Data Center Divide: Santa Clara Embraces Growth While San Francisco Imposes Moratorium

Santa Clara, a city home to tech giants like Nvidia, Intel, and AMD, is actively expanding its data center capacity, investing $459 million to bolster its power grid for future growth. The city boasts the densest cluster of data centers on the West Coast, with 58 facilities largely within its limits and those of neighboring Mountain View.

This expansion brings significant financial benefits to Santa Clara residents. The city-owned utility, Silicon Valley Power, charges a comparatively low rate of 18.2 cents per kilowatt-hour, substantially less than the 42.2 cents charged by the private utility PG&E. Furthermore, the city collects an estimated $29.5 million annually from these server farms, funding essential public services such as police, parks, and libraries.

A resident of an apartment complex surrounded by data centers noted that their combined utility bills for electricity, garbage, and water are approximately $130. While expressing openness to more data centers, the resident suggested a decrease in rent or electricity bills as a potential benefit.

In stark contrast, San Francisco is implementing a 45-day moratorium on new data centers. Supervisors cite concerns about the impact on the Bayview neighborhood, an area with a history of pollution. Supervisor Shamann Walton, who introduced the measure, emphasized the need to fully understand the implications before approving additional facilities.

The differing approaches can be partly attributed to the cities' distinct demographics and urban planning. San Francisco, with a population density of approximately 18,600 people per square mile across 47 square miles, means new data centers are more likely to be situated near residential areas. Santa Clara, by comparison, has a lower population density, with 133,000 people spread across 18 square miles, allowing data centers to be predominantly located within industrial zones.

Despite Santa Clara's embrace of data centers, not all local sentiment is universally positive. Complaints have been documented regarding noise, height, and aesthetics from certain facilities. Concerns about environmental impact, such as effects on local wildlife, have also been raised by some residents.

Data center researcher Jonathan Koomey noted that the impact of data centers can vary significantly depending on their size and operational methods. He also highlighted that many data centers in the Santa Clara area utilize recycled water for cooling, minimizing their freshwater footprint. According to a May 2025 Valley Water briefing, the treated wastewater used is not potable but is suitable for industrial cooling and landscape irrigation.

Santa Clara's model also ensures that developers bear the costs associated with expansion. For instance, Intel is reportedly funding the entire cost of expanding a local substation to accommodate increased power demands, along with approximately $10 million in fees, as outlined in a February council report.

Nationally, public opinion appears divided, with a Gallup poll from May 2025 indicating that nearly seven in 10 Americans would oppose a data center in their community, a sentiment more widespread than opposition to nuclear power plants. This widespread concern contrasts with the specific infrastructure and revenue considerations driving local policies in cities like Santa Clara.