Governor Kotek says Oregon needs to “get this right” before more projects move forward after backing local governments putting data centers on hold

Oregon – Oregon Gov. Tina Kotek announced support for locally imposed moratoriums on new data center development while the state reviews recommendations from the Oregon Data Center Advisory Committee and considers a new legal framework for the industry.

Kotek said local governments should be able to pause new data center projects while Oregon works to determine how the rapidly growing industry should be regulated.

“Data center corporations are taking Oregon out to an expensive dinner and leaving our environment, communities, and people to foot the bill,” Kotek said.

The governor said the state does not currently have the authority to impose a statewide moratorium on new data center development. However, she said she supports local communities that choose to take action while the state examines the broader effects of data center construction and operations.

Kotek’s comments came after she terminated the state’s contract to sell approximately 32 acres at the Mill Creek Corporate Center in southeast Salem for a proposed data center project.

The governor said her decision to end the state land sale reflected the need for additional discussion about how Oregon should approach future data center development.

“I ended the use of state land in a data center development here in Salem because we need to have more conversations about how to do this better,” Kotek said.

She added that local governments were taking the appropriate approach by calling for a pause while state officials work toward a broader policy.

The issue has become increasingly significant as demand for data centers grows alongside the expansion of cloud computing, artificial intelligence and other technology services that require large amounts of electricity.

Data centers can bring economic development, construction activity and new investment to communities, but they can also require substantial amounts of electricity and infrastructure.

Kotek said Oregon needs to balance the potential economic benefits of new facilities with the costs associated with electricity, infrastructure improvements and environmental impacts.

In January, Kotek convened the Oregon Data Center Advisory Committee to examine the state’s approach to the industry and develop policy recommendations.

The committee was tasked with identifying ways Oregon could take strategic advantage of the economic development opportunities created by data centers and other large-load industrial electricity users while maintaining sustainable utility costs and infrastructure demands.

The governor’s office said the committee is also considering environmental impacts and how those effects could affect Oregonians, particularly low-income and working households and utility ratepayers.

The recommendations are expected to help inform discussions about potential legislation during the next legislative session.

Kotek’s support for local moratoriums therefore represents a temporary approach while the state considers longer-term policies governing new data center projects.

Rather than establishing a statewide prohibition, the governor is encouraging local governments to use their existing authority to determine whether a pause is appropriate in their communities.

The Salem project has become an early example of the governor’s concerns. By terminating the proposed sale of state-owned land, Kotek prevented the approximately 32-acre site at Mill Creek Corporate Center from moving forward for the planned data center development.

Kotek said the decision was part of a broader effort to ensure Oregon develops a clearer strategy before additional projects move ahead.

The debate is likely to continue as the Oregon Data Center Advisory Committee develops its recommendations and state lawmakers prepare to consider whether changes to Oregon law are necessary.

For Kotek, the issue is not simply whether data centers should be built in Oregon, but how those projects can be developed without placing disproportionate costs on communities, the environment or utility customers.

“Local governments are doing the right thing in calling for a pause until we can get this right,” Kotek said.