Colorado Lawmakers Kill Both Major Data Center Bills This Year

Colorado lawmakers have rejected two significant bills that sought to regulate large data centers across the state, leaving the Colorado Public Utilities Commission as the primary body for oversight. The legislative action means the state will not implement new statewide rules on data centers for the foreseeable future, despite warnings from opponents about soaring electricity demand, increased utility costs, and heightened water consumption. One measure, SB 26-102 "Large Load Data Centers," was withdrawn by its sponsor, Sen. Cathy Kipp, D-Fort Collins, in the Senate Transportation and Energy Committee. This bill would have mandated 100% annual renewable energy matching by 2031 for new large facilities, required long-term contracts to cover full infrastructure costs, and included community impact analyses. Separately, HB 26-1030 "Data Center and Utility Modernization" failed in the House Energy and Environment Committee. It aimed to attract investment through sales-tax exemptions while imposing requirements for full cost-of-service, job creation, wage standards, and water-efficient cooling technology. Environmental and consumer advocacy groups, including Conservation Colorado, Earthjustice's Rocky Mountain Office, and AARP Colorado, expressed disappointment, arguing that both bills fell short but were necessary. They contend that unrestricted data center growth will burden residential ratepayers, strain water supplies in a drought-prone state, and hinder Colorado's clean energy objectives. A Conservation Colorado poll indicated 91% public support for "common-sense rules" to protect resources and communities. These groups have pledged to continue their advocacy efforts in future legislative sessions. Conversely, industry representatives and the Data Grid Consortium, a coalition of data center developers, argued that SB 26-102's mandates were overly restrictive and would deter investment. They viewed HB 26-1030 as a more balanced approach that could foster economic development while providing some safeguards. Xcel Energy has projected a more than 40% increase in peak power demand by 2035, largely driven by new large-load customers like data centers. Sandra Hagen-Solin, director of the Data Grid Consortium, noted the industry's interest in small modular reactors (SMRs) as a potential solution, especially since nuclear energy was recently added to Colorado's clean energy definition through a bill signed by Gov. Jared Polis in March 2025.