Denver is considering a temporary halt to new data center construction as city officials move to review regulations governing the rapidly expanding industry. The proposed moratorium, announced , aims to address concerns over the substantial water and energy consumption of these facilities, as well as their impact on local utility costs and land use.
Mayor Mike Johnston’s office stated the pause, expected to last “several months,” would allow for the development of data center-specific regulations focused on “responsible land, energy and water use,” and affordability for utility ratepayers. The ordinance enacting the moratorium requires approval from a majority of the Denver City Council.
“Data centers power the technology we depend upon and strengthen our economy,” Johnston said in a released statement. “But as this industry evolves, so must our policies. This pause allows us to put clear and consistent guardrails in place while protecting our most precious resources and preserving our quality of life.”
The move comes amid growing scrutiny of the environmental footprint of data centers, which are essential infrastructure for cloud computing, artificial intelligence, and the digital economy. Companies like Google and Meta rely on these facilities to store and process vast amounts of data, enabling services ranging from email and online banking to streaming entertainment and social media.
However, the energy and water demands of data centers have raised concerns in communities across the United States, particularly in arid regions like Colorado. A report from June 2025 highlighted the significant water and energy consumption associated with these facilities, fueling calls for greater accountability and sustainable practices.
While the moratorium would not affect existing data centers or projects already permitted or under construction, those projects could be subject to the new guidelines once they are finalized. A controversial data center currently being built in the Elyria-Swansea neighborhood of northern Denver would not be immediately impacted, according to reports.
Councilman Paul Kashmann, while generally supportive of the initiative, acknowledged differing viewpoints within the council. “There is still distance between the mayor’s view and mine… as well as some other council colleagues,” he said in a statement. Kashmann expressed a desire to explore regulations similar to those implemented in other cities, to determine whether further data center development remains viable in Denver.
Councilman Darrell Watson, who plans to introduce the proposal, emphasized the city’s commitment to both innovation and environmental protection. “Data centers use significant energy and water. We have a responsibility to manage their growth in our communities wisely and sustainably,” Watson stated. “We can protect the health of Denver communities, strengthen our climate commitments and continue to keep our city moving forward responsibly.”
The city plans to collaborate with residents, climate experts, and industry leaders to develop the new regulations. This collaborative approach reflects a broader effort to balance economic development with environmental sustainability and community concerns.
The debate over data center regulation extends beyond Denver city limits. State lawmakers are currently considering two competing bills related to the industry. House Bill 1030 proposes 20 years of full sales and use tax exemptions for data center builders who meet specific investment and job creation requirements. Conversely, Senate Bill 102 would mandate that data centers source 100% of their energy from renewable sources. Negotiations between proponents of the two bills are ongoing, with a committee hearing for HB-1030 having been delayed to facilitate these discussions.
The proposed moratorium in Denver reflects a growing trend among municipalities grappling with the challenges and opportunities presented by the rapid expansion of the data center industry. As demand for digital services continues to rise, cities are increasingly seeking to establish clear and consistent regulations that promote responsible growth and protect vital resources.
