Oregon has welcomed data centers for decades, but a wave of larger facilities driven by the artificial intelligence boom is prompting state and local leaders to reconsider how they regulate the industry.
The debate centers on what Oregon gets from the industry's continued growth — and what communities could be asked to give up in return. Concerns about electricity and water use, land development and lucrative tax breaks have fueled public opposition, while state officials consider new rules for an industry that has brought investment and jobs to some communities.
“What has changed is the AI boom and the fact that artificial intelligence requires a lot more computing power than past data centers have required,” Oregon Public Broadcasting politics reporter Dirk VanderHart said.
Oregon has roughly 125 data centers, concentrated largely in the Portland area, along the Columbia River in Eastern Oregon and in Central Oregon, according to OPB.
But the rapid expansion of the industry has brought increased scrutiny of the resources the facilities consume and the tax incentives they receive.
VanderHart said opposition is not confined to Oregon's urban areas.
“The polling showed that voters in rural areas — Eastern Oregon, Southern Oregon — also share these negative perceptions,” VanderHart said.
Data centers have historically been attractive to some communities because they bring construction projects and investment. They can also qualify for significant property tax breaks intended to encourage economic development.
Those incentives have increasingly come under scrutiny. Data centers currently receive more than $400 million a year in Oregon property tax breaks, according to OPB.
Gov. Tina Kotek has suggested the state needs to reconsider whether it is making it too easy for the industry to expand.
“Oregon needs to stop being a cheap date and making it too easy for them,” Kotek said in July.
The state has already begun changing how it approaches the industry's electricity use. Oregon lawmakers passed a law in 2025 intended to ensure data centers and other large energy users cover the costs they impose on the electrical grid. In July, state utility regulators approved higher rates for data centers and other large energy users served by Portland General Electric.
Kotek has also convened a seven-member Data Center Advisory Committee to consider broader changes to Oregon's approach. The committee is examining energy and water use, land use, economic development, affordability and taxation as it develops recommendations for the governor.
“I think we will see recommendations about at least creating new transparency requirements, new data reporting requirements for these data centers that are in Oregon and want to be in Oregon,” VanderHart said.
The committee is expected to release draft findings after Labor Day before taking additional public testimony. Its final report is due to Kotek by October.
Guest
- Dirk VanderHart, OPB politics reporter
