Proposed data center regulation in Colorado draws critics, backers

The Colorado state Capitol recently hosted a contentious hearing revealing a sharp division over proposed legislation aimed at regulating the state's burgeoning data center industry. Senate Bill 26-102, sponsored by Sen. Cathy Kipp and Rep. Kyle Brown, seeks to impose stringent requirements on large-load data centers, mandating 100% of electricity from new renewable resources by 2031, along with water and power reporting, cumulative impact analyses, and community benefit agreements. Industry groups, including Dan Diorio of the Data Center Coalition and Sandra Hagen Solin of the Data Grid Consortium, strongly opposed SB 102, arguing it would deter billions in investment and thousands of jobs, pushing AI projects to other states. The Senate Transportation and Energy Committee delayed a vote on the bill. In contrast, House Bill 26-1030, championed by Reps. Alex Valdez and Monica Duran and Sen. Kyle Mullica, proposes creating a Colorado Data Center Development Authority. This authority would certify projects that meet specific labor, wage, efficiency, and environmental standards, granting them a 20-year state sales-and-use tax exemption. HB 1030 offers a broader definition of "renewable and clean energy," including small modular nuclear reactors, which is a key philosophical difference from SB 102's stricter "renewable resources" definition. Supporters of SB 102, like Caroline Nutter of the Colorado Fiscal Institute and Deborah Kapiloff of Western Resource Advocates, argue it's a responsible framework that protects ratepayers and advances climate goals without offering tax breaks to a profitable sector.