Oregon Governor Pauses DEQ Permits for New and Expanded Data Centers

Oregon Governor Tina Kotek recently directed the Oregon Department of Environmental Quality (DEQ) to use its existing administrative authority and discretion to pause processing and issuing air and water discharge permits for new or expanded data center facilities until July 1, 2027. The pause covers National Pollutant Discharge Elimination System (NPDES), Water Pollution Control Facility (WPCF), Air Contaminant Discharge Permit (ACDP), and Title V air quality permits. It also covers applications from cities and counties to renew or modify wastewater treatment plant permits to accommodate data center wastewater.

Impact on Projects Under Construction or in Operation

The directive, issued October 9, 2026, is aimed at new and expanded facilities. A project that already holds every DEQ permit it needs, and that will be built and run within those permits, should not be directly affected. However, projects that are partly built or already operating can still be caught in these situations:

• Permits still pending. Construction usually commences before a DEQ air or water permit has been issued. In those cases, the pending applications are frozen.
• Phased campuses. A permit may cover only the first buildings or a limited generator count. Later phases that need a new permit or a permit modification are likely to be treated as "expanded" facilities.
• Permit modifications. Adding backup generators or raising permitted emissions or hours usually requires DEQ approval. So do new cooling water discharges or a larger process wastewater volume.
• Municipal wastewater. A facility may discharge to a city or county treatment plant that needs its own permit renewed or modified to take more data center flow. That approval is expressly paused, even if the data center's own permits are in order.
• Renewals. The directive does not expressly address renewals of a data center's own existing permits. Owners with permits expiring before July 1, 2027, should ask DEQ how it will treat timely renewal applications.
• Construction stormwater. Projects that still need construction stormwater coverage should ask DEQ whether that coverage is being processed.

Recommended Steps

Data center owners and developers should review every existing DEQ permit and pending application. They should compare each against build-out and commissioning schedules. They should also review construction, power, financing, and customer contracts for delay, force majeure, and change-in-law provisions.

Outlook

The Governor described the pause as time for her to review reforms in the 2027 legislative session. Data centers have become an issue in the governor's race, and both candidates favor a moratorium. We expect the issue will garner significant attention in the upcoming session, which begins in January.

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