Key Oregon Data Center Report Raises More Questions than Answers, State Seeks Public Comment
Oregon's Data Center Advisory Committee released a preliminary report raising questions about the industry's growth and impact, rather than offering direct recommendations. The report precedes final recommendations due by year-end, following public comment, and highlights concerns over water, energy, and tax breaks. Governor Tina Kotek also announced a one-year pause on data center approvals for state-owned land amid increasing public opposition and political debate.
After nine months of fact-finding, Oregon Governor Tina Kotek's Data Center Advisory Committee has released a 20-page "preliminary learnings and questions" report, now open for public comment until October 24. This report deviates from an initial mandate for a cost-benefit analysis, with Gov. Kotek redirecting the committee to synthesize findings for the public before delivering final recommendations by year-end.
The committee's findings, while not containing explicit policy recommendations, indicate a consensus on the need for more stringent oversight of the data center industry and a centralized repository for information on facilities' type, resource consumption (water and energy), and state tax incentives. This report emerges amidst heightened public backlash and political contention in the Oregon governor's race, with both Gov. Kotek and her Republican challenger, state Sen. Christine Drazan, positioning themselves as advocates against the industry's unchecked expansion.
Recently, Gov. Kotek expressed support for a statewide data center moratorium and initiated a one-year pause on approvals for data centers on state-owned land or in state buildings, though she acknowledged limitations on mandating an all-out statewide ban. Public feedback to the committee has been overwhelmingly negative, with roughly 90% of over 700 written comments expressing opposition, primarily citing utility affordability concerns and originating mostly from the Portland metropolitan area.
Oregon remains a significant market for data centers, attracting development with its lack of sales tax, moderate climate, and property tax incentives. However, the report highlights challenges in data collection due to corporate secrecy and non-disclosure agreements. An ECOnorthwest analysis revealed a substantial increase to between 123 and 144 facilities in the state, with approximately 9,000 acres proposed for future development, many in rural areas. Key issues identified include water quantity (especially competing with irrigation), energy consumption and its potential to spur clean energy investment, and concerns over overly generous state and local tax breaks, exemplified by Morrow County's assessor noting $7.2 billion in tax-exempt data center property by 2025.