Hillsboro pauses new AI data centers. What's next over the next 120 days?

Hillsboro, Oregon, has enacted a 120-day moratorium on new data center applications. The Hillsboro City Council voted to adopt the pause, allowing city staff to study the facilities' potential impacts on the community and environment, specifically concerning water use and electricity demand. This decision was driven by growing concerns among residents and advocates about the significant water and energy consumption of data centers, particularly those supporting AI software.

According to the City of Hillsboro, data centers accounted for just under 2% of the city's water use last year, while Portland General Electric (PGE) reported that data centers represented 13% of its energy deliveries. Advocates, including Tanvi Varma, express concerns that increased data center development could lead to higher consumption of fossil fuel electricity due to insufficient clean energy on the grid. PGE, a utility provider, seeks flexibility to allow data centers to help fund new clean energy projects in exchange for faster electricity service.

The Data Center Coalition, an industry group, issued a statement indicating that local moratoriums on data centers could signal that an area is closed for business, potentially impacting the 60,620 jobs and nearly $6 billion in labor income generated by data centers across Oregon. City leaders emphasize the need for comprehensive, third-party studies to assess environmental impacts on air, soil, and water, as well as local job implications. Following the 120-day period, which may be extended, the Planning Commission and City Council will hold work sessions to determine next steps, including potential new regulations.