Oregon Governor Halts Data Center Permits Amid Rising Power and Environmental Concerns
Governor Tina Kotek’s moratorium on data center pollution permits reflects growing tensions over energy use, water consumption, and local impacts as AI-driven demand surges.
Oregon’s Pause on Data Center Permits
Oregon Gov. Tina Kotek directed environmental regulators to temporarily stop issuing pollution permits to data centers, effectively pausing most data center development in Oregon until next summer. The directive applies to new or expanding data centers and includes halting processing of wastewater permit modifications for data centers. Kotek directed Oregon Department of Environmental Quality Director Leah Feldon to pause all air and water pollution permits for new or expanding data centers until July. Kotek also told the agency to stop processing applications from cities and counties seeking to renew or modify wastewater permits to accommodate data centers. The letter was obtained and shared widely by Oregon Rural Action, a grassroots nonprofit that advocates for social justice and environmental sustainability in Eastern Oregon.
Rising Energy and Water Demands from Data Centers
Data centers are projected to account for almost half of the growth in U.S. electricity demand between now and 2030. Global electricity consumption from data centers was estimated at 415 TWh in 2024, about 1.5% of total global use, with a 12% annual growth rate over the prior five years. The IEA projects data center electricity use could reach 945 TWh by 2030, growing at around 15% per year. Large data centers consume significant energy, with the largest using over 3,000 MW, raising concerns about grid strain and environmental impact.
Local Opposition and Environmental Concerns
Concerns over energy and water use have led to opposition to new data centers in parts of Europe, the U.S., and elsewhere during the AI boom. Amazon, which operates more than a dozen hyperscale data centers in Morrow and Umatilla Counties, said the move could cost Oregon thousands of jobs and billions in planned investment. “This directive was issued abruptly, without meaningful stakeholder engagement of the workers, businesses, and municipalities it will affect,” said Shannon Kellogg, vice president of Amazon Web Services Public Policy for the Americas, in a statement. “Amazon has been a committed partner in Oregon for over 15 years, and we will continue to advocate for policies that protect communities and support responsible growth.” Kaleb Lay, Rural Action’s director of policy and research, said the pause will provide an opportunity to evaluate recommendations from an Advisory Committee and consider regulatory reforms in the 2027 legislative session.
Economic Trade-Offs: Jobs vs. Sustainability
The pause allows time to evaluate recommendations from an Advisory Committee and consider regulatory reforms in the 2027 legislative session. Data centers have played a growing role in the race for governor, with both Kotek, a Democrat, and her opponent Republican state Sen. Christine Drazan, saying they favor a moratorium on the high-tech developments. Both candidates have attacked one another for not doing more to crack down. The environmental permitting freeze would expand a previous moratorium that paused data center development on state-owned land. Without air or water pollution permits, most large data centers known as “hyperscalers” wouldn’t be able to build in Oregon, whether on public or private land.
National Trends in Data Center Power Use
In the U.S. alone, which has almost nine times more data centers than any other country, power consumption by data centers is projected to account for “almost half of the growth in electricity demand between now and 2030.” This includes increased electricity costs. Concerns over environmental impacts, energy and water use, and other costs have led to opposition to new data centers during the AI boom. These movements have occurred in parts of Europe, the U.S., and elsewhere.
Legislative Action in 2027
Governor Tina Kotek’s directive explicitly states that the pause on data center permits will provide an opportunity for policymakers to evaluate recommendations from an Advisory Committee and consider regulatory reforms in the 2027 legislative session. Kotek wrote in her letter to Leah Feldon that she supports the possibility of new laws regulating data centers, particularly concerning their immense water use and energy demands. This pause is expected to lead to a legislative agenda that addresses the environmental and resource concerns raised by data center expansion. According to Kaleb Lay of Oregon Rural Action, the pause will give Oregon lawmakers time to implement new regulations that could govern aspects such as water usage, energy efficiency, and environmental impact assessments for future data center projects. The 2027 session may also see discussions on how to balance economic development with environmental sustainability, as the state weighs the long-term implications of hosting large-scale data centers.
The 2027 legislative session is anticipated to focus on refining the permitting process for data centers, ensuring that any new developments align with broader environmental goals. Kotek’s letter emphasizes the need for policy and/or regulatory reforms that may be considered in the upcoming session, with her support. This could include measures to enforce stricter environmental standards, promote renewable energy integration, or establish clearer guidelines for water consumption. As the state moves forward, the outcome of the 2027 legislative session will be a critical factor in shaping the future of data center development in Oregon, with potential impacts on both the technology sector and environmental policy at the state level.
Indiana’s Approval of Infrastructure for Google Data Center
In Indiana, utility regulators have approved a plan for AES Indiana to develop the infrastructure needed to power a 390-megawatt Google data center in Monrovia. The project includes solar energy facilities, battery storage systems, and upgrades to electric lines. The approval came after a meeting on October 7, where the Indiana Utility Regulatory Commission determined that the plan meets a 2025 state law requiring data centers and other large electricity users to cover 80% of the costs reasonably assigned to them. The total infrastructure investment is estimated at $1.3 billion, with AES Indiana stating that Google will pay all of the costs. However, the commission ruled that it is reasonable for existing customers to be assigned a share of the cost for upgrades, a decision that drew objections from consumer advocates.
AES Indiana claims that Google will pay for at least 100% of the costs under the law’s requirements. The project, located in Morgan County, southwest of Indianapolis, is the first data center to be filed under the new law. The Monrovia project will include two battery energy storage systems and a solar facility, with a total project cost of $737.3 million. Commissioner Joby Jerrells noted that the agreement not only satisfies the statutory requirement but also exceeds it substantially. The written order from regulators explains that the energy project is designed to mainly serve large electricity customers like the Google data center while protecting current AES customers. The approval includes a detailed breakdown of costs, with Google paying $32.3 million for direct connection facilities and $73.8 million in network upgrades being included in AES’s transmission rate base and recovered in future retail rates.
Sources
- Data center
- Gov. Kotek expands Oregon data center moratorium
- Indiana approves AES plan to power Google data center in Monrovia
Photo: Tony Miller (PDM-owner)
