Community members voice their concerns about controversial project
By Molly Ann Howell
Managing Editor
Residents packed the city council chambers on April 28 for one reason: a proposed data center that could reshape Gallup’s industrial landscape.
Teraplex, a Washington D.C.-based firm, hopes to build the facility at the Gallup Tradeport, located off Carbon Coal Road—just north of Mentmore. Teraplex co-founder Greg Thompson said the site would ideally house tech giants such as Oracle, Meta, Amazon, or Microsoft.
But what is a data center exactly?
A data center is a physical (or virtual) facility that houses IT infrastructure—servers, storage systems, and networking equipment—to store, process, and manage large amounts of data. They are the backbone of the internet, powering cloud computing, A.I., and digital services by offering high-security environments, constant power, and advanced cooling.
However, these facilities often spark controversy.
Thompson spent most of his presentation tackling these fears head-on. He argued that Teraplex’s approach departs from the industry standard. For instance, he clarified that Teraplex wouldn’t draw from Gallup’s power grid. Instead, a mix of solar and natural gas would power the center, ensuring that residents’ electrical bills remain stable.
A NEW LIFE TO WASTEWATER
The conversation then shifted from energy to the region’s most precious resource: water. Thompson pledged that the facility would never touch the city’s drinkable supply.
“We will never ask for your drinkable water. Ever,” he said.
Instead, the company plans to use the city’s effluent water, which is the water that the community has already used.
Mayor Marc DePauli said using effluent water for the data center was an attractive option for him.
“I was always skeptical, and still am, of data centers,” he said. “People have come to Gallup and they want to put in data centers and use a lot of water. But bringing up the option of using our wastewater, it feels like kind of a game changer.”
Councilor Sarah Piano, Dist. 3, echoed this enthusiasm.
“I’m super thrilled it’s effluent water,” she said. “Our additional wastewater just goes down the perky right now. This would be actually receiving money for that wastewater that we’re doing nothing with essentially.”
Piano pointed out that Fox Run Golf Course is the only entity that currently uses the wastewater. It uses about 500,000 gallons a day.
Right now, Gallup’s wastewater treatment plant treats about 2.3 million gallons of water a day. The city currently has an agreement with Gallup Land Partners that says they can purchase about a million gallons of that effluent water a day.
ECONOMIC PROMISES VS ENVIRONMENTAL REALITY
Beyond resources, Thompson highlighted the project’s economic potential. He estimated the project would generate 2,500 construction jobs and 300 permanent, high-paying positions.
Teraplex plans to only hire locally for these positions.
“What we’re looking at is making sure that we are only pulling resources from this area,” Thompson said. “We plan on training and building up this workforce as opposed to bringing it in from elsewhere.”
However, the community remained unconvinced.
While Thompson presented his vision, a crowd of skeptical residents waited for their chance to speak. Because the presentation was not a formal discussion item, the public had to wait until a specific vote on the effluent option agreement appeared later on the agenda.
The City of Gallup and Teraplex have reached a deal regarding an effluent option agreement, a contract giving Teraplex the right to buy recycled wastewater. What was before the council during the April 28 meeting was the third update to an original deal started by a company called Coles Gray, which has since passed its rights to Teraplex.
The agenda item at the meeting stated that some amendments had been made to the agreement.
The agreement stated that Teraplex plans to buy about 330 acres plus nearby land to build a data center complex. If they buy the property, they intend to buy wastewater from the city. Per the agreement, Teraplex can buy up to 109.5 million gallons of wastewater per year. They have three years to officially decide to use this option.
The agreement comes with strict deadlines. Teraplex would be required to buy the land within four years, and they must begin building within five years of the purchase. If they miss either deadline, the city can cancel the deal.
For the first 15 years of the agreement, Teraplex will pay the 2026 rate of $5.66 per 1,000 gallons of wastewater. In 2041, the price will update to whatever the city’s rate is then. This new price will stay the same for the rest of the 30-year deal.
Starting in the seventh year of the agreement, Teraplex must pay for at least one-third of their guaranteed water amount, even if they don’t use it. If they don’t pay, the city can cancel the deal.
Teraplex must tell the city every year how much water they plan to use.
If Teraplex doesn’t need their full amount of effluent water, the city can sell the extra to someone else. If Teraplex needs more than their limit, they can buy it only if the city has enough left over.
After Deputy City Attorney Erika Pirotte summarized the effluent water agreement but before he allowed for public comment, DePauli stressed that what the council was voting on that night was not whether or not Teraplex would be allowed to build a data center, but rather to accept the changes made to an agreement that is already in place.
“The city has a long history of effluent water, and this agreement is a lot better than any we’ve ever had,” DePauli said. “It makes the city money, it has a termination clause that says if nothing gets done, then the agreement terminates.”
Finally, it was the community’s turn to speak up.
Approximately a dozen residents spoke out against data centers.
Jean Phillips lives in Mentmore, where the proposed data center could be built.
“In my experience and in the reading I’ve done on data centers, the folks who propose data centers make a lot of promises,” she said. “They promise a lot of jobs, they promise low impact, and the reality turns out to be different.”
Larry Winn, who is a former board member of the McKinley Soil and Water Conservation District, also spoke about his concerns regarding a data center.
“Gallup has an unclear future concerning water rights,” he said. He also noted that data centers have come to earn a national reputation as “the biggest single problem there is.”
He also warned that more and more southwest states could begin fighting over water rights. He pointed to Phoenix, which has recently seen a decrease in their Colorado River water supply. The Colorado River provides nearly 40% of the city’s water.
Winn said that if it comes down to a fight for water rights between Gallup and bigger areas such as Los Angeles, Calif., Gallup will lose.
He also questioned why Teraplex was approaching the city now when Coles Gray had been sitting on the agreement and doing nothing for years.
“The upshot for me and many people is ‘What’s the rush?’ Coal’s Grey has put off doing anything for three years. Now all of a sudden [Teraplex] wants your signature tonight,” Winn said.
Councilor Sierra Yazzie Asamoa-Tutu, Dist. 2, also voiced her concerns about the agreement and possible data center. Yazzie is the first ever Navajo member of the Gallup City Council.
“I do feel that I have a responsibility to my ancestors who stewarded this land for generations,” she said. “I do have a few questions, and I’m very interested in the impacts not just on our community but also on the environment, the wildlife, the ground water, and the impacts of data centers on the ground underneath them.”
Yazzie also mentioned a lawsuit that the New Mexico Environmental Law Center filed over Project Jupiter. Project Jupiter is a massive $165 billion Artificial Intelligence training data center campus that has been proposed for Doña Ana County.
The New Mexico Environmental Law Center is currently suing the county, arguing that the county improperly approved $165 billion in bonds without adequate analysis of environmental, water, and air impacts.
Yazzie said she wouldn’t want the City of Gallup to get into legal trouble over the data center.
Thompson said he would be open to holding public discussion opportunities for the community and council to learn more about Teraplex and their plans for the data center.
After listening to community members, Yazzie suggested deferring any action on the effluent water agreement with Teraplex until a later date. She said the council and the community needs more information before the council can make a decision.
When it came time to vote on Yazzie’s proposed motion, all of the councilors voted to defer action. DePauli was the sole “no” vote.
In an interview with the Sun, he explained why he voted “no.”
“As far as I’m concerned I wanted to get it taken care of, we either decide or not,” he said. “I wanted to have a clear vote on it.”
As of press time, Teraplex and the City of Gallup haven’t chosen a date for a future public forum. More information will be published when it becomes available.
