If an artificial intelligence data center wants to come to the city of El Paso, the policies are now clear: No more tax breaks or subsidies, and much more public oversight over any potential data center developments going forward.
The El Paso City Council on Monday unanimously approved a so-called data center policy framework, which doesn’t ban data centers in the city but will make it more difficult for developers to build one in the city limits.
The new rules require a minimum distance of at least 300 feet between data centers and residential neighborhoods or ecological sites, require noise mitigation and also require data centers obtain a new kind of special permit. The permit would require a public vote by the City Council and far more oversight than the 2023 tax break agreement that enabled Meta to start building a data center in Northeast El Paso.
For example, a data center previously could secure a “by right” permit. That allows a developer to quickly secure a permit to build in certain areas as long as the area is zoned for industrial or manufacturing uses. The new special permit requires City Council approval before the city issues the permit to a developer.
The previous agreement with Meta that city council approved in late 2023 was a tax break agreement. Now, council will have a chance to weigh in earlier in the process during the permitting phase.
Mayor Renard Johnson, who was not in office during the 2023 deal, said the new set of policies designed to manage data center developments “shifts power to the council now.”
“Before, we didn’t have any power,” Johnson said, referring to no such policies being in place previously. “But this at least gives us some power to work and do the job we need to do as city council.”
El Paso Matters first reported in May on the policies council voted to approve Monday.
The policies adopted by council include:
- Require AI data centers to obtain a special use permit rather than the “by right” permit now required. The special permit will require public disclosure and direct City Council oversight, as well as standards around distance from residential housing.
- Require data center developers to submit detailed plans covering their facility’s projected water and energy use, emissions, noise and water treatment. It also would establish performance standards and mandate developers use the most efficient cooling technologies to limit water consumption.
- Pause on any tax incentives for AI data centers and instead prioritize community benefit agreements that require legally binding commitments from developers to fund certain community projects, workforce education or neighborhood programs.
- Seek greater oversight and transparency of data centers’ water and energy usage and ensure costs aren’t shifted to existing utility ratepayers.
- In addition to a required 300-foot buffer between the data center property live and almost any other development, the data center must be set back 100 feet from the property line, maintain a 30-foot landscaping buffer and enclose any noisy equipment.
City staffers said the framework is a “living document” that will change over time as the state of Texas or the federal government potentially impose new laws on data centers.
The policy the city published – which echoes the backlash and public discontent with data centers – argues the facilities will have negative environmental effects such as increased air pollution that run counter to the climate action plan the city adopted earlier this year.
El Paso Electric is building a power plant next to Meta’s data center that will be dedicated entirely to provide electricity to the data center campus for the next few years. The utility has declined to disclose to El Paso Matters the estimated greenhouse gas emissions that Meta’s power plant will produce.
“Hyperscale data centers like the one Meta is constructing in the Northeast, Project Jupiter in Dona Ana County, and the recently announced project at Ft. Bliss, are projected to materially increase GHG emissions, co-pollutants, and impact overall air quality,” reads the policy document. Greenhouse gas emissions such as carbon dioxide or methane contribute to climate change. Pollutants such as particulate matter and carbon monoxide don’t contribute to climate change but cause human health problems when people breathe them in.
The city estimated electricity generation to power data centers would increase the city’s carbon dioxide emissions by 21% compared with a 2019 baseline.
The data center policies will only apply to future facilities built within the city limits. They would not apply to Meta’s $10 billion data center that’s under construction..
The rules also will not apply to data centers built within El Paso County but outside the city limits. And the policies will not apply to the huge data center proposed on federal Fort Bliss property that the private equity firm Carlyle Group is seeking to develop in partnership with the U.S. Army.
Since unveiling the project in April, Army officials have shared virtually zero information about the data center, which would consume roughly three times as much electricity as Meta’s facility to be supplied from natural gas turbines. The Army has said it aims to bring the data center into operation by the end of next year.
READ MORE: Proposed Fort Bliss data center could use more power than all of El Paso
The city’s newly-adopted policies also won’t apply to the data center being built in neighboring Doña Ana County in New Mexico – where the Project Jupiter campus is under construction.
In a separate presentation to City Council earlier this month, El Paso Water CEO John Balliew suggested there’s a data center under consideration for development in Fabens in the far southeast region of El Paso County, although no public details of that project are readily available. That area is served by the Lower Valley Water District rather than El Paso Water, though LVWD sources all of its supply through a contract with El Paso Water.
“There seems to be one coming up perhaps in the Fabens area,” Balliew told the City Council on July 6. He added that he’s met with Fort Bliss leadership multiple times and isn’t concerned about the water consumption of a big data center on the installation. The Army has said the Fort Bliss data center will be “water neutral” without offering details.
“We don’t have any particular concerns about any of the other data centers,” Balliew said.
Still, the policy document council approved reflected public opposition that was clear during community meetings held earlier this year and in surveys the city conducted.
The Chapter 380 economic development between the city and Meta granted an 80% break on city and county taxes for decades, and the city also gave the company $12.5 million to pay for road repairs around the 1,000-acre data center site.
“The public sentiment is overwhelmingly critical of leadership, characterized by deep-seated distrust, fear of resource depletion, and frustration over the lack of transparency regarding data center development behind closed doors,” a draft version of the city’s policy memo read.
The post El Paso adopts tougher rules for future data center developments appeared first on El Paso Matters.
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