Data Center Site Selection in the Mountain West and Desert Southwest

For this guide, the Mountain West and Desert Southwest cover roughly Arizona, Nevada, Utah, New Mexico, Colorado and Wyoming, with neighboring areas. Most of the region is in the Western Interconnection and outside any ISO or RTO. Vertically integrated investor-owned utilities, public power entities, municipal utilities and cooperatives operate as or within balancing authorities, and many participate in real-time markets that operate across the West. Parts of the eastern edge of the region sit in SPP; see our guide to site selection in SPP.

Federal power marketing entities sell hydropower from federal dams in parts of the region, mostly to public power customers. Generation and transmission cooperatives supply many rural distribution cooperatives. As elsewhere in non-RTO regions, one utility often controls the generation, transmission and rate answer for a site.

The region has some of the strongest solar resources in the country, alongside gas, coal, wind and hydro. Utilities add new supply through resource plans reviewed by state commissions or, for public power, by their boards. A large new load that was not in the plan may require new generation and transmission before it can be served, and utilities increasingly expect large customers to help fund or commit to that supply.

Interconnection is utility-led. High-voltage service is commonly at 115, 138, 230, 345 or 500 kV. Distances between load centers are long, and the high-voltage network is sparse away from the metros, so a site can be close to a line but far from usable capacity. Where grid timing lags, developers sometimes look at gas-fired on-site generation; our comparison of grid power vs. on-site generation covers the tradeoffs, including air permits and gas supply.

Water supply is limited and closely managed. Rivers in the region have faced repeated shortage conditions. Some states designate groundwater management areas where new pumping is restricted. Surface and groundwater rights generally follow prior appropriation, and water is a visible public issue in many communities.

A data center plan here usually starts with the cooling design and works back to water. Low humidity makes evaporative cooling very effective, which reduces power use, but it consumes water. Air-cooled or closed-loop designs use little water but more power, especially on hot days. Reclaimed water from municipal treatment plants is an option in some metros. Our guide to data center water requirements covers sizing.

Summer temperatures in the low deserts are among the highest in the country. High ambient heat raises cooling loads, peak power demand and equipment stress, and heat rejection must be sized for the hottest hours, not the average.

Elevation is a separate issue that is easy to miss. Many sites in Colorado, Utah, Wyoming, northern Arizona and New Mexico sit at several thousand feet. Thinner air carries less heat and reduces the output of air-cooled equipment and engine generators. Manufacturers publish derating curves, and the effect grows with elevation and temperature. The design team needs the site elevation early.

Large parts of the region are federal land, and federal and private land is sometimes interspersed in checkerboard patterns. Building on federal land, or crossing it with a transmission line, pipeline or access road, creates a federal nexus that usually brings NEPA review. Several states hold large areas of state trust land, which is typically sold or leased through a public auction or application process with its own timeline.

Tribal lands have their own governments, land-use rules and approval processes. Projects on or near tribal land, or crossing it, need early engagement with the tribe.

• Flash flooding in washes and alluvial fans; FEMA mapping in rural areas can be incomplete, so local drainage studies matter.
• Wildfire in forested and grassland areas, and along the wildland-urban edge of growing metros.
• Seismic risk in parts of Utah and Nevada, among other areas.
• Dust storms that load air filters and affect outside-air cooling.
• Expansive and collapsible soils, caliche, and ground subsidence or earth fissures in areas of heavy groundwater pumping.

Our guide to natural hazard risk for data centers covers how to weigh these against each other.

Fiber concentrates in the main metros, including Phoenix, Las Vegas, Salt Lake City, Denver and Reno, with long-haul routes along the major interstate and rail corridors. Between metros, distances are long and diverse paths can be scarce. Remote sites near power or land can work, especially for latency-tolerant AI workloads, if two diverse routes are reachable at a workable cost.

1. 01Confirm the water source, its legal status and any groundwater area restrictions.
2. 02Choose a cooling approach that matches the water you can secure.
3. 03Confirm the serving utility and whether the load requires new generation or transmission.
4. 04Check land ownership: private, federal, state trust or tribal, and any federal nexus for lines and roads.
5. 05Record site elevation and design-day temperatures for equipment derating.
6. 06Screen flash flood, wildfire, seismic and soils, then map diverse fiber.