Powering Progress or Fueling Controversy? Eagle Mountain’s Energy Code Changes Spark Debate.

The change in code and amendment to the QTS Deal is not just about supporting datacenters and the tech industry that is booming in Eagle Mountain. As stated by Melissa Clark a resident, and member of the City Council, “This will generate $12 million a year in MET (municipal energy tax), which goes directly to the city to be used for the city’s general fund and operating expenses.” The goal is also to support the growth of the growing city with needed infastructure and resident resources.

Types of Energy Generation Being Discussed.

Several types of energy sources that are being considered or implemented in Eagle Mountain City, including:

• Natural Gas Power Plants: These facilities are designed to convert natural gas into electricity and include all necessary infrastructure such as cooling systems, emissions controls, and pipelines for natural gas delivery and storage. A specific natural gas generation project is intended to replace multiple diesel generators for backup power.
• Battery Energy Storage Systems (BESS): These systems store energy for later use and can include various storage technologies, along with facilities such as transformers and substations.
• Solar Energy Projects: These projects generate electricity by converting sunlight through various technologies. They may include battery storage, substations, and power lines.
• Small Modular Reactors (SMRs): These are compact nuclear fission reactors that can generate up to 300 megawatts of power. The city is working to establish standards for SMRs to meet safety and regulatory requirements.

In addition to these, the city is also addressing the necessary infrastructure for these energy sources including:

• Electrical Substations: Facilities that regulate, switch, or transform electricity.
• Power Lines: Transmission and distribution lines for electric power, including supporting structures and equipment.

These energy sources are being considered in the context of the city’s growing energy demands and are being integrated into the city’s zoning codes to allow their development in specified areas, such as the AG Zone and the RTI overlay zone.

What is the QTS Development Deal?

The QTS Development Agreement is a key part of Eagle Mountain City’s strategy to facilitate data center development, and has been amended to address power needs. Here’s a breakdown of the agreement and its amendments:

• Original Agreement: On July 18, 2023, Eagle Mountain City entered into a Development Agreement with QTS regarding a data center project located adjacent to the Facebook data center. The agreement anticipated QTS’s use of the property to install equipment for the transformation, transmission, distribution, and management of electricity, including substations. It also contemplated that QTS would engage in accessory uses reasonably related to data centers as part of the project.
• Need for Amendment: QTS had initially received assurances from Rocky Mountain Power that there would be sufficient power to service the first phase of the project. However, this was no longer the case, necessitating an amendment to the agreement.
• First Amendment: The First Amendment to the QTS Development Agreement, made on February 4, 2025, allows for on-site power generation as an accessory use to enable the project to proceed. This amendment was deemed consistent with other approved development agreements for data center projects. The amendment also specifies accessory uses that are allowed, including:
  • Natural gas turbines and fuel cell facilities for electric and utility generation, distribution, and transmission
  • Power substation facilities
  • General storage facilities
  • Water and sewer facilities
  • Communication, broadband, fiber optic, and other private utilities
  • Renewable energy generation and transmission, except wind (whether located on or off the Property)
  • All public utilities
  • Other accessory uses as allowed in the Applicable Rules
• Public Interest: The City Council of Eagle Mountain City found it to be in the public interest to approve the First Amendment to the QTS Eagle Mountain Development Agreement. They also found that all required notices and hearings were completed as required by law to consider and approve the amendment.
• Zoning Considerations: The QTS project is located in the RTI (Regional Technology Innovation) overlay zone, and the approval of on-site power generation was noted by at least one resident to be against zoning laws. However, the city has been working to revise zoning codes, including the definition of “Communication Facilities and Towers,” and to permit such uses in the industrial zone.
• Council Review: The City Council has discussed the QTS project, and has grilled QTS representatives with questions. They have also toured power plants to better understand the project’s potential impacts on the city and its residents.
• Additional Considerations: There is a concern from some citizens that the QTS project will lead to increased energy prices and nuclear waste storage in the area. However, others support the economic development and tax generation from a project like this, noting that it could alleviate financial burdens on families in the community. The city has also been taking steps to ensure that infrastructure can support commercial development, and that water is reserved for future commercial uses.

In summary, the QTS Development Agreement and its amendment reflect Eagle Mountain City’s effort to support data center development while navigating challenges related to power availability. The City is also trying to build a substantial tax base to help meet the infrastructure and transportations needs of the growing community. The amendment enables QTS to generate its own power on-site, which is considered an accessory use to their data center, by adding more specific allowances for various types of power generation equipment and facilities.

Who is QTS?

QTS Data Centers (QTS) or in the agreement QTS Eagle Mountain I, LLC. QTS is involved in a data center project in Eagle Mountain City and is seeking to amend its development agreement with the city to allow for on-site power generation as an accessory use to their data center.

Here’s what can be gleaned about QTS from the sources:

• Data Center Development: QTS is developing a data center project adjacent to the Facebook data center property in Eagle Mountain City.
• On-Site Power Generation: QTS is seeking to amend its development agreement to permit on-site power generation, initially with natural gas turbines and fuel cell batteries. The sources specify that the QTS project will be subject to the municipal energy tax (MET), which is estimated to generate $12 million a year for the city.
• Relationship with Blackstone: QTS is owned by Blackstone, which, according to one source, is a former owner of Blackrock. However, this is not confirmed by other sources, which focus on QTS’s operations in Eagle Mountain.
• Transparency and Cooperation: QTS is portrayed as being transparent and cooperative with the city, voluntarily seeking to update its development agreement to provide additional information to the community. They have also met with city officials to discuss the project.
• Leasing by Energy Units: QTS leases its data centers by energy units, which shows how important energy is to their business model.
• Project Details: The QTS project involves the installation of equipment for the transformation, transmission, distribution, and management of electricity, including substations. The amendment also allows for other accessory uses such as general storage, water and sewer facilities, and communication utilities.
• Legal Agreements: QTS has a Development Agreement with Eagle Mountain City, which was originally entered into on July 18, 2023, and is now being amended to accommodate on-site power generation.
• Chief Operating Officer: David Robey is identified as the Chief Operating Officer of QTS Eagle Mountain I, LLC.

In summary, QTS is a data center company that is developing a significant project in Eagle Mountain City, which includes on-site power generation to support its operations. QTS is seeking to be a transparent partner with the city as it seeks to meet its energy needs.

The QTS amendment is only part of the issue, the code change is also a significant part of the changes. The code changes was not just because QTS was expanding beyond the local power grids ability to supply electricity, but to also allow more envormentally stable sources of electricity like solar and wind.

What is the controversy?

Joy Hiatt Rasmussen is a vocal opponent of the QTS development agreement, and her main arguments center around concerns about the negative impacts on the community and environment:

• Health and Environmental Concerns: She argues that the QTS project, particularly with its plans for power generation, will negatively impact the health of residents. She believes it will lead to:
  • Increased cancer rates due to radiation exposure from nuclear reactors.
  • Contamination of soil and water from nuclear waste storage.
  • Unsafe drinking water.
  • Contaminated animal populations, making hunting unsafe.
• Land and Resource Concerns: Rasmussen expresses concern that the project will negatively affect:
  • Farmland, implying that it will be lost or damaged.
  • The local water supply, suggesting that the project will strain it or contaminate it.
  • Property values.
• Zoning and Legal Issues: She states that the city is using “questionable legal theories” to justify the project. Specifically, she claims that the project:
  • Violates zoning laws by allowing energy generation in the RTI overlay zone.
  • Is being pushed through due to the influence of lobbyists and the city’s desire for money.
• Economic Concerns: While the city anticipates economic benefits, Rasmussen suggests that the project will lead to:
  • Skyrocketing energy prices.
  • Taxpayer-funded nuclear energy with no benefit to the community.
  • An increase in taxes.
  • Tax breaks for tech companies that negate any revenue.
• Project Purpose and Impact: She claims that:
  • The power being generated is not for the local community but for data centers and AI.
  • The project is not an accessory use, but essential for data center business models.
• Political Influence and Lack of Transparency: She is concerned about:
  • The close relationship between city officials and lobbyists, whom she suggests are influencing decisions.
  • A lack of transparency in the city’s dealings with QTS.
  • The influence of the state legislature overriding local zoning laws via bills like HB 249.

City Employees and Elected Officials Respond

In response to Joy Hiatt Rasmussen’s concerns about the QTS development agreement, city officials and council members have offered statements and clarifications, often directly addressing her specific points. Here’s a breakdown of their responses, with quotes directly from the sources:

• On-site Power Generation as a Legal Accessory Use:
  • City Attorney: The city attorney, who has been in public service for two decades, explained that power generation is permitted in this zone, and others, because it’s considered an accessory use of their property. He gave the example that individual homeowners have rights for accessory use that aren’t expressly stated allowed or prohibited in residential zones. For example, our code doesn’t say you can or cannot host a pool party bbq in your back yard, but a homeowner is perfectly within their rights to do so. The law assumes many accessory uses, and allows for them in land use zones.
  • This directly counters Rasmussen’s claim that the city is using “questionable legal theories” and that allowing power generation goes against zoning laws.
  • Melissa Clark: “QTS and any other business has the legal right to create power on site and also the legal right to generate back up power on site. (Without additional approval from the City Council.)”. This statement further supports the legality of the project and clarifies that QTS sought city approval for transparency, not because it was legally required.
• Economic Benefits and Tax Revenue:
  • Melissa Clark: Clark states, “This power generation site will be subject to MET, municipal energy tax, of which QTS does not get a tax break from. This will generate $12 million a year in MET, which goes directly to the city to be used for the city’s general fund and operating expenses.”. She further adds, “The MET for this project isn’t just money for a few decades, it’s our police force, our water infrastructure, and much needed road and safety improvements”.
  • This directly addresses Rasmussen’s concerns that the city is prioritizing money over community well-being and her claims that tax breaks would negate revenue. It emphasizes that the project’s revenue is crucial for city services.
• Transparency and Community Engagement:
  • Melissa Clark: “QTS chose to come to the city for full transparency and to provide additional information to the community and request an update to their Development Agreement with the city. That shows they are committed to being a good neighbor and desire to be fully transparent”.
  • This contradicts Rasmussen’s claim of a lack of transparency in the city’s dealings with QTS and implies a commitment to being a good neighbor.
  • Melissa Clark: “The elected officials have been speaking with QTS representatives over the last week. The Council has been grilling QTS with all of the questions you and other residents have been asking”. This shows that council members are actively seeking answers to community concerns and not simply rubber-stamping the project.
• Addressing Concerns About Health, Farmland, Water Supply, and Property Values:
  • While no direct quotes specifically negate these concerns from the sources, Clark states that the council is “doing the homework you elected us to do,” implying that they are carefully considering all aspects of the project’s impact.
  • Melissa Clark: “When falsehoods are spread, it is counterproductive to the process of making good decisions. Instead of addressing real facts, it devolves the conversation.” This indicates a need for fact based community discussion, but does not directly address Rasmussen’s concerns.
• Response to Claims of Political Influence:
  • Melissa Clark: In response to Rasmussen’s concern about a lobbyist, Clark clarifies, “John Curtis’s new outreach coordinator, not lobbyist, for this area came last night to introduce herself as a resource to our community in federal matters during public comment…We want our elected officials to know, to collaborate with other elected officials. That’s not chummy, that’s just good governance”.
  • This explanation aims to dispel concerns about undue influence from lobbyists.
• Addressing the makeup of the audience at the City Council meeting:
  • Melissa Clark: “The city doesn’t recruit construction workers or anyone else to speak in our meetings. The people who spoke last night are long time residents of Eagle Mountain…Those individuals that spoke support the economic development and tax generation from a project like this. Many of them that came spoke about the burden of costs like school fees and other costs associated with being a family and how a project like this helps…But they also may work on site, and raise their family here, so the safety and security of this project is vital to them even more than us”. This refutes the claim that the meeting was packed with people recruited by QTS and highlights that the residents who spoke had vested interests in the project.

In summary, while Rasmussen expresses significant concerns about the QTS project, city officials and council members like Melissa Clark have presented counter-arguments that emphasize the project’s legality, economic benefits, and commitment to transparency. They have also disputed claims of political influence and a lack of community engagement, aiming to reassure residents that their interests are being considered.

Conclusion

The key benefit of amending the QTS Eagle Mountain Development Agreement is to allow for on-site power generation, which is essential for the QTS project to proceed. The original agreement assumed sufficient power would be provided by Rocky Mountain Power, but that is no longer the case. The amendment allows QTS to generate its own power, ensuring the viability of the data center project.

The amendment also benefits the city by generating significant tax revenue. The on-site power generation will be subject to the Municipal Energy Tax (MET), which is projected to bring in approximately $12 million annually. This revenue goes directly to the city’s general fund and can be used for operating expenses. To put this into context, the city currently spends about $7.5 million per year for all police services, so the MET revenue from QTS would more than cover that. The city can also use MET funds for water infrastructure, road improvements, and other public services.

Additionally, amending the agreement ensures consistency with other approved data center projects. Allowing on-site power generation as an accessory use for data centers is becoming a standard practice in the city. The amendment allows for other accessory uses such as general storage, water and sewer facilities, and communication utilities. By aligning with similar agreements, the city creates a consistent regulatory environment, which can help attract future data center projects and other businesses.

Bibliography

• “Annual Comprehensive Financial Report.” Eagle Mountain City, June 30, 2024.
• Eagle Mountain City Council. “Agenda.” January 8, 2025.
• Eagle Mountain City Council. “Agenda Packet – Public.” January 2, 2025.
• Eagle Mountain City Council. “Agenda Packet – Public.” January 30, 2025.
• Eagle Mountain City Council. “Agenda Packet – Public.” January 31, 2025.
• Eagle Mountain City Council. “Agenda.” January 9, 2025.
• Eagle Mountain City Council. “Packet.” January 28, 2025.
• Eagle Mountain City Council. “Packet.” January 14, 2025.
• Eagle Mountain Planning Commission. “Approved Minutes.” January 14, 2025.
• Clark, Melissa. Facebook post in “Eagle Mountain City Citizens” group, January, 2025.
• QTS Eagle Mountain I, LLC, and Eagle Mountain City. “Master Development Agreement.” July 18, 2023.
• Rasmussen, Joy Haitt. Facebook post in “Eagle Mountain City Citizens” group, January, 2025.

Photo by Murat Onder on Unsplash