Life Enrichment Committee
September 22, 2026
AGENDA REPORT
TO: Honorable Mayor & City Council FROM: Councilmember Carroll Fife Council District 3
SUBJECT: Moratorium on Data Centers DATE: September 10, 2026
RECOMMENDATION
Councilmember Fife Recommends That The City Council Adopt An Interim Ordinance, Adopted As An Urgency Measure Pursuant To California Government Code Section 65858, Establishing A Temporary Moratorium On The Approval Of Any Land Use Entitlements And/Or Agreements To Allow The Development Or Operation Of Data Centers In The City Of Oakland, To Take Effect Immediately Upon Adoption
EXECUTIVE SUMMARY
Data centers are commonly referred to as facilities used primarily for the storage, management, processing, and transmission of digital information, which houses computer or network equipment, systems, servers, appliances, and other associated components related to digital data storage and operations. Data centers differ from traditional office, industrial, warehouse, or research and development uses because they consume significant amounts of electrical power and water; require extensive mechanical cooling infrastructure; rely upon diesel or other fossil-fueled backup generators, battery energy storage systems, transformers, and fuel storage; generate persistent noise, heat, and vibration; and are associated with increased energy and water consumption, among other environmental impacts.
Oakland’s existing Planning Code and development standards were adopted before the development of modern data centers and associated equipment and infrastructure, and therefore do not adequately regulate the resource use, utility demand, operational characteristics, environmental impacts, or cumulative impacts associated with data centers.
California Government Code Section 65858 authorizes the City Council, in order to protect the public safety, health, and welfare, to adopt as an urgency measure an interim ordinance prohibiting any uses that may be in conflict with a contemplated general plan, specific plan, or zoning proposal that the City is considering or studying or intends to study within a reasonable time.
The City is currently studying and intends to study potential amendments to its General Plan, Municipal Code, Planning Code, development standards, infrastructure policies, environmental review thresholds, and performance standards relating to the establishment, expansion, and operation of data centers and high-intensity digital infrastructure uses to determine appropriate regulatory standards. To allow this work to take place as well as have meaningful community Honorable Mayor & City Council
Subject: Moratorium on Data Centers
Date: September 10, 2026 Page 2
Life Enrichment Committee
September 22, 2026
engagement on this issue, this legislation would approve an interim ordinance, adopted as an urgency measure pursuant to California Government Code Section 65858, establishing a temporary moratorium on the approval of any land use entitlements and/or agreements to allow the development or operation of data centers in the City of Oakland.
The duration of the temporary moratorium will be 45 days, which will allow the City to start the process of developing comprehensive data center policies and regulations tailored to address the unique operational, environmental, infrastructure, and public safety impacts associated with such uses. An extension of the moratorium period, if needed, will require Council approval.
BACKGROUND / LEGISLATIVE HISTORY
The proliferation of the artificial intelligence sector has led to an increase in the development of large-scale data centers across multiple states. These facilities consume significant amounts of electrical power and water; require extensive mechanical cooling infrastructure; rely upon diesel or other fossil-fueled backup generators, battery energy storage systems, transformers, and fuel storage; generate persistent noise, heat, and vibration; and are associated with increased energy and water consumption, among other environmental impacts. 1 It is estimated that data centers consumed 176 terawatt-hours (TWh) in 2023, which amounts to over 4% of total U.S. electricity in 2023 and data centers are expected to consume up to 12% of electricity consumption in the United States 2028.2 Union of Concerned Scientists have noted that without safeguards “… data center growth could undermine grid reliability, slow the clean energy transition, and raise costs for ratepayers.” 3 Moreover, large data centers consume an exorbitant amount of water, up to 5 million gallons per day, to prevent data center equipment from overheating, increasingly making these developments a threat on freshwater supplies.4 To address the concerns with data centers, more than 300 cities, towns, and counties in the United States, including jurisdictions in California, have placed bans or moratoriums on the construction of hyperscale data centers.5 There are also efforts at the state level to advance regulatory legislation regarding transparency and better regulation of data centers. This includes, SB 1168 (McNerney), which would require the California Public Utilities Commission (CPUC) to assess 1 Data Center Development Report. Jan. 2026, https://www.selc.org/wp-content/uploads/2026/01/SELC-DataCenter-Development-Report-All-0126_F.pdf 2 United States Data Center Energy Usage Report. Dec. 2024, https://etapublications.lbl.gov/sites/default/files/2024-12/lbnl-2024-united-states-data-center-energy-usage-report_1.pdf 3 Data Centers in California. May 2026, https://www.ucs.org/sites/default/files/2026-05/data-centers-incalifornia.pdf 4 “Data Centers and Water Consumption.” Environmental and Energy Study Institute, https://www.eesi.org/articles/view/data-centers-and-water-consumption 5 “Community Backlash Against AI Data Centers.” TIME, 22 July 2026, https://time.com/article/2026/07/22/community-backlash-ai-data-centers/ Honorable Mayor & City Council
Subject: Moratorium on Data Centers
Date: September 10, 2026 Page 3
Life Enrichment Committee
September 22, 2026
opportunities for rate structures to address specified rate impacts associated with data centers, including paying a reasonable share of costs associated with transmission and distribution needs, paying for a proportionate share of load increases and procurement needs, and alleviating cost pressures on residential ratepayers. SB 887 (Padilla), which would prohibit data centers from receiving a categorical exemption from CEQA requirements but establishes criteria by which a data center construction project can qualify for permit streamlining under CEQA as an “environmental leadership development project”. AB 2619 (Papan), which would require data center owners to submit specified information on water use when they apply for a local business license or renew an existing one. AB 1577 (Bauer-Kahan), would require the owner or developer of a data center, upon applying for a discretionary permit, entitlement, or land use authorization required for the construction or operation of the data center, to submit to the applicable local agency, specified information, including the expected annual energy consumption and the expected sound levels attributable to the operation of the data center.
In line with the efforts at the State Legislature, it is prudent and critical for Council to take action at the local level and place a moratorium on data centers until such time the City can consider and implement specific regulations to protect residents from environmental, economic, health, and other impacts.
POLICY ANALYSIS
Oakland is served by an electrical grid, water supply system, and emergency response system that were not designed to accommodate the extraordinary and concentrated electrical demand, water demand, and hazardous-materials risks associated with large-scale data centers, and the City has not yet evaluated whether existing infrastructure, utility allocation policies, and emergency services are sufficient to serve such facilities without impairing service to existing residents, businesses, schools, hospitals, and public safety uses.
The City has received inquiries regarding the potential establishment of data center uses within existing and new buildings. Given advancements in technology, the City reasonably anticipates that absent this moratorium, applications for data centers will be submitted under existing regulations before the City can complete the necessary study and adopt regulations. Immediate action is needed through this proposed moratorium as data centers have the potential to impose significant negative impacts on local water and electrical resources, air quality, and community livability if approved prior to the development and adoption of appropriate standards.
The City needs time to develop appropriate development standards and study data centers to properly address secondary negative effects and the business in general. It is critical to adopt as an urgency measure an interim ordinance temporarily prohibiting the approval of data centers while the City Council studies revisions to the Oakland General Plan, Oakland Municipal Code and/or the Oakland Planning Code because approval of permits and other entitlements during the period in which the City studies appropriate regulatory controls would result in and exacerbate the threats to the public health, safety, and/or welfare of the City.
Honorable Mayor & City Council
Subject: Moratorium on Data Centers
Date: September 10, 2026 Page 4
Life Enrichment Committee
September 22, 2026
During the moratorium, the City would not issue or approve any building permit, occupancy permit, conditional use permit, variance, subdivision map or other land use entitlement, General Plan Amendment, Specific Plan Amendment, zone change, agreement or permit or regulatory license or permit for the construction, operation or development of a data center by any private or public entity on any property within the City during the 45 days the Urgency Ordinance is in effect.
For the purposes of the legislation, a data center is defined as a building, facility or structure used for the storage, management, processing, and transmission of digital data, which houses computer or network equipment, systems, servers, appliances, other associated components related to digital data storage and operations, and associated power and accessory infrastructure such as cooling systems, power generators, backup generators, or electrical substations.
The legislation exempts accessory server rooms, data processing equipment, or information technology facilities that are incidental, subordinate, and specifically related to a permitted principal use. Server room or accessory server room means a dedicated enclosed space inside a building containing servers and/or other computer equipment that is incidental, subordinate, or specifically related to the permitted principal use located within the same facility and relies solely on the principal use’s allocated water, and heating, ventilation, and air conditioning (HVAC) supply, and electrical supply.
FISCAL IMPACT
There is no direct fiscal impact associated with this proposal.
PUBLIC OUTREACH / INTEREST
There was no specific public outreach conducted beyond the posting and noticing of this agenda item. However, there continues to be immense community interest and organizing around this issue, including advocacy for a moratorium on data centers. With this moratorium in place the goal is for the appropriate departments to work on specific regulations and guardrails for data centers.
In doing this work, the City and Council will continue to receive community input and feedback.
COORDINATION
This legislation was drafted in collaboration with the Office of the City Attorney with input from various departments, primarily the Planning and Building Department.
SUSTAINABLE OPPORTUNITIES
Economic: If unregulated, data centers have the potential to be very extractive. In seeking to attract new investments and emerging industries, the Council and the City as whole have the responsibility to make sure residents are protected and are able to realize economic/community benefits.
Honorable Mayor & City Council
Subject: Moratorium on Data Centers
Date: September 10, 2026 Page 5
Life Enrichment Committee
September 22, 2026
Environmental: As discussed above, data centers consume significant amounts of electrical power and water; require extensive mechanical cooling infrastructure; rely upon diesel or other fossilfueled backup generators, contributing significantly to pollution and other environmental impacts.
Additionally, the environmental review process for these facilities, including community engagement, is often inadequate, leaving communities vulnerable.
Race & Equity: Residents of the City of Oakland, particularly in West Oakland and East Oakland, bear a disproportionate burden of air pollution, and the concentration of diesel backup generators, fuel storage, and continuous mechanical cooling associated with data centers in or near such communities could and would exacerbate existing environmental and public health inequities.
ACTION REQUESTED OF THE CITY COUNCIL
Councilmember Fife Recommends That The City Council Adopt An Interim Ordinance, Adopted As An Urgency Measure Pursuant To California Government Code Section 65858, Establishing A Temporary Moratorium On The Approval Of Any Land Use Entitlements And/Or Agreements To Allow The Development Or Operation Of Data Centers In The City Of Oakland, To Take Effect Immediately Upon Adoption
For questions regarding this report, please contact Rediat Bayeh, Policy Director for Councilmember Fife, at [email protected].
Respectfully submitted,
Councilmember Carroll Fife
District 3