Oregon communities are pressing for new limits on data centers after years of disputes over tax incentives, public disclosure and the industry’s growing demand for electricity, water and land. The debate has intensified as companies pursue projects across the state and residents challenge deals made with little public input. Two-thirds of Oregonians surveyed this summer supported a moratorium on new data centers, according to polling cited by state officials. Gov. Tina Kotek and Republican gubernatorial candidate Christine Drazan have both backed pausing new projects while the state develops rules to protect the environment and power supply. Local governments are weighing their own restrictions. Hillsboro adopted a four-month pause on new data center applications in July, after residents objected to the facilities’ use of scarce industrial land and the city’s handling of tax incentives. Two companies submitted permit applications while the council was considering the pause, Mayor Beach Pace said. The industry’s tax breaks are estimated to exceed $450 million a year statewide. In Hillsboro, data centers received $84 million in tax breaks last year while employing fewer than 300 people combined, according to figures cited by the city’s critics. Operators sought multiple incentives shortly before a state moratorium on one category of tax break took effect, potentially extending some benefits into the 2050s. The rapid expansion has raised concerns about whether existing laws can protect community interests. Oregon’s data centers are among the largest electricity users in the state, and energy planners have warned that rising demand and limits on new supply could contribute to shortages later this decade. In the Portland area, advocates say data center development is also competing with other industries for limited industrial land. A 2025 state law, the POWER Act, created a separate electricity customer category for data centers and directed regulators to set rates that reflect the cost of serving them. Portland General Electric subsequently raised rates for its data center customers by nearly 30 percent. Supporters said the policy helps prevent other ratepayers from carrying the industry’s costs. The fight has also centered on transparency. In The Dalles, Google previously opposed releasing records about water use at its data centers. The company later allowed the city to disclose its consumption, which amounted to nearly 40 percent of the city’s water last year, but continues to block disclosure of its projected future use. Mayor Richard Mays said secrecy has deepened public suspicion as the drought-stricken city considers expanding water storage. In Salem, California-based Verrus proposed a $5 billion data center after working with the city under a nondisclosure agreement for about a year. The project became public as residents were objecting to limited disclosure and the use of tax incentives. Verrus says it plans further outreach and is open to changes in response to community concerns. The company has described nondisclosure agreements as standard in economic development, while acknowledging that communities expect greater transparency from data center developers. Public officials and watchdogs have raised concerns about potential conflicts of interest in other negotiations. Amazon paid more than $100 million to Windwave, a fiber-optics provider owned by public officials in Morrow County, while negotiating tax and land deals with those officials. Three officials later agreed to pay state ethics penalties for failing to disclose potential benefits tied to Amazon’s growth. Oregon’s Justice Department has sued Windwave’s owners, alleging they improperly acquired the company. Amazon is not a defendant in that case and says it acted appropriately. Industry influence has also shaped state policy. Amazon led a lobbying effort that helped defeat a 2023 proposal to require data centers to use renewable energy. The company says it has supported renewable energy projects in Oregon and is bringing more than 1.3 gigawatts of solar and wind power and 1.2 gigawatts of battery storage online in the state. The political landscape has shifted since that failed effort, said Rep. Pam Marsh, an Ashland Democrat who sponsored the proposal. She said voters are more familiar with the industry’s impacts and want clearer evidence that communities benefit from development. Common Cause Oregon Executive Director Kate Titus said the companies’ financial and political advantages make it essential for the state to put public interests first. Former Secretary of State Phil Keisling has called for updated safeguards requiring more information about data centers’ use of public resources and the benefits they receive. Hillsboro council President Rob Harris said local governments will play a central role in shaping the industry’s future, but that existing zoning rules and state laws have not kept pace with its growth. The coming legislative session is likely to bring a major contest over those rules. Data center companies are preparing to lobby against new restrictions, while residents and local officials are seeking moratoriums, an end to some tax breaks and required disclosure of resource use and development plans. Rep. Marsh said resistance to reasonable safeguards could further undermine public support for the industry.