A proposed power plant that could serve data centers in Fernley is causing upheaval in the city's planning commission, resulting in legal demands, ethics inquiries and multiple resignations.
Cody Wagner, who served on the Fernley Planning Commission for nearly a decade, resigned Oct. 14 after getting pressure from attorneys representing Mark IV Capital, a development company seeking to build a natural gas plant at its Victory Logistics District. Commissioners Angela Lewis and Jenni McCullar also resigned.
Mark IV Capital is seeking city approval to construct a modular natural gas plant and battery energy storage systems capable of producing up to 324 megawatts (MW) of power for businesses within the logistics district, according to city documents. Mark IV has billed the district as "a premier destination for data center development."
Wagner, who originally supported the district's construction, publicly questioned the power plant, data centers and other issues in meetings and on social media posts over the past year.
"Many other communities across the county have rallied against these massive data centers and their consumption of resources that Fernley might be looking at," he wrote in a Jan. 13 Facebook post. "Let's make sure our community gets a clear understanding of this plan and how it benefits our community before we blindly approve anything that would negatively impact our future."
In July, the City of Fernley received the first of two letters from attorneys representing Mark IV Capital "to formally demand that Planning Commissioner Cody Wagner recuse himself from any future quasi-judicial proceeding involving the proposed power-generation facility, any related conditional use permit, or other project-specific applications by Mark IV Capital or its affiliates within the Victory Logistics District."
The letter alleges that Wagner "has engaged in a sustained and public course of conduct demonstrating prejudgment of the merits of the power-generation facility and a closed mind with respect to these matters" and that he "functionally advocated against the project."
A second letter was sent to Fernley's City Council stating that if it sided with Wagner, "it would also do silent, durable damage to Fernley's standing with the market."
That second letter, Wagner told The Nevada Independent in an interview, was the tipping point that led to his resignation.
"It was frustration about the process here and how it all went down," he said. He said he felt as though lawyers targeted him "for no good reason."
McCullar said she resigned out of a sense of solidarity with Wagner. "The correct procedure was definitely bypassed, which was definitely disheartening. But then to drag Cody's name through the mud like they did and challenge the ethics of Cody Wagner — I just wanted no part of a city government that allowed that to happen," McCullar said.
Representatives of Mark IV reiterated that Wagner's social media comments were unfair and inappropriate.
"The planning commission had individuals that had positions that were put out in the public space that did not provide the applicant with a fair and unbiased review," Rick Nelson, senior vice president for Mark IV Capital, told The Nevada Independent.
He said that to not slow down economic development in the area, Mark IV decided to build its own power plant. He added that Fernley is a small city facing growing pains and the conversation around the power plant highlighted that.
"They're asking the hard questions," he said. "We are requesting the city make decisions on things it's never made decisions on before."
Power plants and data centers 'were never part of the plan'
The question of whether Wagner's comments violated any state ethics laws was sent to the Nevada Commission on Ethics.
Nevada's ethics law mandates that public officials and employees must avoid conflicts of interest or situations that create appearances of impropriety and conflicts of interest. The law limits the commission's jurisdiction to issues involving a public officer's pecuniary or personal interests and private commitments.
"A political position on a matter is not a pecuniary interest or a private commitment" under Nevada Revised Statutes, according to the commission.
The commission found that Wagner is not prohibited from voting on matters regarding Mark IV Capital or its project.
"The Ethics Law does not apply to prevent public officers from voting on matters solely on the basis that the public officer expressed an opinion or position regarding the matter during their tenure in office and that nothing in the Ethics Law requires that he provide any disclosure or abstain on matters involving or benefiting the applicant or its proposed projects," it wrote in its opinion that Wagner shared online.
As it awaited a decision from the commission, as well as clarification on some questions surrounding the power plant, the planning commission had temporarily tabled the permitting issue — a decision that quickly became moot. The Fernley City Council, at the request of Councilman Ryan Hanan, advanced the issue without the planning commission's input, approving the conditional use permit Oct. 7, a week before the planning commission was set to revisit the matter.
"A conditional use permit is supposed to be decided by the planning commission. The city council can always pull it up for review after a decision," McCullar said. "They could have gone through the proper procedure — chances are we would have approved it."
The day of the council's vote, Mark IV sent the second letter to the mayor, city attorney and city council members stating that, "A vote to affirm commissioner Wagner tells the next user something precise. It says a lawful application can be stopped when a commissioner has already chosen a side, and that this Council will not take the matter up even when its own code puts the item here. That is read, correctly, as process risk. Process risk is priced. It lengthens diligence, raises the cost of capital, and moves the next substation, the next user, and the next expansion to a jurisdiction that will put an item on the agenda and vote [on] it."
'Much bigger than a power plant'
When Mark IV Capital signed the deal for the logistics district in 2019, the 4,300-acre transaction was the second-largest land sale in the state's history.
Nelson, Wagner and McCullar agree that a power plant wasn't on the table when the development agreement for the Victory Logistics District was approved in 2024.
"Power plants and data centers were never part of the plan we were pitched. It was all about manufacturing, which I was all for — kind of an industrial center," Wagner told The Nevada Independent.
But then the conversation shifted.
Last year, Microsoft purchased 300 acres within the district, and the company reportedly has two data center projects planned within Lyon County, including one in Fernley.
In a call with The Indy, Nelson said that while 324 MW could be enough to power a data center, some manufacturing companies could come in needing 20 MW or 30 MW of power and that Mark IV is focused on "being flexible based on customer needs."
"We have advanced manufacturers looking for this power, and data centers are looking for this power as well," Nelson said. "Having firm power on a set date … is attractive to manufacturing, and data centers as well."
Historically, NV Energy, the state's monopoly electric utility, would have been the power provider. But recently, large-load customers such as data centers are looking beyond NV Energy for power after the company stated earlier this year that it's unable to keep pace with the demand being placed on it for power, largely by data centers.
In adjacent Storey County, a data center developer is midstream on permitting for temporary natural gas plants; other data center developers are also looking at constructing their own gas and solar-powered plants to get ahead of NV Energy's queue.
"We work closely with NV Energy and we recognize NV Energy's burden" in getting power to the region in time, Nelson said.
Nelson said that the power plant, and visions for the logistics district, extend beyond business development. He said Mark IV has ideas including retail and commercial projects to attract tens of thousands of more residents to the city over the next 25 years.
"This is much bigger than a power plant. … this is a long-term, 25-year plan," he said.
