As more Colorado local governments implement temporary bans on data centers, developers are better off looking elsewhere, according to an energy policy analyst.

Sarah Montalbano, who researches energy and natural resources at the Denver-based Independence Institute, said these recent decisions by Fort Collins and Littleton are “coming out of a broader trend in Colorado where cities and municipalities” are deciding their own rules about data centers.

This week, Fort Collins and Littleton both approved a six-month temporary moratorium on data centers. At least 16 local governments in Colorado have adopted temporary moratoriums on new data centers, including Denver, the state’s largest city.

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The moratorium gives the impression that Colorado doesn’t want data center developers, Montalbano explained.

Ginny Sawyer, Fort Collins City Manager Kelly DiMartino’s assistant, told The Center Square that the city council implemented the moratorium to give it “time to pause potential applications and see what regulations [it] might want to put in place.”

Fort Collins, a city of around 175,000 people, raised concerns about data centers’ use of water and electricity, as well as lighting and noise, she noted.

The city’s ordinance says the data center moratorium lasts until April 6, 2027.

Sawyer said the city has no pending data center applications.

David Gilbert, a Littleton spokesperson, said the six-month ban gives the city the “time to better understand [data centers’] impacts and develop appropriate regulations before a new data center development could move forward."

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These entities are “an increasingly common part of the technology landscape, but they can have significant impacts on energy, water use, infrastructure, noise and air quality,” he told The Center Square by email.

Gilbert called the temporary ban a “proactive step to ensure future decisions align with Littleton’s community priorities, infrastructure capacity and long-term vision while establishing clear standards for if, where and how these facilities may be appropriate in our community.”

Littleton’s ordinance does not list a specific end date for the moratorium, but it gives the city council the option to end it earlier if it can adopt data center regulations within six months.

Jerad Chipman, Littleton’s planning manager, said at the city council meeting that the city has no pending data center applications.

Montalbano said there is “nothing so permanent as a temporary moratorium,” highlighting the history of nuclear moratoriums, which also started out as temporary.

Eight data center developers are headquartered in Colorado, but none have built any facilities in the state, according to Montalbano.

She said data centers bring many benefits to an area, including tax revenue and “high-paying jobs.”

Despite these benefits, she said local governments should review data centers on a case-by-case basis and write specific ordinances, such as those about water or electricity, rather than preventing data centers from being built.

For background on the state's rules, a February 2025 commentary argues that Colorado needs better data center policy than it currently has and explains what is missing.

Colorado’s energy policy is “very difficult for developers to look at and decide they want to site here; just not being able to guarantee a sufficient supply of electricity for utilities is a really big deal for them,” she explained.

Montalbano said the state has been “shrinking its reliable and affordable baseload generation” for electricity, such as natural gas or coal-fired plants.

Colorado utility companies have invested more money in wind and solar, which “doesn’t provide the same value to the grid,” the energy policy analyst said.

According to Sawyer, data centers may not be a good fit in Fort Collins, citing the city’s lack of available land.

Depending on the size of the data center, Sawyer said the city doesn’t have “much greenfield space or large interior reuse opportunities” for data centers to operate.

Like Sawyer, Littleton City Councilmember Joe Zink also questioned if data centers would be a good fit. He said at the meeting that putting data centers in the city of nearly 50,000 people is not the “highest and best use” of the limited land the city has available.

Looking ahead, Montalbano anticipated Colorado lawmakers implementing a rule requiring “data centers to run on a certain proportion of clean energy generation.” If this is implemented, she said this would be a “huge deterrent” for data center developers who would otherwise use natural gas generation.