To: Board of County Commissioners
Through: Michelle Halstead, Director, Commissioners’ Office; Ceila Rethamel, Acting Director, Public Works & Development
Prepared By:
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Nico Johnson, Management Analyst, Commissioners’ Office
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presenter
Presenter: Nico Johnson, Management Analyst, Commissioners’ Office; Raye Fields, Planner, Public Works & Development
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Subject:
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2:00 PM *Data Center Overview & Regulatory Environment
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Purpose and Request:
recommended action
The purpose of this study session is to provide the Board with foundational information about the data center industry in advance of the Sept. 25 data center tour.
Staff will provide an overview of the different types of data centers, their infrastructure and operational needs, the regulatory approaches being considered by communities in Colorado and elsewhere, and the current data center landscape in and around Arapahoe County.
The discussion is intended to help Commissioners consider data centers more holistically, introduce the major policy considerations associated with future data center development, and identify issues to observe during the tour. Staff is not seeking policy direction at this meeting. Following the tour, staff will return to the Board on Oct. 6 for a more focused discussion of County authority, regulatory options, and potential policy considerations.
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Alignment with Strategic Plan: Sustainable Growth and Infrastructure - Support environmentally responsible development and energy efficiency in county operations.
Background and Discussion: Data centers are secure facilities that house computer systems and associated components to process, store, manage, and transmit digital information. As the digitization of information has increased since the 1960s, so has the need for new and more powerful ways to process, store, manage, and transmit such information.
Data centers are becoming an increasingly important part of Colorado’s economy and infrastructure. Growing demand for cloud computing, artificial intelligence, digital services, and data storage is driving new development nationally and across the Front Range.
At the same time, data centers can vary significantly in size, function and infrastructure needs. Some are relatively small facilities serving a single business or institution, while hyperscale facilities may include multiple large buildings and require substantial electrical capacity, cooling infrastructure and network connections.
These differences are important as communities consider how data centers fit within existing land-use regulations and infrastructure systems.
Data Center Types
Common types of data centers include:
• Enterprise data centers, which primarily support the operations of a single organization.
• Colocation data centers, where multiple customers lease space and share power, cooling, security and network infrastructure.
• Hyperscale data centers, which are large facilities or campuses designed to support extensive cloud computing, artificial intelligence, data storage and other large-scale digital services.
• Edge or micro data centers, which are smaller facilities located closer to users, devices or systems to support faster processing and connectivity.
The type and scale of a facility can significantly affect its demand for electricity and water, building footprint, infrastructure requirements, and potential impacts on surrounding properties.
Key Policy Considerations
As the County considers how future data center proposals might be reviewed, Commissioners may ultimately need to consider several interconnected policy areas:
• Electricity and grid capacity
• Water demand and cooling technology
• Land use and community compatibility
• Noise, backup generation and other operational impacts
• Wildlife and natural-resource effects
• Economic and fiscal impacts
• Transparency, accountability, and full-buildout commitments.
The significance of these issues varies by the type, size, location and design of a facility. The Sept. 25 tour is intended to help Commissioners see how these considerations show up in actual facilities before the Board begins a more detailed policy discussion.
Current Regulatory Environment
Local governments across the country are taking a variety of approaches to data center development. Some continue to regulate data centers through existing commercial or industrial land-use categories, while others have adopted data-center-specific standards, established additional review requirements or temporarily paused applications while regulations are developed. Still others have instituted moratoriums while they determine how to regulate data centers.
Colorado communities are taking similarly varied approaches. Weld County recently adopted data-center-specific regulations addressing the types of facilities allowed, where they may be located, and the review process and standards that apply.
Existing data centers within incorporated Arapahoe County are located in Aurora, Centennial and Greenwood Village and have generally been regulated through existing industrial, commercial or office land-use categories. Arapahoe County’s Land Development Code does not contain “data centers” as a permitted use, or otherwise, that would allow for their establishment in the unincorporated County at this time.
Key regulatory considerations include:
• Electricity and the power grid. Electricity is often the most significant infrastructure consideration associated with a large data center. Servers must operate continuously, and the cooling and support systems also require power. The amount of required generation resources varies depending on the size and type of data center.
• Water and cooling. Data centers generate substantial heat and must be cooled to protect their equipment. The amount of water used varies greatly depending on the cooling technology, local climate, facility design and time of year. A system that uses less water may require more electricity, creating a potential tradeoff between water and energy use. This item would need to be coordinated with the water providers in the form of will-serve letters.
• Air quality and backup generation. Data centers typically use backup generators to maintain operations during power interruptions. These generators may be powered by diesel fuel, natural gas or other energy sources. Routine testing and operation during outages can produce air emissions and noise. Arapahoe County does not regulate air quality and would defer to the State of Colorado requirements for air quality and generator permitting.
• Land use and community compatibility. Data centers can occupy large buildings or campuses, often within business/industrial zone districts or previously undeveloped land. While they may generate less daily traffic than offices, warehouses or retail developments, their size and infrastructure can still affect surrounding properties.
• Wildlife and natural resources. The environmental effects depend heavily on where a data center is built. Development on previously disturbed or industrial land may have fewer effects than construction in an undeveloped area.
• Noise, appearance and quality of life. Data centers generally create less ongoing vehicle traffic than many commercial or industrial uses. However, cooling equipment, electrical equipment and backup generators can operate around the clock. Large buildings, security fencing, utility structures and transmission lines may also change the appearance of an area.
• Economic and fiscal effects. Data centers can bring substantial private investment and may generate local and state tax revenue. Construction can support jobs in building trades, engineering and related industries. Permanent staffing levels may be lower than those of other developments with a similar building size or property value.
Colorado’s Current Market Landscape
There are at least 57 data centers currently operating or under construction in Colorado. Of the 45 in the Denver Metro Area, there are 15 within incorporated Arapahoe County and 12 just south of County Line Road in Douglas County. According to a recent Colorado Municipal League conference presentation, these facilities represent an estimated 1.5 - 2.5 million square feet of space and an estimated 150 - 300 MW of installed power capacity. More information is available at datacentermap.com.
Preparing for the Data Center Tour
Commissioners will tour several data center facilities on Sept. 25 and view additional facilities through drive-bys. The tour will provide a first-hand look at the scale, infrastructure, and operations associated with different types of data centers.
Notable features include:
• Building scale, site layout and proximity to surrounding uses
• Electrical and utility infrastructure
• Cooling systems, water demand and water source
• Backup generation and noise
• Screening, security and lighting
• Traffic and site access
• Staffing and day-to-day operations
• Future expansion and full-buildout potential
Observations from the tour will help inform future discussion about whether the County’s existing framework adequately addresses future data center proposals and what, if any, additional policy or regulatory approaches the Board may want to explore.
Alternatives: N/A
Fiscal Impact: N/A
Alignment with Strategic Implementation Strategies: N/A
Staff Recommendation: N/A
Concurrence: N/A