Data Centers in El Paso
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El Paso – Strategic US-Mexico Border Gateway
El Paso is a strategic data center market for businesses requiring low-latency connectivity to Northern Mexico and the southwestern United States. Its favorable tax climate and low natural disaster risk profile make it a compelling, cost-effective alternative to larger Texas markets for specific workloads. This location provides a crucial digital infrastructure link for logistics, manufacturing, and government operations focused on cross-border trade.
El Paso: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid regional connectivity, though direct cloud access is limited. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest hubs are Phoenix or Dallas; private network extensions available. |
| Power Cost | $0.06 – $0.08/kWh (est.) | Industrial electricity prices are competitive for the region. |
| Disaster Risk | Moderate (43.46) – as of September 2025 | Very low overall score with primary risks from weather extremes. |
| Tax Incentives | Yes | State sales and use tax exemption for qualified data centers. |
| Sales Tax | 6.25% (State Rate) – as of Midyear 2025 | State-level sales tax; local taxes may also apply. |
Network & Connectivity Ecosystem
El Paso's connectivity ecosystem is tailored for regional and cross-border traffic, serving as a key digital link between the United States and Mexico.
Carrier Density & Carrier Neutrality The market is served by over 6 providers, as of September 2025, offering a mix of regional and national networks in carrier-neutral facilities. This ensures competitive pricing and diverse routing options for colocation customers.
Direct Cloud On-Ramps There are no direct, native cloud on-ramps in El Paso, as of September 2025. Businesses connect to major cloud providers through dedicated network services like PNI or wave to larger hubs such as Dallas or Phoenix.
Internet Exchange Points (IXPs) Public peering is limited within El Paso itself. Most interconnection occurs through private peering arrangements inside local data centers or by routing traffic to major exchange points in Dallas.
Bare Metal Bare metal server options are available, providing dedicated compute resources for workloads that require high performance and security. Providers such as Hivelocity offer deployment capabilities in the region.
Power Analysis
El Paso offers reliable and competitively priced power, a critical factor for managing data center operational costs.
Average Cost Of Power Industrial electricity rates are estimated between $0.06 and $0.08/kWh, as of September 2025. This competitive pricing structure helps lower the total cost of ownership for high-density deployments. The grid mix is dominated by natural gas (~50%) and includes a significant renewable component (~30%) from wind and solar.
Power Grid Reliability The power grid supporting El Paso is well-engineered for its climate, with infrastructure built to handle the demands of industrial and commercial users. The region's energy generation portfolio provides a stable and reliable power supply for mission-critical operations.
Market Access, Business & Tax Climate
El Paso's location and business environment are optimized for specific industries, particularly those involved in international trade and logistics.
Proximity To Key Business Districts Data centers in El Paso are strategically located to support the massive logistics and manufacturing industries that thrive along the US-Mexico border. They also serve Fort Bliss, one of the largest military installations in the United States, and related government contractors.
Regional Market Reach The market provides effective, low-latency coverage for West Texas, southern New Mexico, and the northern Mexican state of Chihuahua, including the major industrial city of Ciudad Juárez. This makes it an ideal hub for cross-border data traffic.
Tax Advantage For Data Centers Texas offers a significant sales and use tax exemption for qualifying data centers. This incentive substantially reduces the upfront capital expenditure on servers, networking gear, and power infrastructure, making large-scale deployments more financially viable.
Natural Disaster Risk
El Paso has a moderate natural disaster risk profile, with a FEMA National Risk Index score of 43.46 out of 100, as of September 2025. This score indicates a very low risk compared to the national average, making it an attractive location for infrastructure stability.
The primary environmental threats are related to extreme weather events. Key risks for the area include Drought, Heat Wave, Hail, Wildfire, and Riverine Flooding. The region has no significant exposure to major seismic, hurricane, or tornado events.
