Xcel moves to block data centers from sticking families with higher power bills

Xcel Energy has filed a "Large Load Tariff" proposal with the Colorado Public Utilities Commission (PUC) on April 2, seeking to compel major electricity consumers, such as data centers, to bear the complete financial burden for the power plants, substations, and transmission lines they necessitate. The utility and consumer advocates warn that without such measures, the escalating power demands of data centers could lead to increased monthly bills for average Colorado households. The tariff, if approved, would apply to new customers or significant expansions consuming 50 megawatts or more. This filing comes amidst a broader statewide debate in Colorado concerning the best approach to data center development, a rapidly expanding sector. While proponents highlight job creation and revenue for infrastructure upgrades, critics raise alarms about potential price hikes for residents due to data centers' high energy and water usage. Notably, residents in Denver's Elyria-Swansea neighborhood expressed strong opposition during a February 27 meeting regarding a CoreSite data center under construction, citing concerns over costs and environmental impacts. They argued the project was approved "by right" under outdated industrial zoning without adequate public review. In the state legislature, a separate initiative, Senate Bill 26-102, sponsored by Senator Cathy Kipp (D-Larimer County) and Representative Kyle Brown (D-Boulder County), proposes even stricter statewide regulations. It would mandate data centers to cover grid upgrades through long-term contracts or upfront payments and require them to source 100% of their power from new renewable sources starting in 2031. Voting on SB 26-102 has been delayed in the Senate Transportation and Energy Committee. Dan Diorio of the Data Center Coalition, who testified against the bill, contends it would deter industry investment in Colorado. Conversely, a competing legislative proposal aims to establish a Colorado Data Center Development Authority to certify projects meeting specific labor, wage, efficiency, and environmental standards in exchange for a 20-year state sales-and-use tax exemption. Xcel Energy CEO Bob Frenzel indicated on a February 5 earnings call that the company is pursuing similar large-load tariffs in four states, including Colorado, Minnesota, Wisconsin, and Texas. The PUC in Colorado will now open Xcel's filing to public comment and hearings, tasked with balancing grid reliability, affordability for 1.6 million customers, and the state's environmental protection goals while determining the financial responsibility of large new loads like data centers.