Oakley Becomes First Bay Area City to Ban New Data Centers

City cites energy and water concerns as it studies the impacts of large-scale data centers.

Apr. 16, 2026 at 1:50am

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A highly detailed, glowing 3D illustration of the complex cooling infrastructure inside a data center, with neon blue and pink lights illuminating the intricate network of pipes, fans, and heat exchangers, conceptually representing the energy-intensive nature of modern data centers.As data centers' energy and water demands rise, cities like Oakley are taking a more cautious approach to managing their growth.Oakley Today

The city of Oakley has become the first in the Bay Area to temporarily ban new data centers, approving a 45-day moratorium as officials study the industry's heavy energy and water demands. The move follows growing concerns among residents about the impacts of large-scale data centers, particularly their strain on local utilities. Oakley plans to hold public workshops this summer and introduce new zoning rules later this year to address the issue.

Why it matters

Oakley's decision reflects a broader shift as demand for data centers accelerates alongside the rise of AI. Data centers now account for a significant and growing share of U.S. electricity use, raising concerns about their environmental impact. The move also highlights challenges California faces in attracting new data center projects, with high energy costs and long wait times for power connections driving development to other states.

The details

Oakley's City Council voted unanimously to impose a 45-day moratorium on new data center projects, barring the city from accepting or processing related land-use applications. City officials say this will give them time to 'study, deliberate, and determine the acceptable scope' of data center development. Under state law, the ban can be extended in phases to last up to two years. The decision follows a debate over the Bridgehead Industrial Project, where a developer withdrew plans to build a data center after public pushback.

  • On April 12, 2026, the Oakley City Council voted to impose the 45-day moratorium.
  • Oakley plans to hold public workshops on data centers this summer.

The players

Oakley City Council

The governing body of the city of Oakley, California, which voted to temporarily ban new data centers.

Derek Cole

Oakley's City Attorney, who said the moratorium will give officials time to develop regulations for data centers.

Shannon Shaw

An Oakley City Councilmember who said the city should move deliberately in addressing data center development.

Hugh Henderson

The Mayor of Oakley, who has asked that new zoning rules for data centers be completed before the end of 2026.

Pacific Gas and Electric Co. (PG&E)

The utility that has received applications representing 7.2 gigawatts of new data center demand across its service area, with many projects expected to come online by 2030.

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What they’re saying

“And then at the one-year mark, you can extend for one more year. But the idea is that in those two years, you will be developing and will have developed some resolution of how to deal with the issue.”

— Derek Cole, Oakley City Attorney

“I really want to make sure that this is something that we do, and we do it right.”

— Shannon Shaw, Oakley City Councilmember

What’s next

Oakley officials plan to hold public workshops on data centers this summer and aim to introduce new zoning rules later this year, with the goal of completing the regulations before the end of 2026.

The takeaway

Oakley's decision to temporarily ban new data centers highlights growing concerns about the industry's environmental impact, particularly its heavy demands on energy and water resources. As AI-driven data needs continue to rise, other cities may follow Oakley's lead in taking a more cautious approach to data center development.