Delaware on Tuesday denied permission for the planned Project Washington data center near Delaware City in New Castle County, saying it would violate the state’s Coastal Zone Act.
In a decision that cheered environmentalists, the Department of Natural Resources and Environmental Control said the project could pollute the environment at heavy industry levels by using an “unprecedented” 516 backup diesel generators, and by having a storage tank “farm” of more than five acres that would hold more than 2.5 million gallons of stored diesel fuel.
Both factors would constitute a violation of the 1971 law which was designed to limit industrial development in Delaware’s coastal strip, the agency said.
“With these risks and the intent of the Delaware Coastal Zone Act in mind, DNREC concludes that the proposed use is not allowed in the Coastal Zone,” the agency said in a nine-page decision.
Amid regional and national concern that data centers like Project Washington would swell electric demand beyond supply, DNREC said the chances of the generators being used increase because of questionable supply, especially in severe weather. A recent snowstorm prompted the U.S. Department of Energy to order the regional grid operator PJM to authorize the use of backup generation if needed.
“Were these proposed 516 generators to become subject to such orders on an ongoing basis, the potential to pollute would be significant,” DNREC said.
Starwood has 14 days to appeal the decision. It said Tuesday the project remains on track even after DNREC’s decision.
“We are absolutely confident the project will be successfully completed, and remain on track despite this decision,” the company said in a statement. “We are committed to working with DNREC, state and local regulators, and the entire community to make certain that Project Washington will be a state-of-the-art campus that will bring thousands of jobs to Delaware.”
The ruling follows the introduction of two bills that would assert state control over data centers and other large additions to electric demand in an attempt to shield ratepayers from the costs of big new power users.
State Sen. Stephanie Hansen (D-Middletown), lead sponsor of one of the bills, said DNREC made the right decision about Project Washington but that doesn’t mean the end of plans for data centers in Delaware.
“Make no mistake: this decision should not be viewed as a referendum on the future of data centers in Delaware,” she said in a statement. “Given the growing emphasis on technology and artificial intelligence, it’s clear that data centers are here to stay — and it’s up to us to implement meaningful regulations that balance economic opportunity with energy affordability and reliability.”
Hansen said the ruling “buys us time” to make the right decisions on how to regulate data centers in Delaware.
Hansen’s bill, SB205, would give the Public Service Commission authority to approve or deny new large-load users based in part on the effects they would have on residential electric rates. She has promised to amend the bill which failed to advance from committee last week amid opposition from trade unionists and Republicans.
In the House, Speaker Melissa Minor-Brown, a critic of Project Washington, welcomed the DNREC ruling.
“This decision reflects the very real concerns raised by residents about environmental impact, air pollution, large scale fuel storage, and the potential risks to our community’s health and quality of life,” she said in a statement on Facebook. “Those concerns were heard, carefully evaluated, and ultimately validated.”
Spokespeople for Republicans in the Delaware General Assembly did not answer an email seeking comment on the agency’s move.
Public concern over the effects of new data centers has also led to recent proposals by the Trump administration, PJM, and the governors of all 13 PJM states including Delaware for ways of making new large loads, rather than consumers, pay their way.
Critics also fear Project Washington, and several other planned data centers in Delaware, would add to air, water and noise pollution. When fully operational, the center would use 1.2 gigawatts of electricity, equivalent to about half of that currently used by the entire state.
Dustyn Thompson, director of the Delaware Sierra Club, called DNREC’s decision “a monumental win” for the environment. He argued that Starwood would have little chance of winning an appeal before the Coastal Zone Industrial Review Board if it resubmits its existing plans. Those clearly violated the Coastal Zone Act, as was correctly identified by DNREC, Thompson said.
“It was beyond comprehension that the project would have similar emissions as the three largest gas plants combined, and have those emissions at ground level, and not be heavy industry or five acres of hill tanks and not be a tank farm,” he said.
But Thompson predicted that Starwood will come back with a modified plan that addresses some of the environmental problems identified by DNREC.
“I don’t think this is a ‘no’ forever. I don’t think this is the last time we’ve heard about this project but I do think he’s serious that it’s not a ‘yes’ at any cost,” Thompson said, referring to Gov. Matt Meyer, who has said consumers should not have to pay higher bills if big new energy users plug in to the grid.
Dave Carter, a New Castle County councilman who has proposed an ordinance to protect residents from air, water and noise pollution from data centers, said DNREC had come to the right conclusions that Project Washington as planned would violate the Coastal Zone Act.
“I didn’t see any other decision they could make,” said Carter, who worked for DNREC’s Costal Programs unit for more than 20 years. “They did a very thoughtful legal and technical review, and they had the courage to make the right decision.”
He said Starwood is unlikely to succeed in any appeal based on the current plan because DNREC’s ruling is thorough. But it’s possible the developer will submit a new plan, he said.
The ruling is likely to apply also to several other planned data centers, most of which are also in the Coastal Zone, Carter said.
He said he will continue to argue for adoption of the ordinance, although he may amend it to include new zoning for data centers.
Another New Castle County Councilman, Kevin Caneco, also praised DNREC for what he said was accurate analysis of how Project Washington would violate the Coastal Zone Act.
“As so many constituents have been saying for months, we believe such a project is clearly a heavy industrial use that could do substantial harm to our coastline and communities that live near them. Today was a victory for my constituents and our environment,” Caneco said in a statement.
Read full DNREC decision here:
