The Hill County Commissioners Court in North Texas has made a significant reversal, rescinding a one-year moratorium on new data center development just two weeks after its implementation. This decision comes in the wake of a $100 million lawsuit filed by RCM Hill, LLCa developer with substantial investments in a proposed data center project.
The moratorium, which was the first of its kind in Texas, aimed to pause new data center, power generation, and large battery storage projects in unincorporated areas. However, the Legal challenge from RCM Hill, LLC, argued that the county had exceeded its lawful powers by imposing the ban, potentially disrupting the developer’s plans and investments.
The Legal Battle and Its Implications
RCM Hill, LLC, filed its lawsuit on May 27 in federal court in Austin, claiming that the moratorium threatened their ability to meet standards set by state electricity regulators. The company had already invested nearly $1 million and secured contracts to purchase more than 800 acres of land for a data center project known as Project Aquila.
The lawsuit alleged that the county was aware of the legal concerns before approving the moratorium. County Judge Shane Brassell reportedly stated during a meeting that the proposal was illegaland County Attorney David Holmes advised that the county lacked the authority to enact such a ban. Despite these warnings, the moratorium was initially approved on a 3-2 vote.
The County’s Response and New Policies
In response to the lawsuit, the Hill County Commissioners voted unanimously to rescind the moratorium and adopt a new checklist for data center developers. County Judge Brassell expressed that while the moratorium did not achieve its ultimate goal of stopping all projects, it did encourage some less desirable projects to leave the county.
The new checklist requires developers to provide detailed information about their projects, including expected water use, traffic impacts, noise levels, and economic effects. This move aims to increase oversight and ensure that major industrial developments are thoroughly vetted before approval.
The Broader Context of Data Center Development
The reversal of the moratorium comes as similar battles are emerging across Texas, particularly in unincorporated areas. According to reports, almost half of the planned data centers in Texas are set to be built in these areas, up from 12% currently. Unlike cities, counties in Texas typically lack the power to block development, making it challenging to regulate the rapid expansion of data centers.
Despite the rescission of the moratorium, the federal lawsuit remains active. RCM Hill is seeking declarations that the policy was unlawful, along with injunctive relief and compensation for alleged economic harm. It remains unclear whether the company will continue to pursue litigation over the newly adopted checklist.
