State fines companies for ‘pop-up’ power plants for data center

Two companies can continue building a power plant and nearby data center in Newton County — with stricter emissions limits — after Georgia environmental regulators fined them a combined $42,500 for starting construction without necessary permits.

VoltaGrid and Serverfarm have agreed to pay $11,500 and $31,000 for building dozens of gas engines at the site in Covington, roughly 40 miles east of Atlanta. The Georgia Environmental Protection Division issued a stop work order and violation notice after visiting the construction site and finding the companies assembling gas-powered generators.

The EPD’s notices of violation also came a day after a story by The Atlanta Journal-Constitution detailed how the companies had not received required permits before starting construction on dozens of gas engines.

The EPD has now issued two separate consent orders, published Sept. 30.

Georgia is now the No. 1 state for data center construction, according to data from the commercial real estate research firm CBRE. Critics of data centers are worried about the large amount of power these computer-filled warehouses need to operate and what that means for the air and water quality — as well as their power bills.

But data center operators want to get the warehouses built — and electrified — as soon as possible, something that is becoming more challenging as major power companies first must build out their grids to meet those demands.

For VoltaGrid, a Houston-based company that operates the power plant, and Serverfarm, a California-based company that builds data centers, the answer was to build 33 reciprocating internal combustion engines at the site. The companies applied for air permits last year but later told regulators they thought they could assemble the generators as long as they weren’t connected to fuel sources or power systems.

Officials from VoltaGrid and Serverfarm did not respond to requests for comment by publication time.

Maurice Carter, president of Sustainable Newton, said he would love to see a larger financial penalty but considers the revised permit to be a win. The EPD made changes to the companies’ permit after Sustainable Newton raised issues with the companies’ filing in December and with the draft permit issued in March.

The new permit requires VoltaGrid and Serverfarm to operate the power plant and data center as a single emissions source instead of two, small sources. This means the power generation must operate under stricter emissions guidelines under the EPD.

VoltaGrid also must not run more than 30 of the 33 generators at one time, the permit said. “We think this is a stronger, more effective permit,” Carter said in an interview with The Atlanta Journal-Constitution.

He said he’s also hoping the EPD’s actions set a precedent for the state.

“That’s way more impactful,” he said.

“We’re just grateful that Georgia still has a process that lets us be informed and comment and that regulators took our comments seriously and that they sent someone out there to tell them to stop.”

The U.S. Environmental Protection Agency is considering rolling back the requirement for states to let the public comment on proposed permits. Carter is asking the state Legislature to step up and ensure environmental regulators continue that process.

“If (the EPA) hadn’t (allowed for public comment), this permit would have been issued in March, and more generators would have been running.”

This isn’t the only issue VoltaGrid is facing in Georgia. The company wants to run these generators around the clock with the electricity serving only the data center instead of being distributed across the entire power grid, which is typically what power plants do.

The Georgia Public Service Commission is now weighing whether the company’s actions violate two state laws that dictate who is allowed to generate and distribute electricity. The PSC’s inquiry comes after Commissioner Peter Hubbard, a Democrat who is on the ballot in November, called for an investigation, citing the AJC’s reporting.