Thursday, June 4, 2026

Monterey Park Bans Datacenters by Ballot. Texas Cities Write Rules Instead.

Monterey Park's 86% ballot ban marks the first voter-enacted datacenter prohibition in the country, while New York and North Carolina advance their own structural restrictions. Texas cities are taking the opposite path with codified setbacks and metered water caps, and the developers shaping those drafts at the commission level are the ones who'll still be building in 2027.

Today's Lead

The transparency gap is now the dominant political risk in datacenter development, and three separate signals confirmed it this week: Monterey Park voters approved the first voter-enacted municipal datacenter ban with 86% support, New York's legislature moved toward a one-year permitting moratorium, and Erin Brockovich's crowdsourced map crossed 2,716 community reports with Texas leading the dataset. Each signal traces back to the same root cause: developers arriving with NDAs and shell companies before residents knew a project existed.

Texas isn't immune. San Angelo is about to adopt closed-loop water rules, Fort Worth votes August 11 on noise and setback standards, and Hill County already paused construction for a year.

[1]·[2]·[3]

Politics

Opposition is getting structural, and Texas municipalities are writing the rules first.

Monterey Park's 86% ballot vote killed a 50 MW HMC StratCap project even after the developer withdrew, because Mayor Elizabeth Yang wanted a ban a future council couldn't reverse. New York's omnibus bill (A.11560/S.10642) bundles a one-year hold with mandatory utility rate reclassification, DEC environmental review, NYSERDA efficiency targets, and renewable PPA requirements. North Carolina's SB 730 bans local tax incentives for datacenters while fast-tracking Duke's nuclear build. The Wimberley View ran an op-ed calling for a Texas moratorium outright.

The Texas response is more disciplined. San Angelo's June 2 second reading caps initial cooling fill at 8 gallons per square foot with separate metering and five-day council reporting on exceedances. Fort Worth's August 11 vote codifies 250-foot residential setbacks, 300-foot generator setbacks, and noise studies at property lines, while preserving compute-only datacenters and banning crypto mining as a primary use. Risk: developers who arrive after these votes inherit rules written without them. The ones engaging zoning commissions now shape the standards.

[1]·[2]·[4]·[5]·[6]·[7]

Power

PJM's $23 billion capacity-cost warning is what happens when generation can't outrun load.

PJM's independent market monitor reports datacenter growth has added more than $23 billion to capacity market costs since 2025, with the capacity shortfall widening from 208.7 MW in the 2026/2027 auction to 6.5 GW in 2027/2028. Pennsylvania Gov. Josh Shapiro's December FERC complaint stated it's "currently physically impossible for new resources to respond to high BRA signals." Meanwhile, Arizton projects $494.49 billion in U.S. datacenter investment by 2031, and Pia Orrenius told ERCOT's board that datacenter construction hit 9% of total Texas construction activity by year-end 2025, up from 5.7%.

The market response is on-site gas. Caterpillar secured a 2 GW commitment from American Intelligence & Power Corp. for the Monarch Compute Campus in West Virginia using Cat G3516 sets with seven-second ramp, and Wärtsilä booked 300 MW for an Ohio facility. Risk: Orrenius flagged "more challenges for ERCOT" ahead, and Virginia retail prices are already edging up. The Texas window on cheap permitting and spare queue capacity is open, not permanent. Developers who secure generation before submitting interconnection requests stay ahead of the curve PJM is now riding down.

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Sources we cited

11 articles across 9 publishers · 283 reviewed today

[1]Datacenter Knowledge
California City Approves First Voter-Enacted Data Center Ban
Jun 3, 2026·Monterey Park residents overwhelmingly backed a ballot measure prohibiting data centers, locking in a ban after months of opposition to a pr…
[2]Post Journal
State likely to pass data center moratorium
Jun 4, 2026·Assembly Speaker Carl Heastie is pictured at his seat on the Assembly floor. Heastie said this week that a one-year moratorium on data cente…
[3]Dallas Express
Erin Brockovich Exposes Lack Of Transparency In AI Data Center Boom
Jun 3, 2026·Environmental activist Erin Brockovich is raising concerns about the rapid expansion of artificial intelligence data centers across the Unit…
[4]Fort Worth Report
Fort Worth could ban cryptocurrency mining. Data centers might be here to stay
Jun 4, 2026·City Council members will vote in August on data center-focused regulations on water, noise, land uses and business incentives.
[5]Yahoo
City to vote on data center water use, wastewater discharge regulations
Jun 1, 2026·SAN ANGELO, Texas (Concho Valley Homepage) — The San Angelo City Council is poised to vote on whether to adopt water use and wastewater disc…
[6]WRAL
NC House passes bill to crack down on data centers, fast-track nuclear power
Jun 3, 2026·New restrictions on data centers in North Carolina are a step closer to becoming law after the state House of Representatives voted to appro…
[7]Wimberley View
For the Future of Texas, Pause Data Centers
Jun 3, 2026·Texas has always been a state that builds things. We farm, ranch, and produce the food, fuel, and fiber that power America. We champion grow…
[8]Datacenter Knowledge
PJM Monitor: AI Data Center Growth Reshaping Power Markets
Jun 3, 2026·AI-driven load growth is colliding with queue delays, supply shortages, and outdated power market assumptions, warn PJM and Pennsylvania reg…
[9]Datacenter Knowledge
Replacing Diesel in AI-Scale Data Centers: Gas Engines, Turbines, and Steam
Jun 4, 2026·Natural gas reciprocating engines and gas turbines are rapidly replacing diesel generators for both backup and primary power, offering clean…
[10]Dallas News
Construction activity, employment booming in Texas due to data centers
Jun 2, 2026·Construction workers build out the rooftop chillers and the water lines that will feed them atop Dallas TX4, which is under construction at …
[11]Yahoo Finance
U.S. Data Center Market Investment to Reach USD 494.49 Billion by 2031- Exclusive Insights by Arizton
Jun 3, 2026·CHICAGO, June 3, 2026 /PRNewswire/ -- Industry Analysis Report, Regional Outlook, Growth Potential, Price Trends, Competitive Market Share &…

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