ESCONDIDO — The city has temporarily banned new artificial intelligence data centers while staff studies their potential effects and develops recommendations for regulating such facilities.
The Escondido City Council unanimously approved the 45-day moratorium Aug. 26 at the recommendation of city staff. The measure prohibits new data centers and the expansion or intensification of existing facilities while pausing approvals of related entitlement and development permits.
The city has no active or pending data center applications, according to the Development Services Department.
City Planner Garrett Smith said the moratorium is a proactive measure and was not prompted by a proposed project.
Data centers have become a growing concern nationwide as communities grapple with their effects on electricity supplies, water resources, land use and surrounding neighborhoods.
According to city staff’s research, potential impacts include increased water and electricity demand, strain on the power grid, large development footprints, persistent noise from cooling systems and backup generators, and greater demand for public services. Staff also said data centers could generate less tax revenue and fewer jobs than other industrial uses occupying similarly sized properties.
The issue has gained urgency in California as demand for artificial intelligence and cloud-computing services grows. In early 2026, data centers used about 1,000 megawatts, representing 2% of peak electricity demand within the California Independent System Operator’s territory, according to the California Energy Commission. The commission projects that demand will reach 4,500 megawatts, or 9% of peak demand, by 2040.
State lawmakers have also advanced legislation intended to prevent the cost of serving large data centers from being shifted to other utility customers. A package sent to Gov. Gavin Newsom includes Senate Bill 886, which would direct state utility regulators to establish rules governing how certain large electricity users pay for grid connections and the power resources needed to serve them.
Data centers vary significantly in size and resource use. Enterprise data centers, which serve individual companies or organizations, generally occupy between 5,000 and 100,000 square feet and can sometimes be retrofitted into existing buildings. According to city staff, such facilities typically require an information technology load of 1 to 10 megawatts and use between 3 million and 30 million gallons of water annually.
Larger colocation facilities, which house equipment for multiple tenants, can occupy between 50,000 and 300,000 square feet, require 10 to 50 megawatts and use between 30 million and 150 million gallons of water annually.
Hyperscale data centers, typically operated by major cloud-computing and AI companies, can encompass as much as 1 million square feet, require 80 to 150 megawatts and consume between 200 million and 1 billion gallons of water annually, according to the city.
Smith said Escondido’s existing development regulations do not specifically address AI data centers. During the moratorium, staff plans to conduct additional research and identify permanent regulatory options for the council to consider.
Staff expects to return to the City Council by Oct. 10 with its findings and recommendations. If additional time is needed, the council could extend the moratorium by 10 months and 15 days, followed by another extension of up to one year.
The city followed a similar process when it temporarily halted applications for battery energy storage systems while developing regulations for those facilities.
Resident Gregg Oliver urged city staff to consult technical experts as it conducts its research.
“We need technical expertise to understand what has gone wrong,” Oliver said.
Deputy Mayor Joe Garcia said data centers have become a major concern for elected officials in communities of all sizes across California and the country.
“This is something that’s being discussed not just in large cities, small cities, or rural areas – it’s kind of everywhere,” Garcia said.
