Colorado communities split on data center boom
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Colorado communities are taking dramatically different approaches to the boom in data center development, with a patchwork of moratoriums, incentives and new restrictions.
Why it matters: The local experimentation is filling a vacuum left by state lawmakers, who failed last legislative session to agree on how Colorado should regulate the resource-hungry facilities.
State of play: The fragmentation sets up another potential fight at the Colorado State Capitol next year over how to capture the upside of data center development without saddling communities with their enormous electricity, water and infrastructure demands.
Driving the news: Denver — which already has 50 data centers — has halted new development until May 21, 2027, as it writes new rules.
- City leaders announced Tuesday they will recruit members starting Friday for a working group representing utilities, labor, industry, advocacy groups and residents to recommend policies governing future development.
- The group will meet through next spring, with recommendations expected by May before the moratorium expires and City Council takes up a policy package next summer.
Elsewhere, communities are charting their own course:
- Aurora rejected a moratorium this month but is developing stricter operating standards.
- Colorado Springs could approve its first data center next month. But new guardrails issued last Friday require developers to cover infrastructure costs, conserve water and mitigate noise.
- Douglas County this month approved a $19 million tax rebate for a data center under construction in Parker.
- Weld County, meanwhile, has repeatedly issued stop-work orders against Global AI over unauthorized construction at a proposed data center near Windsor that could become the state's largest, CPR reports.
The big picture: The fight is increasingly about who bears the costs of the AI infrastructure boom.
- Data centers can bring investment and tax revenue, but their vast energy needs can require expensive grid upgrades, and cooling systems can consume significant amounts of water.
- Limited transparency around individual projects has also fueled public distrust.
What we're watching: Whether Colorado's growing patchwork of local rules forces lawmakers to take another run at statewide regulation next year.
- Democratic gubernatorial nominee Phil Weiser, heavily favored in November, opposes a statewide ban.
- But he backs greater transparency around data centers' water and energy use, protections for utility customers and requirements that developers help bring new clean energy onto the grid — offering a potential framework for the next statewide debate.