Local policy patchwork adds to Colorado’s data center dilemma
Colorado is facing a dilemma with data center development due to a lack of state-level policy, leading local governments in cities like Walsenburg, Parker, Denver, and several counties to enact or consider moratoriums. Residents are concerned about transparency and potential increases in electricity rates, while state legislative attempts to address these issues have failed to pass. Companies like BluSky AI and Flexential are proceeding with projects amidst this policy patchwork.
Colorado is grappling with a "patchwork" of local data center regulations as the state legislature has yet to pass comprehensive policy, leaving communities to implement temporary moratoriums. This fragmented approach has led to confusion and concerns from residents in cities like Walsenburg and Parker, where projects by BluSky AI and Flexential, respectively, proceeded with what some consider insufficient public transparency. Residents are particularly worried about data centers driving up electricity rates, a concern an Institute for Energy Research study found to be more a function of policy than end-user demand.
Several state legislative attempts to regulate data centers and protect ratepayers failed during the recent session. These included Senate Bill 26-102, which aimed to shift energy cost burdens to operators and link tax exemptions to sustainability, and House Bill 26-1030, proposing state tax exemptions for centers meeting job creation and sustainability goals. Another bill, House Bill 26-1246, suggested placing data centers on islanded grids with costs borne by the utility and the data center, bypassing lengthy Public Utilities Commission approvals.
In the absence of statewide action, Larimer, Jefferson, and Boulder counties, along with the City of Denver, have enacted temporary data center moratoriums, with Broomfield also considering one. Industry representatives, such as Dan Diorio, Vice President of State Policy at the Data Center Coalition, warn that such local bans send a negative signal for economic development. The article concludes that the Colorado legislature needs to intervene to bridge the regulatory gap and ensure transparent, collaborative development.