Data Centers in El Paso
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El Paso – Strategic Hub for Border and Southwest Access
El Paso is a strategic colocation market for enterprises requiring low-latency access to West Texas, Northern Mexico, and the broader U.S. Southwest. Its location provides a unique digital gateway for cross-border commerce and regional distribution, offering a cost-effective alternative to larger, more expensive Texas markets. This market ensures reliable infrastructure deployment for businesses targeting this distinct geographic corridor.
El Paso: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid regional connectivity, with fewer long-haul fiber routes than major hubs. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest hubs are Phoenix or Dallas; private network extensions are available. |
| Power Cost | $0.07–$0.09/kWh – as of September 2025 | Favorable rates due to a diverse energy mix heavy on natural gas. |
| Disaster Risk | Moderate (43.46) – as of September 2025 | Overall risk is moderate, with primary concerns from heat, drought, and wind. |
| Tax Incentives | Yes | State-level sales and use tax exemptions are available for qualified data centers. |
| Sales Tax | 6.25% (State) – as of Midyear 2025 | Texas state sales tax rate; local taxes may apply. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: El Paso supports a focused connectivity environment with approximately 6 providers operating within its 4 data centers, as of September 2025. The market offers access to regional and national carriers, with carrier-neutral facilities providing options for interconnection and network redundancy.
Direct Cloud On-Ramps: As of September 2025, there are no direct, dedicated cloud on-ramps within El Paso. Businesses connect to major cloud providers like AWS, Google Cloud, and Microsoft Azure via network links to primary hubs such as Phoenix or Dallas. Private network connections can be established to secure reliable, low-latency cloud access.
Internet Exchange Points (IXPs): Public peering is limited within El Paso. Most network traffic exchange occurs through private peering arrangements within local data centers or is routed through major interconnection hubs in Dallas or Phoenix.
Bare Metal: Bare metal server options are available in the region, providing dedicated compute resources for performance-sensitive applications. Providers like Hivelocity and phoenixNAP can serve customers in the El Paso market from nearby locations.
Power Analysis
Average Cost Of Power: Industrial electricity rates in El Paso typically range from $0.07 to $0.09 per kWh, as of September 2025. This competitive pricing, driven by Texas's diverse energy portfolio of natural gas, wind, and solar, helps reduce overall operational expenditures for data center users.
Power Grid Reliability: The power grid serving El Paso is well-engineered for the region's demands. Local data centers are supported by utility infrastructure designed for high availability, with facilities offering standard N+1 or greater redundancy on power systems.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in El Paso are strategically located to serve the city's commercial centers and industrial parks. This proximity is critical for organizations in logistics, manufacturing, and international trade that rely on real-time data processing for operations spanning the U.S.-Mexico border.
Regional Market Reach: El Paso provides an effective service point for a large geographic area that is often underserved by other major hubs. It can deliver low-latency services to West Texas, Southern New Mexico, and the crucial manufacturing and population centers of Northern Mexico, including Ciudad Juárez.
Tax Advantage For Data Centers: Texas offers significant tax incentives that directly benefit data center operators and tenants. A state-level sales and use tax exemption on equipment, software, and electricity for qualified facilities lowers the total cost of ownership and makes large-scale deployments more affordable.
Natural Disaster Risk
El Paso has a moderate natural disaster risk profile, with a FEMA National Risk Index score of 43.46, as of September 2025. The score reflects a "Very Low" ranking nationally, but the specific regional hazards warrant attention. Key risks for infrastructure planning include drought, extreme heat waves, hail, and high winds from winter storms. Other notable risks are riverine flooding and wildfire, though these are typically localized.
