The Petersburg Borough Assembly on Nov. 2 passed on first reading an ordinance that would bar borough permits through Sept. 30, 2027, for data centers that need more power than the local grid can supply, rely on generators for everyday operation, or use cooling systems that are not fully closed-loop.
Ordinance 2026-24 passed 5-1, with Member Jeff Meucci voting no after his amendment to apply the moratorium to all data centers failed on a 3-3 tie. Member Scott Newman was excused.
The vote followed testimony from a resident who urged a stricter pause with no exceptions, and from Tara Favilla, president of Mazzella Alaska, who told the Assembly the ordinance was written in response to her company’s pending permit application. The measure needs two more readings, including a public hearing, before it takes effect.
The ordinance describes itself as a “temporary, targeted moratorium.” It would not stop all data center permits. Instead, the borough could not issue a building, electrical, plumbing or land use permit for a new or expanded data center if any of three conditions apply:
• Its normal operating electrical load cannot be fully supplied by Petersburg Municipal Power & Light’s current grid capacity, or would violate a limit set by an outside agency, including the Southeast Alaska Power Agency.
• It relies on diesel, natural gas or other generators for normal operating power, or to bridge a gap between grid capacity and its load.
• Any part of its cooling system is not fully self-contained and closed-loop. Evaporative cooling towers, once-through cooling and routine discharge of cooling water are not allowed; dry air heat rejection is.
Backup generators would still be allowed during an actual power outage or a curtailment directed by PMPL. The ordinance says a voluntary cut in grid purchases or a price-based choice to run generators does not count as an outage.
Before any data center permit is issued, PMPL would have to determine in writing how much load the grid can currently serve. Capacity that depends on future upgrades would not count. An Alaska-licensed engineer would have to certify the cooling design, and borough officials would have to make written findings on each condition. If the information is insufficient, the permit would be denied.
The moratorium would apply to applications pending on the date of adoption, but would not revoke a valid permit issued before then. Ordinary server rooms that support another business on the same property are excluded.
Vice Mayor Jeigh Stanton Gregor, who brought the ordinance forward, said he worked on it with borough staff and Utility Director Steve Harbour, who drafted the language.
“I don’t believe it is a perfect ordinance, but I think it addresses the bigger concerns the community has,” Stanton Gregor said. He said its main target is a large, multi-acre data center that would run off the grid on diesel or other generators.
Member Donna Marsh also called the ordinance imperfect but said it “lays some groundwork” and is “heading in the right direction.”
Meucci moved to amend the moratorium so it would apply to all data center development, regardless of cooling type or grid connection.
“I am not going to sell my soul for a million or $2 million coming out of electrical rates,” Meucci said. He compared the issue to the borough’s cell tower debate and said that once a data center is permitted, “there’s nothing we can do.”
Member James Valentine supported the amendment. “This is not a stop forever,” he said. “This is a pause to get information.” He said a full winter of power data would help the Assembly make a better-informed decision.
Stanton Gregor opposed the amendment, saying it contradicted the intent of his ordinance and that he would not support a blanket moratorium. Mayor Bob Lynn also voted no, saying he needed more information before going further. Member Bob Martin joined them, and the amendment failed 3-3.
Harbour urged the Assembly to pass some version either way, because the ordinance bars data centers from running on generators. He said he had read news accounts of communities where data centers run generators around the clock to make up for limited utility power.
“I don’t want to be tarred and feathered and ran out of town because I supported a 2-megawatt data center … and somebody decides down the road to run generators 24/7,” Harbour said.
Martin asked whether the moratorium would reach areas outside town. Harbour said it applies wherever the borough has permitting authority, which currently does not extend beyond Service Area 1, but would expand as the borough’s Title 19 zoning code is updated.
Before the final vote, Meucci said he would vote no because the ordinance was not broad enough and leaves “the door open” for larger data centers on the grid.
Resident, developer weigh in
Resident Becky Knight told the Assembly the ordinance reads less like a moratorium than “a de facto conditional use permit,” because data centers that meet its three conditions could still be built and operating before permanent rules are in place.
“It’s kind of a catch-22,” Knight said. She said the borough would “once again have turned over the regulatory reins of power to the tech bros.”
Knight asked the Assembly to make the moratorium a full pause with no exceptions, extend it to at least one year and hold a town hall. She also asked that the ordinance cite quality of life and privacy as interests to protect.
Tara Favilla, president and chief operating officer of Mazzella Alaska LLC, testified by Zoom that her company’s project is the only one the moratorium addresses. She described it as a small data center on existing private industrial property, using a closed-loop cooling system filled with water the company would bring in.
“This is not a hyperscale campus consuming municipal water for cooling,” Favilla said.
Favilla said the company has asked SEAPA to buy surplus hydroelectric power that is currently spilling over the dam, and that its load could be cut back when residents need power. She cited a borough projection of about $2.1 million in annual utility revenue at 2 megawatts, which she said the cannery had used for years. She said the company is paying for engineering on grid improvements and has offered to discuss covering diesel costs attributable to its load during constrained periods.
“We want to help carry the system, not ask the system to carry us,” she said.
Favilla said Mazzella Alaska submitted its building permit package Aug. 10 and that the borough used those project details “to create the moratorium against it.”
Mayor Lynn later said his understanding of Mazzella’s presentation to SEAPA was that the company proposed to buy all excess power, which he said was a separate question from a 2-megawatt project. Harbour agreed and said he believed the SEAPA board “was not for that one,” but said he could not discuss what happened in executive session.
Regional power concerns
Mayor Lynn said he and Harbour spent considerable time last week with Wrangell and Ketchikan, the other communities served by SEAPA, and that all three generally agree on some kind of moratorium on the use of power. He said that SEAPA plans to meet again around Nov. 14.
Lynn said new generation is coming online, but power demand is growing about 5% a year in each community. He pointed to Ketchikan’s plans for cruise ship dock electrification, including at Ward Cove, a busy shipyard there, and a shipyard facility Wrangell hopes to build. He said some have suggested allocating power among the communities, though “I’m not sure I’m there.”
Harbour said the communities do not want to run short of power again in the next 10 to 15 years and that early talks about expanding generation are underway.
The ordinance returns for a second reading and public hearing at the Nov. 16 assembly meeting.
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