As America races to expand the computing and energy infrastructure required for artificial intelligence, Riverside is considering a blanket ban on data centers. Instead of prohibition, Riverside should protect residents and ratepayers, demand infrastructure and jobs, and make private industry—not taxpayers—carry the risk.

Sometimes a single statement tells you a great deal about the direction of a city.

This week, Riverside Councilmember Philip Falcone publicly stated:

“I am currently authoring a data center ban for Riverside which will be proposed at a future council meeting.”

Not regulations.

Not development standards.

Not a temporary moratorium while Riverside Public Utilities studies electrical capacity.

Not requirements that developers pay for transmission, generation, water, roads or other infrastructure necessitated by their projects.

Not minimum standards for jobs, capital investment, cybersecurity, water consumption, noise, setbacks or community benefits.

A ban.

Before the City Council travels down that road, Riverside residents deserve a much more serious discussion about what data centers are, what artificial intelligence means to America’s economic and national security, what Riverside could gain—or lose—and why our city’s recent approach to economic development makes a categorical ban particularly difficult to understand.

There are very legitimate reasons to scrutinize data centers.

There are considerably fewer reasons to prohibit an entire industry before determining whether Riverside can structure development in a manner beneficial to its residents.

AI Is Not a Fad. The Infrastructure Behind It Matters.

The artificial-intelligence revolution isn’t occurring somewhere in an imaginary “cloud.”

The cloud is physical.

AI requires semiconductor fabrication, fiber networks, enormous computing resources, data centers, cooling systems and massive amounts of electricity.

The federal government’s America’s AI Action Plan is unusually direct about this. Its second pillar is literally titled “Build American AI Infrastructure.” It identifies factories to manufacture chips, data centers to operate those chips, and new energy generation as essential infrastructure for American AI leadership. It also specifically calls for high-security data centers capable of supporting military and intelligence workloads. The White House⁠

That should tell Riverside something.

Washington isn’t discussing whether America needs this infrastructure.

It is discussing how quickly America can build it and how securely it can be built.

The 2026 Economic Report of the President lists announced investments involving AI, data centers, chips and associated energy infrastructure measured not in millions, but in trillions of dollars. The projects listed in one federal table alone total more than $3 trillion in announced investment, although those announcements cover different time horizons and should not be confused with money already spent. The White House⁠

Meanwhile, China is pursuing the same strategic objective.

This is an international competition for compute capacity, semiconductors, electrical generation, technical talent and ultimately leadership in artificial intelligence.

AI already has applications in cybersecurity, intelligence analysis, military systems, logistics, medicine, manufacturing, finance, scientific research and virtually every other important sector of a modern economy.

So no, I would not characterize every local data-center restriction as “pro-China.”

But I will say this:

Policies that unnecessarily prevent America from building the infrastructure necessary to compete in artificial intelligence ultimately make that competition easier for China.

Riverside doesn’t control American AI policy.

But Riverside should understand the economic and national environment in which it is making this decision.

A Data Center Is Not Automatically Good Economic Development

Let’s be equally clear about the other side.

I am not suggesting Riverside should approve every data-center proposal that lands at City Hall.

Far from it.

Data centers can consume extraordinary amounts of electricity. Some designs can consume significant water. They can require major transmission upgrades. They can occupy substantial industrial property while creating fewer permanent jobs per acre than traditional manufacturing.

They can create noise.

They can place new demands on local infrastructure.

And a poorly negotiated data-center project could result in existing Riverside Public Utilities customers effectively subsidizing infrastructure needed by one enormous industrial customer.

That would be unacceptable.

But that is an argument for competent government.

It isn’t an argument for banning an industry.

A serious city asks:

Under what conditions would we permit this development?

An unserious city simply says:

Ban it.

Riverside Has Something Most Cities Don’t: Its Own Electric Utility

This is where the discussion becomes particularly important for Riverside.

Riverside owns its municipal electric utility.

That means electricity isn’t merely a constraint in this discussion. Properly structured, it could also be an economic-development asset.

For years, I have argued that Riverside needs to confront its long-term electrical infrastructure requirements seriously—including transmission capacity, resiliency and modernization.

A major industrial power customer therefore should not automatically be viewed as a burden.

The proper questions are:

What infrastructure would the customer require?

Who pays for it?

Can that investment improve Riverside’s overall electrical system?

Can Riverside negotiate dedicated generation or storage?

Can new transmission capacity benefit the broader community?

Can we contractually ensure residential and small-business ratepayers do not subsidize the development?

What happens to Riverside if the customer leaves?

Those are questions for utility engineers, financial analysts, cybersecurity professionals, economists and experienced negotiators.

They cannot be answered by the word BAN.

The Second Transmission Line Riverside Needs — But Is Building the Wrong Way

There is an enormous irony in debating whether Riverside should ban data centers because of their electrical demands while Riverside is already undertaking one of the most consequential electrical infrastructure projects in the City’s history.

The Riverside Transmission Reliability Project (RTRP) is intended to give Riverside something it unquestionably needs: a second connection to California’s electrical grid.

Today, Riverside Public Utilities says all of its imported electricity enters through a single Southern California Edison connection at the Vista Substation, with an import limitation of approximately 557 megawatts.

That is a genuine infrastructure vulnerability.

A growing city should not depend indefinitely upon a single connection to the statewide electrical grid.

So the debate shouldn’t be about whether Riverside needs greater transmission capacity.

We do.

The question is whether we are building the right infrastructure for the next 50 or 100 years.

A 21st-Century Grid Deserves a 21st-Century Solution

The RTRP will establish a new high-voltage connection through portions of Riverside, Jurupa Valley, Norco and unincorporated Riverside County. The project includes both underground and overhead transmission.

And therein lies the controversy.

Norco and its residents have fought for years to have the transmission facilities near their community and the Santa Ana River constructed underground. Norco has specifically raised concerns about putting high-voltage overhead infrastructure through an area it describes as wind-prone and fire-prone.

Those objections were not simply about aesthetics.

They were about wildfire exposure, evacuation difficulties, property impacts and the wisdom of constructing major new overhead electrical infrastructure in Southern California’s changing fire environment.

The California Public Utilities Commission rejected Norco’s effort to require the entire project to be undergrounded.

Then, in 2024, Riverside’s City Council elected to move the project forward.

And now construction is underway.

Look at What We Have Learned About Wildfire Risk

California’s recent fire seasons should have changed the way every elected official thinks about electrical infrastructure.

Extended dry conditions, extreme heat, Santa Ana winds and accumulated vegetation can turn a small ignition into a major emergency.

Riverside has another problem that makes this discussion particularly relevant: the Santa Ana River bottom.

For years, Riverside has struggled with fires, encampments, vegetation and emergency access in and around the river bottom.

Whatever one’s position on homelessness, the public-safety reality cannot simply be ignored: human activity within heavily vegetated open space creates additional ignition opportunities.

Combine dry vegetation, extreme weather, Santa Ana winds, difficult emergency access and high-voltage overhead infrastructure and it is reasonable to ask:

Why are we intentionally adding another potential vulnerability to the system we are supposedly building for resiliency?

That does not mean an overhead transmission line inevitably causes a wildfire.

It means infrastructure planning should account for the environment in which that infrastructure will operate for decades.

Norco Asked the Right Question

Norco has not argued that Riverside shouldn’t have its second electrical connection.

Its argument has essentially been:

Build it—but build it underground.

That distinction matters.

In fact, portions of the RTRP are already being constructed underground.

Recent reporting on the continuing Norco controversy indicates that approximately four of six miles in the relevant area will be underground while the Norco segment remains overhead.

So underground transmission isn’t some hypothetical technology.

It is already part of this project.

The disagreement is over how much should be underground and who should bear the additional cost.

And that brings us directly back to data centers.

What If Private Investment Changed the Economics?

Riverside’s argument against greater undergrounding has always had to confront the substantially greater upfront cost.

Fair enough.

Underground high-voltage transmission is expensive.

But instead of treating that as the end of the conversation, perhaps Riverside should start asking a different question:

Who else could help pay for it?

If Riverside attracts a major data center or other large industrial electrical customer requiring substantial new capacity, that company isn’t merely another building permit.

It represents potentially hundreds of millions—or even billions—of dollars of private capital and an enormous long-term electrical load.

That creates negotiating leverage.

Instead of banning that investment, Riverside should determine whether major new electrical customers can help finance the infrastructure required to accommodate their demand.

Imagine telling a prospective data-center developer:

You need Riverside’s power capacity. Riverside needs additional transmission capacity. If your project materially increases the infrastructure we must construct, you will participate in paying for it.

Then take the discussion one step further.

Could that private investment help finance additional undergrounding?

Could Riverside combine developer contributions with RPU capital, Southern California Edison investment and available state or federal infrastructure funding?

Could a large new industrial customer support additional generation and battery storage?

Could its investment accelerate replacement or undergrounding of other vulnerable electrical infrastructure?

Could Riverside obtain a substantially more resilient electrical system without placing the entire burden on existing residential and small-business ratepayers?

Those questions should be answered before Council bans the very industry that might give Riverside additional economic leverage to address them.

That’s What Economic Development Is Supposed to Do

This is the fundamental difference between economic development and government-sponsored venture capital.

When Riverside spends public money buying products from emerging companies in hopes that they eventually create jobs here, Riverside assumes part of the business risk.

When a private company invests hundreds of millions of its own dollars and helps finance the public infrastructure its project requires, the investor assumes the business risk.

Which model sounds better for Riverside taxpayers?

Our second transmission connection is infrastructure Riverside needs regardless.

The question is whether Riverside simply accepts the project as designed and asks ratepayers to absorb the consequences—or whether we use future economic development strategically to build something better.

Don’t subsidize the data center. Leverage it.

Require it to pay the incremental infrastructure costs its electrical demand creates.

Then determine whether that investment can help Riverside achieve something much larger:

A safer, more resilient, increasingly underground electrical transmission system designed for the next generation rather than another generation of overhead infrastructure.

Before Riverside hangs a “NO DATA CENTERS” sign at the city limits, perhaps Council should determine what private investment in the AI economy could buy Riverside in return.

Because the smartest economic-development deal may not be another taxpayer-funded purchase from the company we’re trying to recruit.

It may be convincing private industry to help pay for infrastructure Riverside residents already need.

Make the Developer Pay

Suppose a company proposes investing $1 billion in a Riverside data center.

Don’t write it a taxpayer check.

Don’t subsidize its electricity.

Don’t gamble General Fund reserves on whether the company succeeds.

Tell the company what Riverside requires.

If its project requires a new substation, negotiate the cost.

If additional transmission is necessary, negotiate the cost.

If generation or storage capacity is necessary, negotiate the cost.

If water consumption creates an unacceptable burden, require a different cooling technology or reject the project.

Require appropriate noise standards and setbacks.

Require local hiring and apprenticeship programs where legally permissible.

Require cybersecurity standards and supply-chain protections appropriate to critical infrastructure.

Require emergency-generation and fire-safety plans.

Require measurable community benefits.

And establish financial protections so Riverside isn’t left holding stranded infrastructure if a speculative operator disappears.

Negotiate from strength.

If the economics don’t work after those requirements are imposed, the developer can build somewhere else.

But Riverside should at least have the conversation.

Especially Because Riverside Has Been Willing to Take the Risk for Other Companies

Here is where the proposed ban becomes particularly difficult for me to reconcile with Riverside’s recent economic-development philosophy.

Riverside has repeatedly celebrated its transformation into a center for clean technology and advanced manufacturing.

The City itself has highlighted companies including Ohmio, Voltu, GreenPower, Hyundai Rotem and Stored Power Technology as evidence of this strategy. Riverside, California⁠

I support attracting innovative companies to Riverside.

What I have questioned repeatedly is who should bear the business risk.

Economic development should primarily mean convincing companies to invest their money in Riverside.

It shouldn’t mean turning Riverside taxpayers and ratepayers into venture capitalists.

And some recent Riverside deals deserve another look in that context.

Ohmio: Up to $2.5 Million, Seven Initial Jobs

In November 2023, Riverside finalized its agreement with autonomous electric-shuttle company Ohmio.

The City’s own announcement stated that Riverside would spend as much as $2.5 million on the arrangement, including approximately $1.5 million to lease or purchase three autonomous shuttles for a two-year pilot.

What was the initial direct employment projection?

Seven jobs.

The company expected that figure to increase to at least 25 jobs within three years. Riverside, California⁠

There was a legitimate economic argument behind the deal: Ohmio would establish its international headquarters and manufacturing operation here, Riverside would become its point of sale, and the City projected future sales-tax revenue.

Subsequent outside funding also materially improved the City’s position. Riverside Transit Agency contributed $500,000 and South Coast AQMD contributed $1 million, reducing what the City described as its initial $2.5 million cost to approximately $1 million. Riverside, California⁠

That’s important context.

But so is the original decision.

Riverside was willing to commit substantial public resources to an emerging company based largely upon anticipated future production, sales and economic benefits.

Apparently that type of risk is acceptable.

Voltu: Another $2.39 Million Purchase

Then came Voltu.

Council authorized the preorder and purchase of 20 Voltu electrified trucks for $2,392,500, including a $2,217,500 supplemental appropriation from General Fund Infrastructure Reserves. Councilmember Falcone himself voted for the purchase. Riverside Legistar⁠

There is encouraging news here.

Voltu subsequently moved into commercial deployment, and the City announced in June that the company expects its Riverside operation to create hundreds of jobs as production scales. Riverside, California⁠

I hope it succeeds spectacularly.

Riverside benefits if it does.

But future employment projections should still be distinguished from jobs already created, and public officials should be willing to measure actual results against the promises made when public money was committed.

That is accountability, not opposition to economic development.

Chaevi: Another $1.96 Million Purchase

Next came South Korean EV technology company Chaevi.

In November 2025, Riverside announced an MOU associated with Chaevi’s contemplated $100 million U.S. entry and expansion and potential establishment of its U.S. manufacturing headquarters in Riverside. The original MOU was expressly nonbinding and contemplated, among other things, at least 45 EV chargers. Riverside, California⁠

Then, in June 2026, the Council agenda called for waiving the formal procurement process and purchasing 45 Chaevi EV chargers for $1,957,500 from General Fund Infrastructure Reserve, with the amount to be reimbursed through Riverside Public Utilities Low Carbon Fuel Standard funds. Riverside Legistar⁠

Again, perhaps this investment ultimately produces an excellent return for Riverside.

I hope it does.

But notice the recurring philosophy:

Riverside is willing to deploy public resources to help create a market for selected emerging businesses.

Yet now, when discussing another technology industry capable of bringing enormous amounts of private capital into American infrastructure, the opening policy proposal isn’t:

How do we structure a deal that overwhelmingly benefits Riverside?

It’s:

Ban it.

Riverside Should Stop Playing Angel Investor

This is the larger issue.

There is a fundamental difference between economic development and municipal venture capital.

Economic development says:

Come invest in Riverside. Build here. Employ people here. Purchase property here. Pay taxes here. Partner with our universities. Use our local workforce. Help build infrastructure. Become part of our community.

Municipal venture capital says:

Come to Riverside and perhaps we’ll help create your market by purchasing your product with public money.

Those are very different models.

Riverside should be extremely cautious about the second.

Government is not particularly well equipped to identify which emerging technology company will become the next Tesla and which will become an expensive lesson.

Private investors knowingly assume those risks because enormous returns compensate them when they’re right.

Taxpayers get no equity.

Ratepayers don’t receive stock options.

Residents don’t participate in the upside when a startup becomes worth billions.

They simply carry the downside if public money was poorly deployed.

Riverside should stop behaving like an angel investor and start behaving like an economically sophisticated city.

What Riverside Should Do Instead of a Ban

Rather than drafting a prohibition, Councilmember Falcone and the rest of the Council should consider developing a Riverside Data Center Development Standard.

Make it one of the most demanding in California if necessary.

A serious policy could address:

• No residential-ratepayer subsidy. Data centers should bear the incremental utility and infrastructure costs attributable to their projects.
• Power-capacity requirements. Projects should demonstrate adequate generation, transmission and distribution capacity before approval.
• Infrastructure contributions. Where projects trigger substations, transmission upgrades, storage or other major improvements, negotiate developer participation.
• Water standards. Require disclosure of projected water consumption and favor technologies that minimize potable-water demand.
• Minimum capital investment. Reserve data-center development for projects producing meaningful economic value.
• Employment and workforce development. Evaluate permanent jobs as well as construction employment, apprenticeships and partnerships with UCR, RCC and other local institutions.
• Cybersecurity and supply-chain security. Critical digital infrastructure deserves serious physical, cyber and foreign-supply-chain protections.
• Noise, aesthetics and setbacks. Protect nearby neighborhoods.
• Emergency power and fire protection. Require appropriate standards for batteries, generators and other energy systems.
• Decommissioning protection. Ensure taxpayers aren’t responsible for abandoned facilities or stranded infrastructure.
• Community-benefit requirements. Negotiate measurable benefits rather than accepting press releases and projections.
• Periodic public reporting. Compare promised jobs, investment, utility revenue and community benefits against actual performance.
  

And perhaps most importantly:

No taxpayer-funded angel investing should be required to make the project work.

Imagine the Alternative

Imagine Riverside receives a proposal for a major AI data center.

The developer wants to invest hundreds of millions of dollars of private capital.

Riverside responds:

You will pay the infrastructure costs attributable to your project.

You will not increase residential rates.

You will help finance the electrical capacity necessary to serve your facility.

You will meet strict water-consumption requirements.

You will comply with rigorous cybersecurity and supply-chain requirements.

You will invest in local workforce development.

You will disclose measurable economic benefits.

You will protect surrounding neighborhoods.

And if you cannot satisfy those requirements, you cannot build here.

What’s wrong with that?

That isn’t being anti-environment.

It isn’t being pro-development at any cost.

It isn’t corporate welfare.

It is precisely what local government is supposed to do:

Protect the public interest while creating economic opportunity.

Riverside Cannot Call Itself the “City of Arts & Innovation” and Ban Innovation’s Infrastructure

There is also an unavoidable contradiction here.

Riverside proudly brands itself the City of Arts & Innovation.

City officials travel internationally seeking foreign investment.

The City touts advanced manufacturing.

It celebrates autonomous vehicles.

It recruits electric-truck manufacturers.

It courts EV-infrastructure companies.

It promotes smart-city technologies.

It even describes its economic strategy as positioning Riverside in industries of the future. Riverside, California⁠

But artificial intelligence may be the most consequential technological and industrial transformation of this generation.

And AI requires data centers.

We cannot put INNOVATION on the City seal while putting NOT WELCOME on the infrastructure required to support the next generation of computing.

And Yes, This Is a National-Security Issue

There is another dimension Riverside shouldn’t casually dismiss.

AI capability is increasingly intertwined with national security.

The federal AI Action Plan specifically addresses secure AI compute environments for defense and intelligence purposes and calls for technical standards for high-security AI data centers capable of resisting sophisticated nation-state threats. The White House⁠

Cybersecurity professionals have understood this trajectory for years.

Future conflicts will not occur exclusively with tanks, ships and aircraft.

They will involve cyber operations, autonomous systems, intelligence analysis, communications networks, electronic warfare, logistics, satellites and artificial intelligence.

Compute is becoming strategic infrastructure.

America therefore needs abundant, resilient and secure domestic computing capacity.

Does that mean Riverside has some patriotic obligation to approve a 500-megawatt data center?

Of course not.

It means that categorically banning an entire class of strategic digital infrastructure deserves considerably more thought than a Facebook announcement.

The Right Answer Is Neither “Yes” Nor “No”

The answer should be:

Show us the proposal.

Show us how much power you need.

Show us where that power comes from.

Show us your water consumption.

Show us your cooling technology.

Show us your infrastructure requirements.

Show us the construction jobs.

Show us the permanent jobs.

Show us the tax and utility revenue.

Show us what you will invest.

Show us how Riverside residents benefit.

Show us the cybersecurity plan.

Show us what happens if the facility closes.

And most importantly:

Show us why Riverside should want you here.

Then negotiate.

If the proposal isn’t good enough, say no.

If it threatens grid reliability, say no.

If it requires residents to subsidize a multinational corporation, say no.

If the water demands are unreasonable, say no.

If the economic return doesn’t justify the land and infrastructure, say no.

Reject a bad project.

But don’t reject an entire industry before the first serious proposal has even been evaluated.

Riverside Needs an Economic Strategy, Not Another Knee-Jerk Policy

This Council has an opportunity to demonstrate something Riverside desperately needs:

Long-term thinking.

Instead of another sweeping reaction, commission the analysis.

Ask Riverside Public Utilities what amount of data-center load can responsibly be accommodated today.

Determine what new generation and transmission would be required at different levels of development.

Calculate the ratepayer implications.

Study the economic impact.

Establish land-use standards.

Consult UCR and our other educational institutions about AI, engineering and workforce opportunities.

Bring cybersecurity and critical-infrastructure experts into the discussion.

Invite competing data-center developers to explain what they would invest under Riverside’s conditions.

And conduct all of it publicly.

Then write the policy.

That is leadership.

Riverside’s Next Big Economic Development Idea Shouldn’t Be Banning Economic Development

America is spending enormous amounts of private capital building the infrastructure for the AI economy.

China is competing aggressively for leadership in the same technologies.

Riverside says it wants innovation, advanced manufacturing, international investment and high-quality jobs.

Yet apparently our next great economic-development idea may be to prohibit one of the fundamental infrastructure components supporting that economy.

That makes no sense.

Especially when Riverside has shown itself willing to put public resources behind comparatively small emerging companies in pursuit of projected future benefits.

Let’s reverse that philosophy.

Stop asking Riverside taxpayers and ratepayers to behave like angel investors.

Invite private capital to take the business risk.

Set demanding standards.

Protect our neighborhoods.

Protect our water.

Protect our electrical system.

Protect our ratepayers.

Demand infrastructure.

Demand jobs.

Demand measurable economic benefits.

Demand accountability.

And negotiate from a position of strength.

If a company cannot meet Riverside’s standards, send it away.

But if a company is prepared to invest hundreds of millions—or potentially billions—of private dollars, pay its own infrastructure costs, strengthen our electrical system, create jobs and contribute meaningfully to Riverside’s economy, we should at least be intelligent enough to hear the proposal.

Regulate intelligently. Negotiate aggressively. Protect the public.

But don’t put a “Closed for Business” sign at the city limits and pretend that’s economic development.

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Sources and Further Reading

America’s AI Action Plan — White House⁠

City of Riverside — Ohmio Agreement⁠

City of Riverside — Ohmio/RTA Pilot Agreement⁠

City of Riverside — Chaevi U.S. Expansion Agreement⁠

City of Riverside — Voltu Commercial Deployment⁠

City of Riverside — 2050 Economic Development Vision⁠

Author’s note: Dollar figures and employment projections above are taken from City of Riverside announcements, financial reports and Council records. Projected jobs, investment and tax revenues are identified as projections rather than represented as completed results.