As Colorado River shrinks, a public power system frays
Hydropower generation from the Wayne N. Aspinall Unit on Colorado's Gunnison River is significantly declining due to the shrinking Colorado River, leading to increased electricity prices and supply strain. This decline coincides with a projected surge in electricity demand from new data centers, particularly those supporting artificial intelligence development. Colorado lawmakers' efforts to impose accountability on data centers through Senate Bill 26-102 were rejected, leaving the state's power grid vulnerable to escalating demand.
The Wayne N. Aspinall Unit, Colorado's sole federal hydropower system on the Gunnison River, is experiencing a nearly 30% reduction in electricity generation compared to its historical average. This shortfall is attributed to the shrinking Colorado River and its tributaries, exacerbated by climate change, causing reservoirs like Blue Mesa to operate at significantly reduced capacity and threatening the system's ability to meet power demands across the West.
This decline in hydropower coincides with a projected surge in electricity demand, primarily from data centers powering artificial intelligence. The Federal Energy Regulatory Commission (FERC) has ordered grid operators nationwide to accelerate transmission connections for these large energy users, intensifying the pressure on an already stressed electricity supply in Colorado. Utilities like Xcel Energy anticipate that large industrial customers, predominantly data centers, will drive approximately two-thirds of their new demand, potentially leading to substantial rate increases for consumers.
Colorado lawmakers attempted to address the issue by introducing Senate Bill 26-102, which aimed to impose accountability requirements on data centers. However, the bill was defeated before the General Assembly adjourned in May, leaving the state without new regulations to manage the environmental and grid impacts of data center growth. The situation highlights a growing tension between increasing energy demand and a decaying supply infrastructure, with potential long-term consequences for both electricity costs and water resource management in the Colorado River Basin.