San Diego Mayor Todd Gloria signed an executive order Thursday, Oct. 22, halting new data center construction in the city while officials draft regulations for the fast-growing industry.

Gloria announced the moratorium on X, saying the city would develop rules "that make sense for our neighborhoods, infrastructure, and future" before allowing data centers to move forward.

The action follows a week of backlash over a proposed 400-megawatt data center at the Naval Information Warfare Systems Command (NAVWAR) campus near Old Town. Voice of San Diego reported that Manchester Financial Group had been exploring the facility as part of its redevelopment of the 70-acre site. If built as proposed, it could become California's largest data center, according to CBS 8.

There is a significant catch. The NAVWAR property is federally owned, so the city has no jurisdiction over what gets built there. The moratorium would not apply to the NAVWAR project itself, Voice of San Diego noted. It would, however, govern data center proposals on city-permitted land elsewhere in San Diego, including La Jolla and other District 1 neighborhoods.

Electricity bills drive the opposition

Councilmember Sean Elo-Rivera, who sits on the board of San Diego Community Power, has led the pushback. He told the San Diego Union-Tribune on Oct. 21 that residents "should not be asked to subsidize a billionaire's data center through even higher electricity costs."

Elo-Rivera compared the proposed facility's energy demand to powering 300,000 homes, Fox 5 reported. San Diego ratepayers already pay among the highest electricity rates per kilowatt-hour in the country, the Union-Tribune reported, and grid upgrades for a facility that size could push bills even higher.

SDG&E said new state laws require large electricity users like data centers to cover the costs of serving their demand. A utility spokesperson told CBS 8 that existing customers would be protected from unreasonable cost shifts.

Developer says housing still central

Manchester Financial Group President and CEO Ted Eldredge said in a statement to CBS 8 that the company had only early conversations with energy providers and that no negotiations or agreements were in place. He said housing would be a major part of any final plan for the NAVWAR site.

The original redevelopment plan called for 8,900 residential units, two hotels totaling 480 rooms, retail and millions of square feet of commercial space, according to the Union-Tribune. Shifting market conditions prompted Manchester to explore other uses for portions of the site.

Rep. Scott Peters, whose 50th District includes the NAVWAR campus, said at an Oct. 16 press conference that the site should become a housing-centered community, not a data center. KPBS reported Peters called it an ideal location for homes and transit access.

State protections already in motion

Gov. Gavin Newsom signed Senate Bill 887 and Senate Bill 886 on Sept. 21, creating what he called the most comprehensive data center protections in the country, KPBS reported. SB 887 requires environmental review under the California Environmental Quality Act (CEQA) for all new data centers. SB 886 directs state regulators to create rate structures so data center operators cover their own grid costs.

The San Diego County Board of Supervisors also voted to support both bills. Board Chair Terra Lawson-Remer said San Diegans should not be stuck paying for the power demands of large tech corporations.

The full text of Gloria's executive order, including its duration and whether it covers all data centers or only large facilities, had not been published as of Oct. 22. The Navy's updated environmental impact statement for the NAVWAR site is expected sometime in 2027.