Amid some recent public outcry over an incoming $500 million data center build in Batavia, the city could take action to limit the center to 1,000 gallons of water per day, amended contract drafts show.

While data centers using evaporative cooling systems require significant amounts of water each day, the closed-loop system Miami-based energy and digital infrastructure company Hut 8 Corp. intends to use would require far less water.

Hut 8 representative Chris Vickery told committee members at the Aug. 26 meeting that they intend to bring in ionized water by truck to fill the cooling systems.

“We heard the concern, limited the water use and limited what the compute could be used for,” Vickery said. “The intent is to hear the concern and meet the request.”

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A recent city committee meeting reviewed an amended contract, not yet finalized, that would shore up utility plans before reviewing final construction details.

Hut 8 Corp. plans to build a 120,000-square-foot data center on the vacant industrial park lot at 1780 Hubbard Ave.

Developers said they expect the center to be operational by winter 2026. The data center is expected to create about 30 new jobs.

The next step is to amend the agreement to include the framework in which the city will provide the facility with water and wastewater utilities.

Residents and council members at previous meetings raised concerns over the amount of water the data center would consume.

Data center water use could be capped daily

Council members gave a positive recommendation to the amended agreement with Batavia DC Corp. during an Aug. 26 Committee of the Whole meeting.

Per the agreement, the city will provide potable water and wastewater services to the data center, limited to 1,000 gallons of water per day. The city will install meters to monitor the facility’s water intake and discharge to ensure it remains within that limit.

City Administrator Laura Newman said the average person uses about 82 gallons per day, according to the Environmental Protection Agency. Newman said the 1,000 gallons per day is equivalent to the amount of water a four-person family household with an irrigation system might use.

The facility’s operators will be required to notify the city at least one week prior to discharging its cooling system water into the city’s wastewater system.

The agreement also prohibits Hut 8 from engaging in blockchain-related activities, including bitcoin (digital money) mining, which require excessive energy and resource demands.

The agreement will remain in effect for as long as the data center operates.

The data center plans to use a closed-loop cooling system which would require an initial load of about 450,000 gallons of ionized water to be discharged and refilled every 2,000 days, or once every five and a half years, roughly, plans show.

Some council members, however, still have concerns.

Alderperson Abby Becky said she wanted language in the agreement to require a closed-loop cooling system, citing concerns over the possibility of the facility changing its cooling method in the future and depleting aquifers.

“My concerns are not as calmed as I was at the end of [the July 21] meeting. By not requiring it in this agreement, isn’t it possible then that they are transitioning to a higher water use?” Beck said. “From just a global or regional sustainable water usage perspective, even if it’s not tapping our system and coming out of our wells, I have a problem with that on a global scale.”

But Newman said that requirement would prohibit the data center from implementing future technological advancements that could reduce usage or even eliminate the need for water.

“Because the data center is hopefully something that is going to be there for decades and we can’t predict what future technology improvements will be made, to put a specific technology in there seemed to be limiting it in a way that may not be advantageous in the future,” Newman said. “This is a very insignificant amount of water that is used, compared to other industrial users.”

Newman said if the meters show that the data center is using more water than the 1,000-gallon limit, they would be in breach of contract and city officials would address that with Hut 8.

Alderperson Alan Wolff raised concerns over the logistics of shipping in a large quantity of deionized water.

“I can’t imagine what that’s going to cost, and feasibly being able to locate that many trucks to try and fill up 450,000 galloons,” Wolff said. “How do you see 450,000 gallons of water being trucked into that site?”

Vickery said Hut 8 would likely have an on-site water tank that could be filled over time and used to refill the system.

Alderperson Tim Lanci argued that the logistics of water use were not relevant to a council vote.

“I think this is a little nuts, we’re spending this much time on water here,” Lanci said. “It does nothing for them, to not be more efficient. They make more money when they are more efficient. They will be more environmentally friendly. That is where this space is going... The water is not the issue.”

Alderperson Tony Malay said he believes concerns over the center’s water use were unfounded. He said he supported the agreement as drafted.

“Bringing in 450,000 gallons every 2,000 days is five and a half years,” Malay said. “We’re talking 50 trucks every five years. That’s 10 trucks a year, on average. I’m not concerned about that... The use of 1,000 gallons – that’s a large household. That’s nothing compared to what their neighbors are currently using out there.”

Alderman Matthew Anderson added that 450,000 gallons is less than an Olympic-sized swimming pool, and that they use more water to fill the quarry every year.

Utility work ahead

Developers took the first step in July to ensure the data center could tap in to the city’s energy utilities.

City Council members approved an agreement with Batavia DC Corp., on behalf of Hut 8, on July 21. The city agreed in the contract to provide power to the facility through a subaccount for the center with its regional transmission grid operator, PJM.

Initially, the facility will operate at a load of about 20 megawatts. Before the data center reaches its full 50 MW capacity, the city will need to increase its energy capacity with ComEd and add a fourth transformer to its substation.

The city will be responsible for constructing off-site electrical improvements, estimated to cost $18 million. The sum will be paid for by the data center upfront and repaid by the city over 7 years using revenue from the project, according to the plan.

While the data center operates at a 20 MW capacity, the city will receive about $2.3 million in new annual utility revenue and $375,000 in annual franchise fees, in addition to the new property taxes to the school and park districts.

Once the data center reaches its full 50-megawatt capacity, the city expects it to generate about $5.7 million in annual utility revenue and $800,000 in franchise fees.

Artificial intelligence use

Alderperson Alice Lohman said she wanted language in the agreement that would prohibit the use of artificial intelligence. The rise of AI in industries across the country have spurred significant data center growth.

“What was discussed on that July 21 meeting is not what’s in this agreement, so I’m uncomfortable with the language that’s on here,” Lohman said. “I want to see AI in here as well, that it will not be used for that.”

Alderperson James Fahrenbach was among multiple council members who argued that AI is too broad a term to be restricted from their systems entirely.

“AI is a very large term. It’s a myriad of technologies,” Fahrenbach said. “To put that in here would potentially make the data center competitively not viable.”

Committee members made the recommendation to approve the amendment in a 10-2 split vote. Alderpersons Abby Beck and Alice Lohman voted no. A final Council vote is required.

The agreement will go before the Batavia City Council Sept. 2 for possible final approval, though more steps are needed before the data center can go online. If approved, the development will move to a design review phase for construction plans.