Despite bill death, negotiations on potential data-center incentives continue

Colorado state legislators continue active negotiations to incorporate data center incentives alongside regulatory guardrails into Senate Bill 102, a proposal that has been dormant for two months. This comes after House Bill 1030, which focused on significant incentives to attract data centers, was reluctantly killed by its sponsor, Rep. Alex Valdez, D-Denver. Valdez's bill aimed to position Colorado among 30 states offering incentives like sales and use tax exemptions for investments over $250 million, and included prevailing wage requirements. Environmental interests and some lawmakers, including Sen. Cathy Kipp, D-Fort Collins, who sponsored SB 102, have pushed for regulations to address concerns about data centers' energy and water consumption, as well as their impact on local grids. Kipp's bill initially proposed banning utility economic agreements for data centers and mandating 100% self-sourced renewable energy. Rep. Junie Joseph, D-Boulder, even suggested a moratorium on data center development until impacts are better understood, an idea opposed by Gov. Jared Polis. Despite the legislative hurdles, stakeholders are eager to find a compromise, fearing that inaction would leave Colorado without either economic development or environmental protections related to data centers. Industry advocates stress the need for incentives to attract major investments, while environmental groups like the Southwest Energy Efficiency Project, represented by Courtney Fieldman, emphasize the necessity of protections. If state-level legislation fails, attention will shift to Public Utilities Commission rulemaking and local governments, such as Weld County and Denver, which are beginning to develop their own data center regulations.