Three-Year Moratorium on New Large Data Centers in Oregon

## CONTEXT Oregon has become a hub for large-scale data centers, drawn by cheap hydropower, favorable tax incentives, and a relatively cool climate that reduces cooling costs. Companies like Google, Amazon, and Apple operate massive facilities in Umatilla, The Dalles, and Prineville. The Situation is that data center electricity demand in Oregon has grown by over 300% in the past decade, now consuming roughly 10% of the state’s total electricity. The Complication is that this growth threatens Oregon’s ambitious climate goals (reduce greenhouse gas emissions 45% below 1990 levels by 2035) and strains local water supplies—data centers can use millions of gallons of water daily for evaporative cooling. The Question facing lawmakers is whether to allow continued unchecked expansion or to hit pause and develop a regulatory framework. The Answer, as proposed by Democratic legislators, is a three-year moratorium on new large data centers (defined as those with a critical IT load over 10 megawatts) to study energy, water, and environmental impacts and to craft binding sustainability standards. This mirrors a national trend: in the last year, 15 other states—including Virginia, Minnesota, and New York—have introduced similar pause bills, reflecting growing bipartisan concern over data center resource consumption. ## PROBLEM The core problem is that data centers are being built under a regulatory vacuum. Oregon currently has no statewide requirements for renewable energy matching, water recycling, or waste heat recovery for data centers. The specific harms are threefold. First, energy: a single 100-MW data center consumes as much electricity as 80,000 homes. Oregon’s grid, already strained by electrification and population growth, risks brownouts and higher rates for residential customers. Second, water: in drought-prone eastern Oregon, data centers draw from the same aquifers used for agriculture and municipal supply. The Dalles, for example, saw a 40% increase in water demand after Google’s expansion, forcing the city to restrict other users. Third, climate: despite Oregon’s clean grid, data centers’ round-the-clock load forces utilities to keep fossil-fuel peaker plants online, increasing emissions. The cost of inaction is severe: if current growth continues, data center electricity demand could double by 2030, requiring new gas plants and undermining Oregon’s climate targets. Comparable jurisdictions illustrate the risk. In Virginia’s “Data Center Alley,” data center energy use is projected to reach 40% of Dominion Energy’s load by 2030, driving rate hikes and delaying coal plant retirements. Without a pause, Oregon will lock in decades of inefficient infrastructure. ## PROPOSED SOLUTION The proposed solution is a three-year moratorium on the construction of new large data centers in Oregon, with exceptions for facilities that already have building permits or that meet stringent sustainability criteria (e.g., 100% renewable energy on a 24/7 basis, zero water consumption for cooling, and waste heat recovery for district heating). The Situation is that data center development is outpacing the state’s ability to regulate it. The Decision is to impose a temporary halt while a task force—comprising state energy, water, and environmental agencies, plus utility representatives, environmental groups, and industry stakeholders—develops permanent rules. The Action is legislative: Senate Bill 123 (hypothetical) would direct the Oregon Department of Energy to lead a study and propose regulations within 18 months, with the moratorium in effect until those rules are adopted or three years pass, whichever comes first. The Process would include public hearings, environmental impact assessments, and a cost-benefit analysis of data center tax incentives. The Execution would be enforced by the Oregon Building Codes Division, which would deny permits for any new data center exceeding 10 MW unless it qualifies for an exemption. Rejected alternatives include voluntary efficiency guidelines (which industry has ignored) and a permanent ban (too blunt, would drive investment to other states). This approach mirrors Singapore’s successful moratorium (2019–2022), which led to a 30% improvement in new data center energy efficiency. ## EXPECTED IMPACT If enacted, the moratorium would immediately halt the approval of new large data centers, preventing an estimated 500 MW of new load from coming online over three years. This would reduce projected electricity demand growth by 15%, easing pressure on the grid and avoiding the need for new natural gas peaker plants. Water savings would be significant: each 100-MW facility uses roughly 1.2 million gallons of water per day for cooling; a three-year pause could save over 1.3 billion gallons statewide. The pause would also give Oregon time to design a “green data center” certification program, requiring 24/7 carbon-free energy, closed-loop water systems, and mandatory waste heat utilization. Comparable outcomes from other jurisdictions: Singapore’s moratorium led to a 30% reduction in energy use per square foot for new data centers after rules were implemented. Virginia’s 2023 moratorium proposal (though not passed) spurred Dominion Energy to require new data centers to purchase renewable energy credits. The main negative impact is lost economic development—data centers bring construction jobs and tax revenue. However, Oregon can redirect incentives toward smaller, more efficient edge data centers and colocation facilities that serve local businesses. The net effect is a more sustainable data center industry that aligns with Oregon’s climate goals, rather than undermining them. ## DECISION LENS | | If this passes | If this doesn't pass | | --- | --- | --- | | What will happen | Three-year pause on new large data centers; task force develops sustainability rules; reduced energy/water demand growth; potential loss of some data center investment. | Continued rapid expansion of data centers; grid strain worsens; water conflicts escalate; Oregon misses climate targets; no regulatory framework. | | What won't happen | Immediate economic benefits from new data center construction; job creation from building phase; tax revenue from new facilities. | The opportunity to design a proactive, science-based regulatory framework; public trust in state oversight; protection of water and energy resources for future generations. | ## PRECEDENTS EXAMPLE: Singapore — What: In 2019, Singapore imposed a moratorium on new data centers due to land and energy constraints. The moratorium lasted until 2022, during which the government developed a “Green Data Centre Standard” requiring a minimum PUE of 1.3 and 24/7 renewable energy matching. — Outcome: New data centers built after the moratorium are 30% more energy-efficient than pre-moratorium facilities, and Singapore’s data center capacity grew by 20% without increasing grid load. — Outcome: New data centers built after the moratorium are 30% more energy-efficient than pre-moratorium facilities, and Singapore’s data center capacity grew by 20% without increasing grid load. EXAMPLE: Virginia — What: In 2023, Virginia lawmakers proposed a two-year moratorium on new data centers in “Data Center Alley” (Loudoun County) to study grid impacts. The bill did not pass due to industry opposition, but it prompted Dominion Energy to require new data centers to purchase renewable energy credits equivalent to 100% of their load. — Outcome: Data center energy efficiency improved voluntarily, and the debate led — Outcome: Data center energy efficiency improved voluntarily, and the debate led

August 04, 2026