Rapid City SD – Rapid City’s proposed data center rules return to the Planning Commission on Thursday, Nov. 5, nearly two months after commissioners pushed the item back because they couldn’t reach consensus in the time they had.
The ordinance, File 26OA006 / Ordinance 6746, would replace the city’s current approach, where any data center is a permitted use in Light Industrial and Heavy Industrial zoning with no rules on cooling, generators or noise.
In its place, the city would sort data centers into three tiers by power and water use: small ones allowed by right, mid-sized ones allowed only with a conditional use permit, and the largest banned outright inside city limits.
The packet posted for Thursday includes the ordinance, a staff memo, a one-page handout, the state’s new data center law, and 41 pages of public comment. Here’s what’s in it.
Where it stands
The Planning Commission voted 9-0 on Sept. 10 to continue the item to Nov. 5. After Thursday, the city’s posted schedule sends it to:
- Legal & Finance Committee: Nov. 10
- City Council, first reading: Nov. 16
- City Council, second reading: Dec. 7
The petitioner is the City of Rapid City. The staff contact is Jessica Olson, Current Planning Division Manager, and the Development Review Team recommends approval.
What the ordinance would do
City Council first defined data centers and made them a permitted use in both industrial districts on Dec. 16, 2024. The staff memo says that in the years since, the problems tied to data centers — water, sewer, electricity, noise and vibration — have become “well-researched,” and the current ordinance addresses none of them.
The new version sets three tiers. Power is measured as peak demand in megawatts (MW); water in gallons per day (GPD).
| Tier | Power | Water | Status | Distance from residential zoning |
|---|---|---|---|---|
| Micro | Up to 10 MW | Up to 4,000 GPD | Permitted by right | 500 feet, or a conditional use permit |
| Large-scale | More than 10, less than 50 MW | Up to 10,000 GPD | Conditional use permit | 1,000 feet |
| Hyperscale | 50 MW or more | More than 10,000 GPD | Prohibited | — |
The micro and large-scale water limits exclude the initial system fill and irrigation. Distances are measured property line to property line, from any zoning district that allows residential uses.
The city’s handout translates those numbers into households: a 10 MW micro data center draws the power of roughly 4,000 to 8,000 homes, and 4,000 gallons a day is about what 13 homes use. The 10,000-gallon large-scale cap equals about 33 homes.
Every permitted or conditional data center would have to:
- Show a utility has agreed to provide adequate water and sewer capacity, and get a “Will Serve” letter from the electric utility confirming it can serve the site
- Use non-evaporative cooling, such as air-cooled or closed-loop systems. Evaporative cooling is banned
- Schedule full cooling-system refills with the water provider, which can restrict those fills “based on availability and current conditions”
- Document what’s in the cooling system, its maintenance schedule, and how used coolant will be disposed of
- Limit generators to emergencies, testing, maintenance and commissioning, and meet EPA Tier 4 emissions standards
- Commission pre- and post-construction sound studies, paid for by the applicant
- Keep noise at the property line to 65 decibels during weekday daytime hours (7 a.m. to 8 p.m.) and 60 decibels nights and all weekend, measured on both the dB(A) and dB(C) scales
- Avoid vibration or infrasound that causes “perceptible resonance” in buildings or affects the human body
- Test generators only during weekday daytime hours, for no more than an hour, unless the Building Official approves otherwise
- Pay for the water infrastructure needed so the data center doesn’t block other development in the area
The city or utility could request data showing a facility’s actual power and water use stays within its limits, and could “deny or limit the size” of a proposed data center “based on available water for the area.”
Large-scale data centers would also have to:
- Submit water demand modeling for every use and phase of the facility
- Cap the initial closed-loop fill at 9.6 gallons per kilowatt
- Provide a “load ramp schedule” showing when and how much their electric demand will grow, and what grid upgrades it requires
- Go through a public hearing with notice, mailings and a posted sign, as with any conditional use permit
- Get a major amendment to their permit for any expansion or additional data center on the same property
If a large-scale facility goes over 10,000 gallons a day, the ordinance says the water provider “reserves the right to limit or shut off the domestic water supply.”
The state law behind it
The packet includes South Dakota’s new “Data Center Bill of Rights,” SDCL Chapter 49-50, passed in the 2026 session as Senate Bill 135. The state defines a data center as a facility with a peak demand of 10 megawatts or more.
Three parts matter here:
- Local control is protected. The state “may not preempt or otherwise limit” a city or county’s authority to limit, prohibit or regulate data centers. That’s the legal footing for Rapid City banning hyperscale facilities outright.
- Electric costs stay with the data center. Utilities must set separate service terms for data centers and require them to reimburse costs “fairly attributed” to them, including if a data center leaves or sharply cuts its load.
- Water gets a state check. Before operating, a data center must notify local water providers of its projected use. Each provider decides in writing whether that use is compatible with local supply, and the state Board of Water Management can set consumption limits “after allocation to residential and essential public services.” Operators file semi-annual water-use reports, which the board must make public.
Because the state law starts at 10 MW, the city’s micro tier — up to 10 MW — sits almost entirely below the state’s threshold.
The fine print
Some details in the draft are worth a second read before Thursday.
Micro data centers get no public hearing. A micro facility that meets the 500-foot distance needs only a building permit.
Neighbors get no notice and no hearing. Only one micro data center is allowed by right per property, but the ordinance doesn’t limit how many could sit on neighboring lots.
“Can,” “may” and “optional.” The water provider “can” restrict cooling-system fills. Water surcharges “may apply” to micro facilities.
The neighborhood meeting for large-scale permits is “optional,” and the city only provides the half-mile mailing list if the applicant chooses to hold one.
“Available water” isn’t defined. The city’s authority to deny or shrink a project based on “available water for the area” has no stated method or standard.
The tiers may not fit together cleanly. The large-scale definition uses “and/or” between the power and water limits, while the micro definition uses “and.”
One public comment argues a facility under 10 MW that uses more than 4,000 gallons a day may fit no tier at all — and since the ordinance removes the general “data center” permitted use, that facility could end up prohibited by omission.
The hyperscale water trigger doesn’t exclude the first fill. The micro and large-scale water limits exclude the initial fill.
The hyperscale definition doesn’t. At 9.6 gallons per kilowatt, an 11 MW facility could use more than 100,000 gallons filling its system on day one — enough, read literally, to make it a banned hyperscale facility.
Light Industrial zoning allows homes. The distance rules are measured from “a zoning district that allows residential uses.” Light Industrial zoning itself allows single-family homes as a conditional use. The ordinance doesn’t say whether industrial districts count.
Drafting errors. The Heavy Industrial section’s noise and generator rules cite § 17.22.030.A.29.f.(1), a section that doesn’t exist; the matching Heavy Industrial section is in Chapter 17.24.
Both the light and heavy industrial sections refer to an “interim sound study” the ordinance never establishes.
The ordinance’s opening also reads “NOW THEREORE.”
Private wells. The ordinance’s main water enforcement tool — limiting or shutting off supply — works when the city or a utility is the supplier.
Wells are permitted by the state, not the city. The draft doesn’t address a data center that drills its own
What the public said
The public comment file holds written comments from 16 individuals and groups, dated Sept. 17 through the morning of Nov. 2. Several reference the city’s Oct. 14 open house on the draft and a survey handed out there.
Most opposed data centers outright. About half the commenters asked the city to ban data centers, halt them or adopt a moratorium, most citing current watering restrictions, rising utility bills and drought.
One resident said she skipped the city’s survey because it offered only permitted and conditional use options, with no way to say no.
Another wrote that the open house was “a canned presentation that stifled public input.”
One resident wrote that he lives near where a data center is proposed and that neighbors weren’t told; he asked how it would affect a community well that already struggles to serve 13 lots.
Others asked for tighter rules. A resident who lives along Spring Creek and works in water management called the draft “a strong foundation” but asked the city to turn “can” into “will” on fill restrictions, tie data center fills and irrigation to the city’s existing Pactola drought stages, require a dedicated public water meter, set a citywide cap so several micro facilities can’t add up to one large one, extend the fill cap to micro facilities, and require a cleanup bond.
Another resident who researched ordinances elsewhere proposed lower noise limits (55 decibels daytime, 45 at night), testing at the nearest neighborhood rather than the property line, a 3,000-foot setback and air monitoring for clusters of generators.
A third, who visited a data center in Kearney, Nebraska, found it “noisier than I expected” and asked for a time limit on generator “emergencies.”
A South Dakota Mines lecturer proposed a required cost-benefit analysis for every project.
Rapid City’s Youth City Council recommended adopting the ordinance, with a lower large-scale ceiling of 30 MW, a cap on the total number of data centers and a 1,000-foot buffer in all cases.
Two pushed the other way. Helene Duhamel wrote that she liked the local control in the draft but asked the city to “keep the restrictions reasonable” so it can still attract a small or medium data center, warning that a developer could otherwise build in Meade County, outside the city’s zoning and tax base.
A resident with Navy nuclear power and data center backup-power experience asked the Commission not to recommend the ordinance as drafted. He supports much of it, but flagged the tier gap, the hyperscale fill trigger, the Light Industrial setback problem and the drafting errors above.
He also argued that the one-hour generator test limit conflicts with national fire code testing requirements, that the evaporative-cooling ban will push operators toward air cooling that uses more power and makes more noise, and that 50 MW-plus facilities should be a conditional use rather than banned.
Questions the packet doesn’t answer:
- If commissioners couldn’t reach consensus in September, what changed in the draft between Sept. 10 and now — and if nothing did, what’s expected to change Thursday?
- How will the city measure “available water” when deciding whether to deny or shrink a project?
- Does any of this apply to a data center that drills its own well?
- What stops several micro data centers on neighboring lots from adding up to a large one with no public hearing?
- Will staff fix the cross-reference errors and the tier gap before the ordinance goes to Council, or will Council vote on the draft as written?
- With the city on year-round watering restrictions since August, will data centers face the same drought rules residents do?
Planning to Attend
- The Rapid City Planning Commission meets at 7 a.m. Thursday, Nov. 5, in the Council Chambers at City Hall, 300 Sixth St.
Sourcing
City of Rapid City agenda item 26OA006 – Ordinance 6746 (rcgov.org, Planning Commission agenda items, posted for Nov. 5, 2026), including: Ordinance No. 6746 (full and simplified versions); Community Development memo from Jessica Olson, dated Sept. 4, 2026; “Data Center Regulations Update” handout; SDCL Chapter 49-50, Data Center Bill of Rights (SL 2026, ch 190); and 26OA006 public comment file (41 pages). The Sept. 10, 2026 continuance vote is from the city’s agenda item summary.
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