City of El Paso
This restriction takes precedence while in effect. The rating below excludes temporary restrictions.
Pro-Data Center Policies
El Paso limits hyperscale centers to certain zones with permit and planning hurdles; qualifying data centers may access discounted electricity rates, generally for up to five years.
current law · City of El PasoThis City Council agenda item concerns El Paso Electric Company’s application for an economic-development electric rate for a new data center located in El Paso.El Paso City Council File 25-363 — El Paso Electric Company Economic Development Rate for a New Data Center
What this means
The measure creates special electricity rates for qualifying data centers, which can make operating a facility less costly; the approved schedules cover medium- and large-demand data centers. Access is conditional: data centers generally must receive local economic incentives, and service under these rates is limited to five years unless extended, so this is a substantial but qualified benefit.
People behind it
- El Paso Electric Company
Applicant and proposer of the Economic Development Rate Rider and Rate Schedules 33A and 33B for the new data center.
- Public Utility Commission of Texas
Regulatory authority that reviewed and approved the proposed rate schedules and administered the proceeding.
Restrictions & requirementsHide restrictions & requirements16
Eligibility is limited to customers qualifying under El Paso Electric’s Economic Development Rate Rider, including a minimum monthly billing demand of 500 kW. A new customer also must not have received El Paso Electric service in Texas or New Mexico during the preceding 12 consecutive months.
A data center that does not qualify under the Load Retention Provision must qualify for and receive governmental economic incentives under Texas Local Government Code Chapter 380 or 381, and must provide notarized affidavits and governmental documentation confirming and annually continuing those incentives.
The customer must provide a notarized affidavit confirming that availability of the economic-development rate was an important contributing factor in the decision to add the load; El Paso Electric may verify the affidavit.
The rate is unavailable to a customer with another on-site power source that can substitute for El Paso Electric service, unless that source is maintained solely for use during service interruptions.
Service under the data-center rates is limited to three-phase transmission-voltage service, delivered at company-designated delivery points and measured by the meters or other measuring devices required by El Paso Electric.
Service under either data-center rate may not exceed five years from service initiation unless El Paso Electric extends it and the appropriate regulatory authority approves the extension.
Schedule 33A is limited to data centers whose highest measured demand exceeds 50,000 kW and that are ineligible for Schedule 33B.
Schedule 33B is limited to data centers whose highest measured demand exceeds 600 kW but does not exceed 50,000 kW in any two consecutive months. This qualification test does not apply during commissioning, but only for up to two years after service begins under Schedule 33B.
A Schedule 33A customer must be moved to Schedule 33B if its highest measured 30-minute average load remains below 50,000 kW during the current month and the preceding 11 consecutive months; it may return to Schedule 33A only after exceeding 50,000 kW in a subsequent month.
Billing demand is subject to minimum and ratchet requirements: Schedule 33A uses the highest of 50,000 kW, adjusted maximum demand, or 80% of the highest summer demand in the preceding 12 months; Schedule 33B uses the highest of 600 kW, adjusted maximum demand, or the same 80% summer-demand ratchet. The Schedule 33B ratchet is suspended during commissioning for up to two years.
A power-factor adjustment increases the applicable demand charge when the power factor at maximum demand is below 90% lagging.
Meter-voltage adjustments can increase billed demand by 1.3% and billed energy by 2.2% when service is delivered on the high-voltage side of a customer-supplied transformer but metered on its low-voltage side.
The rates impose fixed and usage-based charges, including a $500 monthly customer charge, demand charges, energy charges, and applicable fuel-factor, facilities, rider, tax, and other charges. Customers using the displaced-load option also pay a $231.25 monthly green-tariff administration and billing charge and a renewable-energy transmission charge of $0.00848 per kWh.
The monthly minimum charge includes the customer charge, applicable demand charge, other non-consumption fixed-amount riders, facilities charges, and tax adjustment, so charges can apply even apart from actual energy consumption.
Displaced-load customers must calculate billing demand and energy using 15-minute interval site load net of renewable power, with no negative billing determinants, and must pay the renewable-energy transmission charge on renewable energy netted against site energy.
All service under the data-center rates remains subject to El Paso Electric’s fixed fuel factor and other applicable riders, which can apply to demand determinants, net energy, or associated billed revenue.
Benefits & exceptionsHide benefits & exceptions11
Eligible data centers may receive service under El Paso Electric’s Economic Development Rate Rider, including negotiated rates for new or additional load, provided the rates are at least the company’s estimated incremental cost.
Data centers are exempt from the rider’s general employment requirement requiring two full-time employees per 100 kW of new or additional load. Instead, they must qualify for and receive governmental economic incentives under Chapters 380 or 381 of the Texas Local Government Code, with required affidavits and documentation.
A new data-center customer is eligible for the Economic Development Rate Rider without a prior 12-month service history with El Paso Electric, subject to the rider’s other requirements and a minimum monthly billing demand of 500 kW.
The approved large and medium economic-development rate schedules provide discounted demand charges and energy charges compared with the applicable standard service rates, with separate rates for large customers above 50,000 kW and medium customers above 600 kW but not exceeding 50,000 kW.
Service under the approved data-center rate schedules may continue for up to five years from service initiation, unless extended by El Paso Electric and approved by the appropriate regulatory authority.
During data-center commissioning under the medium rate schedule, the usual demand-qualification criteria and demand-ratchet provision do not apply for up to two years from service initiation.
The medium rate schedule permits customers to qualify with demand above 600 kW while excluding customers whose demand exceeds 50,000 kW in any two consecutive months, allowing medium-sized facilities to operate below the large-customer threshold.
The approved rate schedules allow data centers to elect Displaced Load Service through the Green Energy Plus virtual-load-netting option, using site load net of qualifying metered renewable power on 15-minute intervals, with net billing determinants not falling below zero.
For customers using Displaced Load Service, the schedules provide separate demand charges and a renewable-energy transmission charge, allowing renewable power to offset metered site energy and demand under the tariff’s netting rules.
El Paso Electric will construct and own a new substation adjacent to the data-center facility, interconnecting it with the company’s transmission system and supplying the facility at transmission voltage.
The approved rate schedules use transmission-voltage, three-phase service, with metering and delivery points designated by El Paso Electric, supporting the high-load requirements of the data center.
Sources
current law · City of El PasoThis zoning provision defines a hyperscale data processing center and its associated facilities, including cooling systems, generators, substations, telecommunications equipment, fuel storage, and support uses.El Paso City Code § 20.02.288.1 — Data processing center (hyperscale)
What this means
The measure would limit hyperscale data centers to certain zoning districts and require special permits and environmental plans, adding meaningful hurdles to building and operating them. These requirements apply to hyperscale centers within the city, and some details remain undecided.
Timing
- Ends
- until the policies identified in this Framework have been developed, approved, and adopted by the City Council
The moratorium is limited to public land sales for hyperscale data center use. Other provisions remain.
People behind it
- City Council of the City of El Paso
Directed development of the Data Center Policy Framework, approved related legislative-agenda amendments, adopted the zoning ordinances, and holds final authority over specified zoning and development actions.
- Climate, Sustainability & Energy Division of the Strategic & Legislative Affairs Department
Coordinated development of the Data Center Policy Framework and conducted community engagement and feedback.
- City of El Paso Planning and Inspections Department
Collaborated on developing the Data Center Policy Framework and community engagement concerning zoning, land use, and development policies, and participates in administering and enforcing the zoning ordinance.
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- City Plan Commission
Makes recommendations on zoning amendments, plans, development permits, and special permits and exercises ordinance-assigned approval authority.
- Zoning Board of Adjustment
Hears and decides appeals, variances, and special exceptions under the zoning ordinance.
- Fire Department
Administers fire-protection aspects of the zoning ordinance.
- Environmental Services Department
Participates in administering environmental aspects of the zoning ordinance.
- Streets and Maintenance Department
Participates in administering matters assigned under the zoning ordinance.
- Department of Public Health
Administers animal-regulation and public-health aspects of the zoning ordinance.
- City Manager's Office
Administers the historic preservation program.
- Historic Landmark Commission
Reviews and decides applications concerning historic properties and makes recommendations on historic-landmark designations.
- Planning Division
Administers specified billboard and comprehensive sign-plan provisions.
- Development Services Department
Administers specified changeable electronic variable message sign requirements and enforcement.
- City Council
Introduced and took action on the measure directing development of a plan to uplift LGBTQIA+ voices and the community.
- City Manager
Was directed to develop the LGBTQIA+ plan and implement its recommendations.
- City Attorney
Was directed to develop the LGBTQIA+ plan with the City Manager.
Restrictions & requirementsHide restrictions & requirements22
Ordinary data-processing centers are allowed only in A-3/O, A-M, C-1 through C-5, and M-1 through M-3 zoning districts; hyperscale data centers are allowed only in C-4, M-1, and M-2 districts.
New or unlisted data centers require a use classification, which may require City Plan Commission review and a City Council-approved ordinance if the use is not sufficiently similar to an existing listed use.
Construction, alteration, expansion, or conversion of a data center requires a building permit complying with applicable City Code requirements.
A certificate of occupancy is required before vacant land or a completed data-center facility may be occupied or used, except for limited temporary or agricultural uses.
Data centers must meet and maintain performance standards governing noise, vibration, odors, air pollution, liquid-waste discharges, electrical interference, fire and explosion hazards, glare, and lighting.
New or expanded data centers must satisfy off-street parking requirements, including standards for location, dimensions, surfacing, access, drainage, lighting, landscaping, and screening, unless an applicable exception or approved reduction applies.
Required loading berths or truck-trailer loading or parking must be located on the same parcel and meet specified dimensions, maneuvering areas, and clearance heights; reductions are not permitted.
Outdoor storage associated with a data center is allowed only where outdoor storage is permitted and must meet surfacing, maintenance, and screening requirements.
Data centers in special-purpose districts or subject to zoning conditions may require approval of a detailed site development plan covering structures, utilities, drainage, access, parking, open space, landscaping, signs, and screening.
Where the zoning district designates data centers as a special-permit use, approval requires a detailed site plan, City Plan Commission review and recommendation, a public hearing, and City Council approval; failure to satisfy permit conditions requires construction or occupancy to stop.
A data center that includes a major utility facility, such as energy generation, water treatment, storage, switching, or a primary substation, requires a special permit in any zoning district and must meet the applicable base-district requirements.
Under the proposed framework, hyperscale data centers in the C-4, M-1, and M-2 districts would require a special permit rather than being allowed by right.
The proposed hyperscale special-permit process would require public disclosure, public comment before the City Plan Commission and City Council, mailed notice to adjoining property owners, and City Council consideration.
Hyperscale data centers would remain prohibited in zoning districts where they are not currently allowed, and those in the I-MU Industrial Mixed Use district would continue to require City Council approval through the master zoning plan process.
Proposed supplemental zoning standards could require setbacks or separation distances from residential uses, natural reserves, or environmentally sensitive areas.
Proposed supplemental standards could require data-center equipment to be enclosed or screened by walls and could require a comprehensive impact study addressing environmental, utility, infrastructure, and land-use effects.
Developers would be required to submit an operations plan and comprehensive study addressing energy use, emissions, noise, water use, stormwater, and water treatment, including compliance, monitoring, and implementation timelines.
Data centers would be subject to proposed minimum performance standards for energy use, noise, backup power, and water use, with annual or semiannual enforcement.
Hyperscale data centers would be required to enter Community Benefit Agreements containing legally binding, measurable commitments such as infrastructure contributions, workforce development, neighborhood programs, or other community benefits.
The City would pause sales of public land expected to be used for hyperscale data centers until the framework's policies are developed, approved, and adopted by the City Council.
Contracts for public land sold for hyperscale data-center use would have to include the developer's environmental and economic commitments in writing, including commitments by the parent company.
Agreements related to hyperscale data centers would have to be signed by the parent company, rather than only by a subsidiary, making the parent company responsible for the obligations.
Benefits & exceptionsHide benefits & exceptions17
Qualifying data centers receive a 100% exemption from Texas state sales and use taxes for 10 to 15 years on eligible purchases used to build and operate the facility, including servers, software, cooling systems, generators, and plumbing.
Local jurisdictions may provide data centers with tax abatements through Chapter 312 agreements and other local tax incentives under Chapter 380.
Hyperscale data centers are permitted by right in the C-4 Commercial and M-1 and M-2 Manufacturing districts, subject to applicable development regulations rather than discretionary approval.
Hyperscale data centers may operate in the I-MU Industrial Mixed Use district when included in an approved master zoning plan.
The zoning code recognizes a hyperscale data center as a unified use that may include data-center buildings and related telecommunications, storage, cooling, power, generator, substation, communications, security, warehouse, office, fuel-storage, water-storage, and other support facilities.
The zoning-use table expressly identifies both data processing centers and hyperscale data processing centers and specifies districts where they are permitted or allowed subject to approval.
New or unlisted uses may be classified by the zoning administrator as similar to an existing permitted use; otherwise, the plan commission and city council may determine the appropriate zoning classification and amend the zoning code.
Mixed-use development plans receive expedited processing within thirty days, while master zoning plans and other applications requiring city council approval have an approximately sixty-day minimum; rezoning, mixed-use development-plan, and master-zoning-plan amendment fees are waived.
Mixed-use developments may use zero setbacks unless the city council requires otherwise in the master zoning plan and are exempt from ordinary landscaping requirements, with landscaping and green areas addressed through the applicable plan-review processes.
Mixed-use developments may use shared or community parking for different uses when supported by a shared-parking study and approved by the city.
Communication utility facilities and water and wastewater utility facilities are permitted in any zoning district. Facilities of 300 square feet or less have a ten-foot street-right-of-way setback and are exempt from other title requirements, while major utility facilities may be approved by special permit in any zone.
Temporary construction buildings and structures may remain for up to four years, or until construction is completed or abandoned, whichever occurs first.
A lawfully issued building permit remains valid despite a later zoning ordinance or amendment if the permit remains in force and actual construction has begun and continued under it.
Qualifying infill development may receive up to a 100% reduction in base-district setbacks and parking requirements, with parking reductions requiring a parking-impact study. Height may increase to a one-to-one height-to-street-width ratio on collector or arterial streets, and lots have no minimum area unless the overlay ordinance provides otherwise.
A legally established nonconforming data-center use or structure may continue operating if registered and verified as legally nonconforming. Normal repairs and maintenance are allowed for structures, but enlargement, additions, or changes generally must comply with current district requirements, and a use may terminate after at least 120 days of nonuse, abandonment, or certain damage.
If a governmental right-of-way acquisition causes zoning, parking, or landscaping violations, the property may be exempt from those requirements to the extent caused by the acquisition and may be registered as legally nonconforming.
Texas Senate Bill 6 requirements for loads exceeding 75 megawatts apply only in ERCOT territory; the El Paso region is outside ERCOT and therefore is not subject to those requirements.
Sources
current law · City of El PasoThe City of El Paso framework addresses future hyperscale data centers and recommends special permits, expanded public oversight, environmental and utility-impact studies, performance standards, buffers, and community-benefit agreements.City of El Paso Data Center Policy Framework
What this means
If implemented as described, the framework would make new hyperscale data centers significantly harder to build: projects would face special-permit review, technical studies and siting standards, lose local incentives, and be expected to pay for needed infrastructure. It is not a ban, and the City says implementation requires future ordinance amendments, so the framework itself does not immediately put all these rules in force (ordinance amendments still to come).
Timing
- Ends
- when the Data Center Policy Framework and associated code modifications are adopted by the City Council
The measure pauses City negotiations or development discussions for new data center projects during framework development and pauses public land sales for hyperscale data center use until the framework and associated code modifications are adopted. No separate calendar expiration date or extension condition is stated.
People behind it
- El Paso City Council
Authorized development of the Data Center Policy Framework and approved its adoption.
- City Manager
Was authorized to develop the proposed Data Center Policy Framework and administer its implementation.
- City Attorney
Was directed to conduct a legal analysis of existing data-center-related Chapter 380 agreements.
Restrictions & requirementsHide restrictions & requirements19
Future hyperscale data centers cannot be approved solely by right; they must obtain a special permit with public notice, City Plan Commission review, a public hearing, and final City Council action.
Tier 2 facilities—more than 50,000 but no more than 250,000 square feet and/or requiring 5 to 20 MW—require a special permit, City Plan Commission review, and City Council approval.
Tier 3 hyperscale facilities—more than 250,000 square feet and/or requiring more than 20 MW—require a special permit, City Plan Commission review, City Council approval, and supplemental use regulations.
Tier 2 and Tier 3 data centers are prohibited in zoning districts where the applicable use is not authorized, and the framework increases the public-notification boundary for hyperscale special-permit applications from 300 feet to 500 feet.
Tier 3 facilities must maintain a 300-foot buffer from residential uses and districts, parks, schools, daycares, hospitals, churches, and dedicated open spaces.
Tier 3 facilities must maintain a 100-foot building and equipment setback from all property lines.
Tier 3 facilities must provide a 30-foot perimeter landscape buffer with a double row of trees for visual screening and sound attenuation.
Tier 3 equipment, including backup generators and water-treatment systems, must be fully enclosed or screened by walls to control noise.
Tier 3 applicants must submit a utility impact assessment documenting projected water and energy consumption, peak electrical load, and energy sources before filing for a permit.
Tier 3 applicants must submit thermal and wastewater mitigation plans, including plans for wastewater management and mandatory private pretreatment or recycling stations.
Tier 3 applicants must submit certified acoustic and lighting studies demonstrating compliance with the City's noise and outdoor-lighting codes.
Tier 3 applicants must submit site and ecological screening that maps and protects local ecosystems.
Data-center developers must provide the City access to utility-consumption and emissions data, subject to applicable state and federal law.
Data centers must use the most efficient available cooling, water, and wastewater technologies and comply with future minimum standards for energy, water, noise, backup energy, emissions, stormwater, and water treatment.
Future hyperscale data centers are excluded from local economic subsidies, including Chapter 380 agreements, local tax abatements, tax rebates, public-financing assistance, and economic-development grants.
Developers must pay 100 percent of transmission, distribution, substation, generation-capacity, and water-infrastructure costs required to serve the data-center load, with protections against recovering those costs from nonparticipating residential or business customers.
Public land sales intended for hyperscale data centers are paused until the policy framework and associated zoning-code amendments are adopted by City Council.
Infrastructure agreements, community-benefit agreements, and development contracts must identify and obtain commitments from the ultimate parent company rather than only a local LLC or subsidiary.
While the framework was being developed, City negotiations or development discussions concerning new data-center projects were paused; the City Manager was directed to develop the framework within 60 days.
Benefits & exceptionsHide benefits & exceptions9
Qualifying data centers receive a 100% exemption from Texas state sales and use tax on eligible construction, equipment, software, cooling, generator, and facility-maintenance purchases for 10 to 15 years, subject to the statutory eligibility requirements. 100% exemption on state sales and use tax for 10 to 15 years
Texas law permits local jurisdictions to offer tax abatements through Chapter 312 agreements and other economic-development assistance through Chapter 380 agreements. The adopted framework recommends eliminating these incentives for future hyperscale projects, so this benefit may apply only where local policy has not prohibited it or to existing agreements. Local jurisdictions can also offer tax abatements via Chapter 312 and 380 agreements
Under the current El Paso zoning code, hyperscale data centers are allowed by right in the C-4, M-1, and M-2 districts, meaning they may proceed through ordinary development compliance without a special-use approval. They may also be allowed in the I-MU district through an approved master zoning plan. allowed by right in the C-4 (Commercial), M-1 (Manufacturing), and M-2 (Manufacturing) zoning districts
The current zoning code has no data-center-specific supplemental requirements beyond general dimensional, height, and parking rules. In particular, it does not currently impose special data-center setbacks, impact studies, screening, or environmental-use standards. there are no other supplemental requirements for the data processing center (hyperscale)
The proposed tiered zoning framework would allow small data centers of up to 50,000 square feet and below 5 MW peak load to remain permitted by right in C-4, M-1, M-2, and M-3 districts. Type 1 (Small): Up to 50,000 sq ft and <5 MW peak load
The federal National Policy Framework for Artificial Intelligence calls for streamlined federal permitting for AI infrastructure and allows developers to procure or develop on-site or behind-the-meter power generation, which can facilitate faster construction and power supply for data centers. streamline federal permitting for AI infrastructure construction and operation
The same federal framework recommends that Congress not create a new federal rulemaking body to regulate AI, limiting the creation of an additional federal regulatory layer for AI-related data-center development. Congress should not create any new federal rulemaking body to regulate AI
Texas Senate Bill 6 requirements for loads exceeding 75 MW—including financial security and, in some cases, on-site generation or demand-response capabilities—apply only in ERCOT territory. The framework states that El Paso is excluded because it is outside ERCOT, so those requirements do not apply to El Paso projects under that law. SB6 only applies to ERCOT territory, and therefore, the El Paso region is excluded
The federal Ratepayer Protection Pledge states that participating hyperscalers and AI companies will bring, build, or buy the generation needed for their data centers and pay for new power-delivery infrastructure upgrades, providing a defined pathway for obtaining capacity without assigning those upgrades to household electricity customers. The framework notes that the pledge is non-binding. pay for all new power delivery infrastructure upgrades
Sources
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