Why Should Delaware Care?
The plan for a massive data center near Delaware City has garnered backlash from residents who are worried about its potential impact on energy costs and the environment. Today’s ruling could stop the project from moving forward entirely.
Delaware’s environmental agency ruled Wednesday morning that a plan for a massive data center near Delaware City is not allowed under the state’s Coastal Zone Act.
This decision could stop the project from moving forward entirely, unless developer Starwood Digital Ventures wins an appeal or makes major changes to its design. It has until Feb. 18 to appeal the decision to the Coastal Zone Industrial Control Board, an administrative panel.
The Delaware General Assembly passed the Coastal Zone Act in 1971 to protect the state’s shorelines from the impacts of new heavy industry.
The Delaware Department of Natural Resources and Environmental Control (DNREC) decided that the proposed data center near Delaware City, dubbed Project Washington, is not allowed under the law primarily because of its diesel generators.
The data center plan calls for 516 backup diesel generators that would operate in the case of a power outage. They would together need 2.5 million gallons of stored diesel, which DNREC Secretary Gregory Patterson called “entirely unprecedented” in his ruling.
“The large tank farm that is incorporated into this proposal will pose exactly the types of risks that justify the categorical exclusion of such a tank farm from the Coastal Zone,” Patterson wrote.
The most backup generators currently at a facility in the Coastal Zone is eight, he wrote.
Reactions from Delawareans
New Castle County Councilman Dave Carter, who previously worked for DNREC and has been trying to regulate data centers, said he thought the agency made the right decision.
“Personally, I didn’t see how they could find the decision any other way,” he said.
Carter said he believes an appeal of the decision would be “a difficult, very long process” and that Starwood may have to try to find other ways to generate the backup power needed to keep the facility running 24/7.
State Sen. Stephanie Hansen (D-Middletown), author of a data center regulation bill, wrote in a statement that she agreed with DNREC’s decision but that it “should not be viewed as a referendum on the future of data centers in Delaware.”
“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 wrote.
Dustyn Thompson, chapter director of Sierra Club Delaware, called the decision a “monumental win for the environment.”
“We applaud the Department and the administration for standing up for our environment and our communities and ensuring that neither bears the brunt of this new heavy industry,” he wrote in an emailed statement.
House Speaker Melissa Minor-Brown, who represents the district where Project Washington would be located, posted on Facebook thanking those who submitted public comments to DNREC ahead of the decision.
“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 wrote. “Those concerns were heard, carefully evaluated, and ultimately validated.”
Delaware Building Trades President James Maravelias — who has been a leading advocate for the project and the construction jobs it could bring — said the state needs to find a workable solution to its data center controversy that can provide new jobs, and implement guardrails onto the industry.
He also noted that the specific fight over the Starwood project isn’t over, citing the developer’s right to appeal.
Starwood representatives did not immediately respond to a request for comment.
Decision is major milestone for CZA
Then-Gov. Russ Peterson, an environmentalist champion, shepherded the Coastal Zone Act to passage in 1971 as Delaware saw a rising trend of industrialization creeping down the shores of the Delaware River from Pennsylvania and New Jersey.
The act was the first coastal zone prohibition enacted anywhere in the United States, and even pre-dated federal environmental efforts like the national Clean Water Act.
Since being approved more than 50 years ago, Delaware’s Coastal Zone Act has largely proved to be a deterrent to controversial developments within the coastal plain, or the land roughly east of U.S. Route 13/113 and Delaware Route 1.
Existing industrial sites were grandfathered in, but new heavy industrial sites would undergo additional regulatory scrutiny to make sure that they did not pose a threat to the health of residents or the environment.
In the last few decades, industrial users like Fujifilm and Veolia have received modifications to their operations permits under the CZA, while new projects have been limited to uses like a marijuana processing facility and a fish smoking plant.
Its most famous utilization was a 2008 case that denied a liquefied natural gas terminal and was ultimately upheld by the U.S. Supreme Court – but that terminal was actually being built in New Jersey. Delaware state officials denied New Jersey’s ability to build a pier into the First State’s territorial waters of the Delaware River by using the CZA, which Supreme Court justices agreed with.
The CZA has never been used to deny such a high-profile project here in Delaware though, which marks the Starwood decision as a watershed moment for DNREC’s enforcement of environmental regulations.