Proposed rates meant to make data centers pay own way, Xcel Energy says

Xcel Energy has submitted a proposal to the Colorado Public Utilities Commission (PUC) for a new electricity rate class specifically designed for data centers and other large energy users consuming at least 50 megawatts. The utility, Colorado's largest electric provider, states the new tariffs are intended to ensure these energy-intensive facilities cover the full cost of the generation and transmission infrastructure required to serve them, thereby protecting residential and small-business customers from increased rates. The proposal mandates 15-year contracts, financial assurance, and significant exit fees for early shutdowns. Jack Ihle, Xceleachrs vice president of data centers and large loads, emphasized the companyeachrs goal to preserve system reliability and ensure data centers pay for their infrastructure needs. He noted substantial interest in Colorado data centers, accounting for 62% of Xceleachrs projected energy growth in its recently approved resource plan. The PUC is expected to hold months of hearings and take public input on the plan. Concurrently, the Colorado General Assembly is debating two data center bills: one offering sales and use tax incentives for development and another imposing regulations. Data center critics, including Colorado Communities for Climate Action advocacy director Anita Seitz, expressed concerns about water usage, electricity demands, and the potential for increased natural gas use, which could hinder the state's clean energy goals. Xceleachrs proposal includes a "clean transition tariff" to encourage data centers to invest in carbon-free technologies. Despite current electricity supply concerns, including an outage at the Comanche 3 coal plant near Pueblo and potential gaps in 2027-2028, Ihle stated that no new data centers would come online before mid-2026. Robert Kenney, Xcel Energy-Colorado President, acknowledged both customer concerns over energy needs and the potential for jobs, investment, and innovation brought by large customers like data centers.