Colorado local governments move to restrict data center development
Local governments in Colorado, including Denver, Jefferson County, and Longmont, have enacted moratoriums or restrictions on new data center developments. This action stems from public backlash over rising electricity prices and environmental concerns, following the state legislature's failure to pass relevant regulation. Major projects by CoreSite in Denver are impacted, while large-scale data centers in neighboring states like Oracle's Project Jupiter in New Mexico highlight the intense demand for power and environmental considerations.
Amid an increase in AI demand, Colorado local governments are implementing measures to restrict data center development. Denver, Jefferson County, and Longmont have recently enacted moratoriums or capped power usage for new data centers, responding to public concerns about rising electricity prices, pollution, and tax breaks. These local actions follow the Colorado state legislature's failure to pass data center regulation during its 2026 session, postponing a statewide decision until at least 2027.
In Denver, the City Council voted for a one-year moratorium on new data center approvals, influenced by community opposition to a CoreSite three-phase data center project in the Globeville-Elyria-Swansea neighborhood, which is expected to draw 65-75 megawatts (MW) of electricity. Jefferson County commissioners also halted new zoning and development approvals for data centers not already underway. Longmont capped new data center proposals at 100 MW to deter hyperscale projects. Howard Geller, founder of the Southwest Energy Efficiency Project, noted that Colorado lacks the significant tax incentives offered by over 30 other states, making it less attractive for the largest data center developers, who often seek subsidies.
Two competing bills in the 2026 state legislative session, one proposing tax breaks with insufficient environmental safeguards and another mandating renewable power and consumer protection from rate hikes, both failed due to intensive lobbying. Environmental groups plan to renew legislative efforts in 2027. The Data Center Coalition, a trade group, has criticized these local bans, arguing they send a negative signal for economic development and force investment into other states.
Neighboring states like New Mexico and Utah are experiencing massive data center projects that dwarf those in Colorado. Oracle's "Project Jupiter" near Las Cruces, New Mexico, proposes a self-contained power plant using methane-driven fuel cells to generate 2,500 MW, emitting 10 million tons of carbon dioxide annually, which environmental groups warn could negate New Mexico's greenhouse gas emission progress. Similarly, Kevin O'Leary's project near Utah's Great Salt Lake plans for up to 9 GW of natural gas-powered electricity, potentially increasing Utah's carbon dioxide output by 55%.