Across California, local governments are pausing data-center development as they confront questions about water supply, infrastructure, and the adequacy of existing land use rules. On October 6, 2026, Oakland adopted an interim urgency ordinance pausing approvals of land use entitlements and agreements for data centers. San Francisco also approved a 45-day pause that day. Water consumption figured among the concerns surrounding these facilities, alongside electricity demand and other community impacts.
In our earlier post on data centers and water supply, we discussed water supply issues to address early in project development in the context of new state legislation. But developers must also navigate local land use restrictions and water suppliers’ service requirements, a challenge now playing out in litigation over a proposed data center in Imperial County. That litigation shows how concerns about water supply can raise two distinct questions: whether a local government can lawfully impose a development moratorium and whether a developer can secure the water its project needs. California law requires specific findings to support an urgency ordinance, but successfully challenging those findings does not itself resolve a project’s water supply. Local agencies and developers must assess both issues—not only for data centers, but for other water-dependent industrial projects.
Link to How water concerns become land use concerns How water concerns become land use concerns
Community questions around a data center’s water supply are often broader than annual consumption. Local officials and suppliers may want to know whether a facility will draw on supplies needed during drought, require new treatment or delivery capacity, or depend on a water source that is not yet available at the site.
Proposed conversions of agricultural land may raise additional questions about changes in water use and the region’s economic priorities. Even where a developer proposes to offset new demand through conservation or land fallowing, the supplier and permitting agency may need to examine whether that approach is legally available and consistent with their operations and policies.
California’s September 2026 data-center legislation reinforces the connection between water planning and project approval through water-use information, efficiency, drought planning, and infrastructure-cost requirements. Water demands from other industrial projects such as advanced manufacturing and food processing facilities can also prompt local officials to reconsider a project while they evaluate community concerns.
Link to What a development moratorium requires What a development moratorium requires
Government Code section 65858 allows a city or county, including a charter city, to adopt an urgency ordinance prohibiting uses that may conflict with a contemplated general plan, specific plan, or zoning proposal. The agency must be considering or studying the proposal, or intend to study it within a reasonable time.
Adoption requires a four-fifths vote, and the initial ordinance lasts 45 days. Extensions require notice, a public hearing, and another four-fifths vote, and can prolong the moratorium to a total of two years. The ordinance must contain findings that a current and immediate threat to public health, safety, or welfare exists and that approving additional covered entitlements would result in that threat. The agency must also report on measures it has taken to alleviate the underlying condition ten days before the ordinance expires.
Water concerns may support the agency’s analysis, but a desire for further study does not replace the required findings. Local agencies should connect their findings to the identified threat, while developers evaluating a challenge should examine those findings and the ordinance’s scope and procedural history. New developments in Imperial County illustrate both the need for adequate moratorium findings and the separate water supply questions that can remain even after a developer successfully challenges a moratorium.
Link to Imperial County: a challenge to a moratorium does not create a water supply Imperial County: a challenge to a moratorium does not create a water supply
Recent data center litigation in Imperial County shows what a moratorium challenge can—and cannot—accomplish. Although a data center developer successfully blocked Imperial County’s data center development moratorium, it may not be able to secure a water supply for its project unless its separate challenge to Imperial Irrigation District’s denial of water service also succeeds.
The County adopted its moratorium on June 16 and extended it on July 14. The original ordinance addressed potential adverse effects and proximity to sensitive uses.
On October 6, the Board repealed both ordinances in response to a writ of mandate issued by the Superior Court in Imperial Valley Computer Manufacturing, LLC v. County of Imperial, Case No. ECU004800. According to the County’s repeal packet, the court found that the ordinances lacked the findings Government Code section 65858(c) requires. At the same meeting, however, the Board unanimously adopted a replacement moratorium, citing threats to water supply and local energy production. The developer’s successful challenge required the County to set aside its earlier ordinances, but did not solve the project’s water supply problem or prevent the County from adopting a new moratorium based on additional findings.
In a separate verified petition against Imperial Irrigation District, the developer argues that existing agricultural allocations and service entitlements can supply the proposed data center. To meet the facility’s annual industrial cooling demand of 880 acre-feet, the developer proposes to fallow a 160-acre farm it controls, relying on approximately 803.7 acre-feet of historical annual use. It claims that service entitlements associated with 5-acre and 46-acre portions of the project site can cover the remaining demand.
The dispute concerns whether IID must provide service under that proposed arrangement. IID denied service under rules restricting new connections where municipal potable water is reasonably accessible. The developer argues that those restrictions do not apply to industrial cooling and that IID’s policies and state law allow its proposed use of conserved agricultural water. The developer’s victory against the County’s first moratorium couldn’t resolve these issues.
Link to Address water and moratorium risks together Address water and moratorium risks together
Local agencies and developers should evaluate the legal basis for a proposed moratorium alongside the water supply questions that may independently affect whether a project can proceed. Four questions can guide that review:
- What water can the project legally obtain? Identify the source, the supplier’s authority and ability to serve the proposed use, and any conditions on service.
- What supports a proposed moratorium? Identify the specific water issue or other threat, the contemplated land use changes, the findings and procedures section 65858 requires, and the ordinance’s coverage.
- What decisions must come next, and who must make them? Local agencies should identify the studies and land use rules they intend to complete during the moratorium. Developers should identify which land use approvals and water-service commitments they still need before buying property, securing financing, or investing in infrastructure.
A credible water supply strategy can help agencies assess whether a moratorium is warranted and help developers address the concerns that may prompt one. Addressing those concerns early can also help identify a workable path toward both water service and project approval.
Our next post will examine how to evaluate whether a proposed water supply can actually support an industrial project: what rights or service commitments make the water available, how dependable it will be during drought, what infrastructure must be in place, and who will bear the cost. For agencies and developers, that diligence can help distinguish a promising supply proposal from one they can rely on when making approval and investment decisions.