Data centers have come out of seemingly nowhere to potentially reconfigure the landscape of electricity generation in Colorado and many other states. In some places, they\u2019re talking about keeping coal plants running to keep up with the growth in demand.<\/p>\n

The most telling statistic arrived last October when Xcel Energy filed a plan with state regulators that predicted a rapid rise in new electrical demand after two decades of modest growth.<\/p>\n

Fleets of new electric vehicles? Many thousands of new air-source heat pumps? Yes, they figure in. Data centers, though, constitute 72% of the new peak demand projected by Colorado\u2019s largest electrical utility. The company wants to spend $22 billion in Colorado over the next five years<\/a> to help prepare.<\/p>\n

Colorado already has about 60 data centers between Fountain and Longmont, according to Baxtel<\/a>, an industry tracking website. But Pueblo has none. Colorado lawmakers would like that to change.<\/p>\n

A bill at the Colorado legislature this year proposes to add more carrots. House Bill 1177 would allow Colorado\u2019s two investor-owned utilities — Black Hills Energy, the electrical provider for Pueblo, and Xcel Energy — to offer reduced electrical rates for up to 25 years and for demands of up to 40 megawatts.<\/p>\n

The new bill also allows for reduced rates for consumers of larger volumes of electricity, such as needed for giant warehouse-sized data centers, but only after scrutiny by the state\u2019s Public Utilities Commission<\/p>\n

Xcel Energy, in a filing with the PUC in late February, said it has decided to stop using lower-cost electricity, called economic development rates, to elicit new business. Obviously, it has plenty of new demand to meet. After all, Vail Resorts doesn\u2019t discount lift-ticket prices on powder days.<\/p>\n

An existing law passed in 2018, when few of us were thinking about data centers, allows utilities to offer 10 years of reduced rates for loads of up to 20 megawatts. It has worked for Xcel, but witnesses told a legislative committee that it\u2019s not enough for the Pueblo area.<\/p>\n

This bill likely will pass. It has two Democratic sponsors from Pueblo and a Republican from Trinidad. It\u2019s being pitched as a vehicle for economic development in a place that lags the state\u2019s overall prosperity. The administration of Gov. Jared Polis testified in support on Feb. 26 at the bill\u2019s first committee hearing.<\/p>\n

Seeing the writing on the wall, representatives of several environmental groups have asked for amendments. They want assurances that lower-cost electricity isn\u2019t subsidized by homeowners and other businesses. They worry about whether Colorado can meet its greenhouse gas reduction goals.<\/p>\n

\u201cIt\u2019s really become kind of the new boogeyman in the energy world,\u201d said State Rep. Alex Valdez, a Democrat from Denver, at the legislative hearing.<\/p>\n