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The City of Denver could put proposals for any new data centers on hold while officials “review and strengthen regulations” for current sites before approving any future centers.
An essential piece of infrastructure to store and process the data needed to power cloud software, artificial intelligence tools and other server-based technology, data centers have become a necessary part of commerce, communication and health care. However, data centers also consume a lot of resources, so some city leaders want to issue a moratorium.
According to the Pew Research Center, one AI-focused hyperscale data center consumes enough energy to power 100,000 households. In communities sharing a power source with data centers, electricity costs have increased by up to 267 percent over a five-year span, a Bloomberg News analysis shows. Data center cooling systems also require a large amount of water, consuming tens of billions of gallons nationwide each year.
Colorado is one of fourteen states without tax incentives for data centers, but some state lawmakers are pushing bipartisan legislation to create such incentives. According to the Data Center Map, a nineteen-year-old tracking tool, 47 of Colorado’s 57 data centers are in the Denver area. As consumer demand and legislative priorities on both sides of the aisle tilt toward encouraging construction of data centers, Denver Mayor Mike Johnston wants Denver regulations to catch up.
“Data centers power the technology we depend upon and strengthen our economy,” Johnston says in a statement issued February 23. “But as this industry evolves, so must our policies. This pause allows us to put clear and consistent guardrails in place while protecting our most precious resources and preserving our quality of life. Denver is pro-business and pro-climate, and I’m proud to partner with City Council in keeping Denver one of the top tech sectors in the country and doing so in a way that is responsible to our residents and the industries who wish to invest here.”
According to the mayor’s office, city council expects to consider a moratorium on data centers soon. If approved, the city will conduct a review of possible regulations specific to data centers. This could include “responsible land, energy and water use as well as zoning and affordability for ratepayers,” according to the mayor’s office. The process is expected to last “several months,” and would include feedback from “members of the community, climate experts and industry leaders.”
Johnston has at least two councilmembers — Paul Kashmann and Darrell Watson — supporting the measure, but, as a statement from Kashmann suggests, the proposal probably won’t receive unanimous support.
“Data centers bring with them a unique series of environmental challenges and neighborhood impacts,” the south Denver council representative says. “My office has been looking into this topic in depth in recent months. I believe the complexity of the issues involved merits our city taking a pause to give them adequate consideration. While there remains distance between the Mayor’s view and mine — as well as some other council colleagues — I look forward to working with the administration, the community at large and industry voices to see if regulations — as have been instituted in sister cities around the country — will or will not make additional data center development possible in the City and County of Denver.”
Councilmember Stacie Gilmore, who represents northeast Denver, also recently came out against data centers, arguing that they should not be regulated, but banned entirely.
“In the City and County of Denver, we should ban data centers. We need to ban them,” she said during a town hall last week. “They’re horrible for the environment. When people live near wells, their well water turns brown.”
According to State Representative Jennifer Bacon, a Denver lawmaker who was also at the town hall, there are two bills in the Colorado Legislature that intend to further regulate data centers in Colorado, as well.
CoreSite, a national company that builds and operates data centers, is planning to build a three-story, 590,000-square-foot data center in northeast Denver. According to opponents of the project, the data center would use enough energy to power around 100,000 homes per day and enough water for about 19,000.
Data centers that are under construction or permitted for construction are not subject to the moratorium, according to the mayor’s office, but they “may be expected to follow new guidelines once announced.”
