

Douglas County’s zoning regulations say that when a use is not listed under permitted uses, the director of zoning and codes has the authority to classify it into the closest existing land use category by evaluating factors such as the nature of activities, space and equipment used, staffing, hours of operation, site layout, transportation impacts, and how the use presents itself.

If no comparable category can be identified, the director must initiate an amendment to the zoning regulations to formally define the use, establish any use-specific standards and clarify where it is allowed.

“In this case, staff identified that battery energy storage systems, data centers, and digital asset retrieval do not align well with existing categories in the code,” Bauer said via email. “Based on that, staff brought forward a request to initiate a text amendment to the County Commission to evaluate how these uses should be defined and addressed in the zoning regulations. That process is underway.”

Bauer said if a company submitted an application today for either of these uses, “there would be no determination on that application pending completion of that process.” In other words, the county’s planning staff wouldn’t consider any application for a data center, crypto facility or battery energy storage until the codes are written.

That’s basically the same end result a moratorium would have, but there is a difference. A moratorium is an official, binding act by the County Commission, while the de facto pause is a statement by the county’s staff on how it intends to handle any such request.

photo by: AdobeStock

Computer equipment used for mining cryptocurrency is pictured in this undated photo.

When are regulations coming?

As the Journal-World reported, county commissioners initiated a text amendment in 2024 to its zoning and land use regulations to add data centers, battery storage facilities and cryptocurrency mining operations as potential conditional uses in certain zoning districts and develop standards.

This July, it will mark two years since commissioners initiated the process, and the topic of these three operations will be discussed on Wednesday, May 6 during a work session with county commissioners. No action will be taken following the session, as it is for informational purposes only.

The discussion with commissioners is expected to provide an update on staff’s progress and outline key policy considerations, Bauer said.

“These uses can involve complex and evolving considerations, including infrastructure demands, land use compatibility, noise, and safety,” Bauer said in the email. “The current focus is compiling clear information as regulations are drafted.”

Staff plans to use that opportunity to seek direction from the County Commission on how they want the regulations to take shape. No timeline has been established for when the Commission will formally consider regulations.

Bauer said staff has researched these uses, reviewed regulations in other communities, and consulted with industry, national planning and energy organizations.

Commission Chair Shannon Reid told the Journal-World via email that there are “many significant impacts to carefully consider, from lots of angles.”

“My own personal research, so far, informs me there are very few and limited areas such uses are appropriate. And, there are many variables to consider,” Reid said, adding that she hopes to learn more from staff’s assessment to determine whether or not there may be any areas in unincorporated Douglas County appropriate for these activities.

Opposition but possible benefits

While there’s been plenty of opposition for data centers and cryptocurrency mines over their heavy demands on electricity, water and infrastructure, some communities have liked the idea of data centers – like De Soto. City leaders there believe a multi-billion dollar development just east of the Douglas County line could transform De Soto’s economic landscape, generate long-term tax revenue and leverage existing infrastructure upgrades.

Thus far, data center companies have not made formal proposals for projects in Douglas County, Bauer told the Journal-World. He said the county will not consider any applications for these operations until its code-writing process is complete, and also noted that the county has not received any such applications either.

There, however, was some known interest for one such project in the county – a battery storage facility. Back in 2024, Bauer told commissioners the county has received inquiries from developers seeking to construct battery energy storage systems. Additionally, a battery facility was initially considered by applicants for a massive solar farm, the Kansas Sky Energy Center, but it didn’t make it into the final proposal to the County Commission.

It’s not clear what changed their minds, but a development manager for Savion previously told the Journal-World there are no plans to have a battery energy storage facility.

As counties across Kansas continue to grapple with how to regulate fast-moving developments like data centers and cryptocurrency operations, Rothe often gets quizzed about what Harvey County went through. While Harvey County chose to implement a moratorium to address the issue, she said there’s no one-size-fits-all approach to zoning and land use decisions.

“I hear this a lot, this county is doing this and this county is not doing this,” Rothe said. “It’s OK, because their county make up is different, their land is different, their uses are different, so they’re not going to have the same regulations as us, and they’re not going to take the same steps as us.”