Years before the Stratos Project exposed a hole in Box Elder County’s zoning, data center developers were knocking on the door of rural Nephi — population 7,300.
Right off Interstate 15, the Juab County seat is almost smack-dab in the middle of Utah. And while Box Elder and Iron counties are scrambling to consider new guidelines for where and how data centers operate, Nephi has been a step ahead. In late 2025, it adopted new zoning for data centers, setting rules for water use and giving the city council control over where they can go.
Nephi is attractive because it owns its own power company and natural gas system, said Seth Atkinson, the city administrator. Multiple developers are interested.
Across the United States, most new data centers are planned for rural areas.
Nephi isn’t opposed to data centers. Rather, Atkinson sees some advantages. The city could harness property taxes, its power company would have new, electricity-hungry customers and a big project might speed up the extension of a water pipeline from Strawberry Reservoir to Nephi.
But it’s not all sunshine and tax revenue. And Nephi has a plan.
To get ahead of Utahns’ concerns about water use, the city’s newly created Industrial 4 Zone requires data centers to use air-cooled or closed-loop cooling systems, which use less water than evaporative cooling. It also sets guidelines for light pollution and requires any polluting parts of a project to get a permit from the Utah Division of Air Quality before city approval.
Most importantly, the zone allows Nephi to limit where large data centers can go. There’s not much space left within city boundaries, Atkinson said, so the city would annex land from the county before it could be used for a data center. They’re currently in “fairly serious talks” with a site developer looking near the Nephi airport.
“It gives the council a lot of discretion about where this will be,” Atkinson said.
Modular data centers, which use premade buildings assembled onsite, are still allowed in industrial areas. They also have to go easy on water and electricity use.
Like any business, Atkinson said, Nephi has a product — electricity — it wants to sell. He’s not worried about data centers driving up utility costs for locals.
“One of the benefits of a community-owned power system is our council doesn't have any desire to raise bills, and so they, you know, we own the power company, we’re the ones in control of that.”
If a developer requires upgrades to the grid, the costs would be on them, he said.
In Juab County and beyond, county commissioners have opted for temporary moratoriums to give themselves time to update land use laws. Counties have been thinking about data centers and energy use for two or three years, said Brandy Grace, CEO of the Utah Association of Counties.
When the Box Elder County Commission needed to vote on a land use agreement for the Stratos Project to proceed, it ran into a problem: the land was unzoned, so commissioners had little control over it.
Some developers have been willing to work within a county’s parameters, Grace said, but those rules haven’t been set up yet.
So local leaders are eager to put guidelines in place. On a recent call, elected officials from across the state asked for sample moratoriums and land use regulations, Grace said.
“Instead of every county trying to figure that out on their own, we can facilitate conversations and help them consider what they should be looking at and navigating then what makes most sense for their community,” she said.
Zoning is the main way local governments can regulate data centers, and it’s not just Nephi adding data centers to its laws. The Washington County Land Use Authority recently gave the thumbs-up to zoning amendments that would ban data centers larger than 50 megawatts. It would also require them to use low-water cooling systems, use noise reduction and publish water and electricity use in yearly reports. The change now heads to the county commission for consideration.
The permitting process poses another challenge to local leaders. Developers typically request permission to build before applying for air and water quality permits from the Utah Department of Environmental Quality. That means projects can come up for public comment before developers have solidified the details of how much water or electricity they’ll use.
A developer can promise that the impacts will be minimal and more information will come later, but “the public's not going to love that,” Grace said.
While counties can learn from each other, the Utah Association of Counties wants elected officials to have even more information. It’s planning an event with subject matter experts to help county leaders sort through data center facts and misinformation.
They’re hearing very different stories, Grace said. On one side, developers say advanced technology allows data centers to use little water.
“But then on the other side of it, you've got the public saying, ‘We're in a drought, like Utah's the worst state to build data centers, and we hear that they're noisy, and it's going to pollute our air.’ And so you know, well, what is it?”
Macy Lipkin is a Report for America corps member who reports for KUER in northern Utah.
