East Bay city hits pause on data center development

The Oakley City Council in Contra Costa County, California, unanimously voted to enact a 45-day moratorium on all new data center land-use applications, making it the first such ban in the Bay Area. This temporary halt is designed to provide city officials with time to evaluate the long-term impacts of data center development and to craft robust zoning and environmental regulations. The ban has the potential to be extended for up to two years. City Attorney Derek Cole stated the measure enables Oakley to "study, deliberate and determine the acceptable scope" of future development. This action follows significant public opposition to the Bridgehead Industrial Project, where developer JB2 Partners ultimately withdrew plans for a data center near Highway 160 due to resident concerns about high power and water usage. Council Member Shannon Shaw emphasized the city's commitment to a deliberate and correct approach before approving large-scale infrastructure. This moratorium arises amidst broader regional and national discussions regarding the massive energy demands of AI-driven data centers. A Lawrence Berkeley National Laboratory report highlights that data centers' U.S. electricity consumption is projected to reach 12 percent by 2028. Locally, PG&E has already received applications for 7.2 gigawatts of new demand, primarily in San Jose. Oakley aims to finalize its zoning regulations by the end of the year, potentially setting a precedent for other smaller cities managing AI-related development.