As regulators seek data center power rules, critics say Xcel is proposing ‘secret process’ as loophole for some projects
Colorado regulators are crafting new rules for data center power consumption, driven by Xcel Energy's estimated surge in demand. Critics are raising concerns about a 'speed to market' loophole proposed by Xcel, fearing it could lead to secret contracts and increased costs for regular ratepayers while hindering clean energy goals. Local governments across the state have already enacted moratoriums on new data center development.
The Colorado Public Utilities Commission (PUC) is developing new rules for data centers and other large-load customers, in response to Xcel Energy's projections of extraordinary power demand from the booming industry. These regulations aim to prevent the costs of powering data centers from being passed on to residential and small business ratepayers, making them the most comprehensive standards in Colorado.
However, environmental advocates and local leaders, including Colorado Sen. Cathy Kipp, are scrutinizing a proposed "speed to market" option by Xcel Energy. This provision would allow certain data center customers to negotiate custom contracts outside the standard regulatory process, raising concerns about transparency, potential loopholes, and the ability of advocacy groups to review these agreements. Critics, such as Matt Gerhart of the Sierra Club and Eric Frankowski of the Western Clean Energy Campaign, argue this option could undermine the entire rulemaking process.
Amidst these statewide efforts, several local governments, including Denver, Jefferson County, Longmont, and Saguache County, have already enacted moratoriums on data center development to update their ordinances. Public comment hearings have seen dozens of Coloradans, from diverse backgrounds, urging the PUC to implement strict rules. They voiced concerns about rising energy costs, potential reliance on fossil fuels, and the impact on the state's clean energy goals. A coalition of 100 elected officials also sent a letter to the PUC, advocating for regulations that protect current customers.
Despite the regulatory debate, data center construction continues in Colorado, with projects like Global AI's 27-megawatt facility in Weld County and QTS's expanding 160-megawatt data center in Aurora. The PUC is expected to finalize the rules by the end of the year, with a final public comment hearing scheduled for October.