Bay Area city becomes first to ban data centers over power and water concerns
oakley became the first Bay Area city to temporarily ban new data centersSignaling a more cautious approach as other parts of Silicon Valley continue to grow put projects in order To meet the growing demand for artificial intelligence.
Oakley City Council They unanimously voted Tuesday to impose a 45-day moratorium on data center projects and prohibit the city from accepting or processing related land use applications. Under state law, the ban can be gradually extended for up to two years.
City Attorney Derek Cole said The moratorium will give authorities time to “study, negotiate and determine the acceptable scope” of data center development.
“And at the end of one year, you can extend it for another year. But the idea is that in those two years, you’ll have improved and developed some solutions in how you deal with this problem,” Cole said.
Prime Data Center in Vernon, California on December 25, 2025. Oakley became the first Bay Area city to temporarily ban new data centers, citing energy and water concerns. (Myung J. Chun/TNS)
The decision comes after growing concerns among residents of the eastern Contra Costa city about the impacts of large-scale data centers, especially the heavy demand for electricity and water.
These concerns first emerged during a debate. Köprübaşı Industrial Projectwhere a developer backed out of plans to build a data center near Highway 160 and Bridgehead Road following public outcry.
council member Shannon Shaw He said the city should act consciously.
“I really want to make sure that this is something we do and that we do it right,” he said.
The debate at Oakley reflects a broader shift as demand for data centers accelerates with the rise of artificial intelligence. A. Report from Lawrence Berkeley National Laboratory found that data centers accounted for about 4.4% of U.S. electricity use in 2023, up from 1.9% in 2018, and could rise to as much as 12% in 2028.
Public services are already preparing for this growth. Pacific Gas and Electric Co. received applications representing 7.2 gigawatts of new data center demand across its service area, with many projects expected to come online by 2030.
majority of them in the San Jose areaAccording to PG&E.
Chillers that cool water are connected to a data center building during a tour of the OpenAI data center in Abilene, Texas, USA, on September 23, 2025. It is estimated that each building needs 1 million gallons of water to recycle. (Shelby Tauber/Dallas Morning News)
At the same time, California is losing ground in the race to build them. The state currently accounts for about 5 percent of the nation’s data center capacity, but that share could drop to 1 percent if projects planned elsewhere move forward. History analysis Data from Cleanview.
Industry experts point out that high electricity costs and long waiting times for power connections are major hurdles.
“We are so far behind because we don’t have energy service at scale,” Jerry Inguagiato, leader of the data centers team at Silicon Valley-based commercial real estate firm CBRE, told the Chronicle.
Oakley officials plan to hold public workshops this summer and aim to implement zoning rules later this year. Mayor Hugh Henderson wanted the regulations to be completed before the end of the calendar year.
This article was first published at: Bay Area city becomes first to ban data centers over electricity and water concerns.
