MEDFORD, Ore. (Sep. 25, 2026) — Data centers, their potential economic benefits and their demands on electricity, water and local infrastructure will be the focus of a joint Medford City Council and Planning Commission study session Wednesday.
The discussion comes as communities across Oregon and state officials consider how to manage the growth of large data facilities, which support cloud computing, artificial intelligence, online services and data storage.
There is currently no active application for a data center in Medford.
Wednesday’s meeting will not involve a vote or decision. The session is intended to provide information and allow the City Council and Planning Commission to discuss whether changes to the city’s land use regulations may be appropriate. As with other study sessions, public comment will not be taken.
A data center is a room, building or facility that houses information technology infrastructure used to build, run and deliver applications and services, as well as store and manage data. Facilities can range from smaller retail and telecommunications centers to large wholesale and hyperscale operations.
Why data centers are attracting attention
Supporters of data center development point to potential economic activity, construction spending, property-tax revenue, jobs and investment in communities that host the facilities.
Oregon has already attracted major data center operations, particularly in parts of Eastern Oregon and the Columbia River region. State officials have described the industry as an economic development opportunity while also acknowledging concerns about electricity demand, infrastructure costs and environmental impacts.
In Clackamas County, where officials have also discussed how to prepare for possible future data center development despite having no active applications, commissioners considered potential tax revenue alongside concerns about energy and water consumption.
For communities seeking additional commercial and industrial investment, data centers can represent large-scale development without necessarily requiring the same number of permanent employees as other industrial uses.
That difference is part of the broader debate: communities may receive substantial investment and tax revenue, while the facilities can require significant amounts of land, electricity, water and infrastructure.
Electricity and utility costs
One of the most significant statewide issues is electricity demand.
Data centers operate around the clock and can require large amounts of electricity to power and cool computer equipment. Oregon Gov. Tina Kotek’s administration has raised concerns about ensuring that the costs of serving large new electricity loads are not shifted to residential and other business customers.
The state enacted the POWER Act in 2025, which included provisions intended to address electricity costs associated with large energy users such as data centers. A September 2026 report from the governor’s office said projected data center growth would require continued management of energy-load growth and grid capacity.
The issue is not simply how much electricity a facility uses, but who pays for the additional generation, transmission and distribution infrastructure needed to serve it.
Supporters argue that large electricity customers can contribute to the utility system and economic development. Critics have raised concerns about whether infrastructure investments and increased demand could ultimately affect other ratepayers.
Water use and environmental concerns
Water is another major issue, particularly because some data centers use water-based cooling systems.
The Oregon Data Center Advisory Committee has held separate discussions examining data center water use, availability and permitting, including testimony and presentations from local governments, water experts, environmental organizations, tribes and data center companies.
The amount of water required can vary substantially depending on the facility’s cooling technology, climate and design.
Opponents of unrestricted development have raised concerns about the potential effects of increased water demand on communities and natural resources. Other considerations include wastewater, water quality and the availability of water during periods of drought or other resource constraints.
The environmental debate also includes noise from cooling equipment, backup power systems and other mechanical equipment, along with air emissions from backup generators and the potential for large buildings and associated infrastructure to contribute to localized heat effects.
Land use and size
Data centers can also be substantially larger than many conventional commercial buildings.
Information provided for Wednesday’s Medford discussion indicates large facilities may require 50 to 150 acres.
That creates questions about where such facilities should be located and whether existing commercial and industrial zones are appropriate for them.
Under Medford’s current Land Development Code, data centers are allowed in all commercial zones and the Light Industrial zone. They are not currently allowed in the General Industrial or Heavy Industrial zones.
The city does not have special design or location standards specifically addressing data centers.
Potential issues for local officials include:
- Building size and height
- Distance from residential neighborhoods
- Location along major streets
- Noise levels
- Exterior lighting and glare
- Water and sewer capacity
- Transportation impacts
- Stormwater infrastructure
- Electrical infrastructure
- Availability and cost of suitable land
Large facilities could also affect the city’s long-term land supply if significant amounts of commercial or industrial property are committed to a single use.
Questions over jobs and long-term economic benefits
Another part of the debate concerns employment.
Data center construction can generate temporary construction jobs and require specialized workers during development. Once operating, however, facilities generally require fewer employees than similarly sized traditional manufacturing or industrial operations because much of the work involves automated computer systems and equipment.
The economic benefits therefore can depend on the scale of the investment, property values, tax structure, permanent employment, construction activity and how the project affects surrounding development.
Those considerations have been part of Oregon’s statewide examination of the industry. The Governor’s Data Center Advisory Committee has held meetings focused specifically on economic development and workforce issues, as well as separate meetings on water, energy and land use.
Oregon is examining statewide policy
Oregon established a Data Center Advisory Committee in January 2026 to develop policy recommendations concerning the state’s growing data center industry. The committee’s work has included economic development, workforce, water, energy and land-use considerations. Its report is due to the governor by October 2026.
The committee released a preliminary learnings and questions document Sept. 10 and opened a 45-day public comment period that runs through Oct. 24.
The statewide discussion has also become more cautious. On Sept. 8, Kotek directed state agencies to pause unapproved requests involving state-owned property for data center projects through July 1, 2027, or until further statewide action is taken. Her office said the pause is intended to give the state additional time to address questions involving water, energy and infrastructure costs.
That statewide review does not itself prohibit data centers from being developed on private property, but it demonstrates the broader policy questions Oregon officials are considering.
What Medford officials will consider
For Medford, Wednesday’s study session is not about approving or rejecting a particular project.
Instead, councilors and planning commissioners will receive two presentations: “Understanding Oregon’s Data Center Industry,” from ECONorthwest and the University of Virginia, and “Data Centers & Land Use in Oregon,” from the DLCD Data Center Advisory Committee.
The discussion could include whether Medford’s existing zoning rules are sufficient or whether the city should establish additional standards before a potential application is submitted.
Possible approaches include establishing limits on building size or location and creating standards related to residential proximity, major streets, noise and glare.
The city could ultimately choose to maintain its existing regulations, modify them or consider other approaches. Any future changes would require a separate process and would not be adopted during Wednesday’s study session.
The joint City Council and Planning Commission meeting is scheduled for 6 p.m. Sept. 30 in the Prescott Room at the Medford Police Department.
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