Sitka Planning Commission takes testimony on requiring permits for data centers

The Sitka Planning Commission takes public testimony Wednesday on a city proposal that would put data centers in Sitka's zoning code for the first time, requiring a permit to build one in five of its districts.

Right now the code doesn't define a data center or say where one can go, according to a staff memo. It has rules for tanneries, log storage and boat building, but none for data centers.

The draft ordinance would make them a conditional use in the Public Lands, Waterfront, Industrial and General Island districts and the Gary Paxton Special District, which includes the industrial park at Sitka's old pulp mill site. A conditional use needs a permit, which the commission can approve or deny. A server room used for locally produced data, such as a business's own, wouldn't count.

The memo says the change "does not propose prohibiting data centers," and staff call the five districts "a starting point for discussion only." Sitka's Sustainability Commission voted unanimously Oct. 5 to recommend that data centers not be permitted outright in any district. The Planning Commission's recommendation goes to the Assembly.

Sustainability Coordinator Bri Gabel and Planning and Community Development Director Amy Ainslie wrote: "As an islanded electric grid supplied entirely by hydroelectric power and developable land at a premium, the possibility of a small footprint, large electric consumption data center being proposed in Sitka is not entirely unlikely."

A 1-megawatt high-density data center can fit in as little as 300 square feet, the memo says, and 1 megawatt can support 100 to 300 high-demand homes. The memo also notes a 150-kilowatt data center "the size of a large refrigerator" installed in 2024 in the powerhouse of a Cordova hydro plant.

The memo lists the impacts data centers can have: heavy energy use, high water use for cooling, and light and noise.

Sitka's two city-owned dams, Blue Lake and Green Lake, made 99.95% of its power in 2025, with diesel generators as backup, according to the city's 2025 electric utility report. They generated 120 gigawatt-hours, about 69% of what the utility estimates they could have produced that year. The town set a record peak demand of just over 26 megawatts on Dec. 23, 2025.

How much the dams can produce depends on rain. A 2023 Pacific Northwest National Laboratory study for the city found their potential output over the previous decade ranged from 127 to 190 gigawatt-hours, depending on precipitation. It found Sitka's resources sufficient for current needs but with limitations for the growth it projected: demand of 147 gigawatt-hours within five to 10 years, and 206 with high electrification.

Other Alaska communities are taking up data centers this fall. The Houston City Council voted Oct. 8 to stop data center permits for two years. Petersburg's Borough Assembly voted Oct. 5 to have a nine-month moratorium drafted for some data centers. Fairbanks North Star Borough Mayor Grier Hopkins has proposed a pause on large data center permits through 2027, and the Borough Assembly is scheduled Thursday to send it to the borough's planning commission. The Sitka memo also mentions a recently denied facility in Wrangell.

Some utilities see data centers as customers. In May, Petersburg's then-utility director, Carl Hagerman, told the Borough Assembly that a proposed cryptocurrency data center would help stabilize electric rates. Cordova's electric cooperative wants one to use hydropower it can't sell.