El Paso City Council to vote on Data Center Policy Framework—permits, taxes, utilities

El Paso City Council’s July 20, 2026 City Council Work Session includes an action item to approve a Data Center Policy Framework, a plan designed to tighten how future hyperscale data centers are approved and supported—especially in ways that could affect residents near proposed sites.

According to the City’s meeting record, the Work Session begins at 9:00 a.m. and includes agenda item 26-0778. The same record notes minutes are not yet finalized, so vote outcomes won’t be available in advance.

Agenda item: council action on July 20

The resolution asks City Council to approve adoption of the Data Center Policy Framework and authorizes the City Manager (or designee) to direct staff to implement the Framework after consultation with the City Attorney’s Office.

Permitting shift: from “by-right” to a Special Permit tier system

A core change described in the Framework is removing hyperscale facilities from “by right” status—meaning some projects would no longer qualify to proceed without additional zoning approvals. Instead, the Framework proposes a tiered approach based on size and peak electrical load, using the Special Permit process for more projects than it would under a by-right model.

The Framework describes these tiers:

• Type 1 (Small): up to 50,000 sq ft and < 5 MW peak load, permitted by right in C-4 and M-1, M-2, and M-3 districts.
• Type 2 (Medium): 50,001 to 250,000 sq ft and/or 5 MW to 20 MW peak load, requiring a Special Permit in M-1, M-2, and M-3 plus CPC review and City Council approval.
• Type 3 (Hyperscale): > 250,000 sq ft and/or > 20 MW peak load, also requiring a Special Permit in M-1, M-2, and M-3, CPC review, City Council approval, and supplemental use regulations.

What changes for nearby residents: notification, buffers, and noise controls

For Type 2 and Type 3 Special Permit applications, the Framework proposes expanding public notice. It would increase the public notification boundary from 300 feet to 500 feet for hyperscale Special Permit applications.

For Type 3 specifically, the Framework describes these proximity and building controls:

• A mandatory 300-foot buffer from residential uses, zoning districts, parks, schools, daycares, hospitals, churches, and dedicated open spaces.
• A 100-foot building and equipment setback from all property lines.

It also describes Tier 3 noise mitigation expectations, including:

• A 30-foot perimeter landscape buffer featuring a double row of trees for visual screening and sound attenuation.
• Requiring equipment (including backup generators and water treatment systems) to be fully enclosed or walled to control noise.

For compliance testing, Tier 3 is tied to post-development noise and lighting rules referenced as City Code 9.40 (at the property line) and Outdoor Lighting Code 18.18.

Utilities, costs, and incentives: more up-front impact studies, fewer local subsidies

The Framework’s Tier 3 “impact studies” language is focused on requiring technical validation before permit filing, including:

• A Utility Impact Assessment with verifiable data on projected water/energy consumption, peak electrical load, and specified energy sources.
• A Thermal & Wastewater Mitigation Plan, including a detailed approach to wastewater and mandatory private pre-treatment or recycling stations.
• Acoustic & Lighting Compliance supported by formally certified engineering studies.
• Site & Ecological Screening mapping to identify and protect local ecosystems.

On incentives, the Framework’s “Complete Incentive Elimination” section says it would explicitly prohibit local subsidy tools for hyperscale facilities, including Chapter 380 agreements, local tax abatements and tax rebates, public financing assistance, and economic development grants.

The Framework also includes a cost-protection concept aimed at limiting utility cost shifting: it says developers would need to demonstrate 100% of certain transmission/distribution/substation/generation capacity additions (or required water-related infrastructure to serve the data center load) must be paid by the developer, and it is intended to protect against utility cost recovery from non-participating residential or business customers during the life of the assets.

Important context: the Framework also states it does not direct staff to reconsider, reopen, cancel, or void any existing agreement.

Background: May 26 direction is now getting a formal framework

This July 20 vote follows City Council action reported by KVIA on May 26, 2026, when council adopted a general policy direction opposing the recruitment and incentivization of future hyperscale data centers and directed staff to continue developing a broader Data Center Policy Framework for future consideration.

If adopted, the biggest practical change residents are likely to notice first is that more hyperscale projects would have to move through a Special Permit process (especially Type/ Tier 3), bringing stronger notification and proximity/noise requirements and adding additional technical documentation expectations tied to utilities and infrastructure impacts.

Sources

• El Paso Legistar — July 20 Work Session agenda (item 26-0778)
• City of El Paso — Resolution (Data Center Policy Framework)
• KVIA — May 26, 2026 council direction opposing hyperscale recruitment/incentives

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