February 11, 2026
DENVER – A new bill designed to create commonsense guardrails around data center development in Colorado, protect residents and small businesses from electricity rate increases, and ensure data center developers pay their fair share was introduced today to the state legislature.
The bill, Measure to Ensure Accountability for Large-Load Data Centers (SB26-102), is sponsored by Sen. Cathy Kipp and Rep. Kyle Brown. Rather than offer state tax exemptions for data centers, it requires developers to use and develop renewable energy, pay for the full cost of their electricity and any grid investments they require and practice smart water consumption. The bill would make Colorado a leader in enshrining consumer and environmental protections in statute when considering data center development, ensuring responsible industry growth.
“Colorado is already home to large data centers, and many more developers want to build here,” said Senator Cathy Kipp, D-Larimer County. Without some basic protections in place, these projects place too much risk on the shoulders of Colorado families and small businesses. Our bill ensures that won’t happen.”
“Across Colorado, families are already feeling the impact of rising energy costs. Massive data centers add incredible pressure to our power grid and water systems — challenges we can’t ignore,” said Representative Kyle Brown, D-Boulder County. “This legislation gives Colorado the commonsense guardrails we need to protect our communities and guide smart development.”
Key elements of the bill would require that data center developers:
- Pay for the full cost of the electricity and any grid investments they require.
- Maximize and pay for renewable energy to power their operations.
- Practice smart water consumption.
- Require reporting, transparency, and accountability around data center operations.
- Require robust public engagement and pollution protections for disproportionately impacted communities.
“Colorado shouldn’t be the Wild West for data center developers,” said Stacy Tellinghuisen, deputy director of policy development at Western Resource Advocates. “This bill makes them pay their fair share, protects families from higher utility bills, and establishes strong standards for clean energy, efficient water use and community protections. It’s about setting commonsense, responsible guardrails around data center development that puts the needs of Coloradans first.”
Last week, a letter signed by 54 organizations representing Coloradans across the state was submitted to legislators and Gov. Jared Polis asking them to pass policies that hold large technology companies accountable for data center development.
Data center development is on the rise in Colorado even without generous subsidies for data center developers. This is showing up in load forecasts of the state’s utilities. In 2025, for example, Xcel Energy estimated that new data centers could lead to more than a 40% increase in the utility’s peak power demand by 2035. In addition, in Xcel’s recent long-term rate forecast model, commercial and industrial rates are estimated to decline in the next five years, while residential rates may increase by more than 25% in 2031.
“Residential ratepayers of all ages are feeling the pinch as the cost of living rises,” said Sara Schueneman, AARP Colorado state director. “Consumer protections are needed for everyone, including older Coloradans, before they have to make tough budgetary choices – like whether to pay the electric bill, have prescription medications refilled, or put food on the table.”
“Good Business Colorado Association believes that economic growth and community protection go hand in hand,” said Doni Clemens, Director of Good Business Colorado Association. “By requiring data centers to cover their true costs and prioritize renewable energy, we’re ensuring that small businesses and residents aren’t left footing the bills of large-scale industrial development. These safeguards will help Colorado attract responsible development that benefits everyone, not just a select few.”
Data center development is not limited to Colorado’s big cities. More and more developers are shopping around, looking at rural communities that will extend tax benefits to data center construction, even for speculative building.
“Rural communities stand to lose the most if Colorado doesn’t get the data center boom right,” said Barara Vasquez, a Board Member of Western Colorado Alliance in Jackson County. “We need fair rules in place to make sure tech companies can’t drain our river basins dry and strain our electric grid. Even without data center impacts, water scarcity already threatens our way of life and rural electric bills are some of the highest in the state. The industry needs guardrails.”
“A strong data center policy with clear consumer and environmental guardrails is essential for Colorado to ensure rapid load growth doesn’t lock in higher emissions for decades or leave ratepayers bearing the costs” said Alana Miller, Colorado Policy Director for Climate & Energy at NRDC (Natural Resources Defense Council). “Colorado has a unique opportunity to shape data center growth around clean energy investment, fair cost allocation, and protections for communities and workers, rather than allowing unchecked development to drive up bills and pollution.”
“Colorado has the opportunity to be a leader in setting environmental and community protections for the siting of data centers, ensuring Coloradans are not stuck with dirtier air and increased energy costs,” said Conservation Colorado’s Climate Campaign Manager Paul Sherman. “This bill establishes fair, reasonable guardrails to hold data center developers accountable for the impacts they have on Colorado’s environment and community, and provides protections for Coloradans who are disproportionately impacted by pollution and rising costs – the effects of which are most acutely felt in Latino, black, brown and low-income communities.”
“Data center tax breaks have exploded into runaway giveaways in other states, prompting lawmakers to rein them in — but in Colorado, we don’t have that option,” said Kathy White, Executive Director of Colorado Fiscal Institute. “SB26-102 prioritizes Coloradans because it doesn’t lock in massive subsidies for some of the most profitable companies in the world while families struggle with rising costs and underfunded schools and healthcare.”
Media Contacts:#
James Quirk | WRA | 908.902.3177 | james.quirk@westernresources.org
Hannah Morris | CFI | morris@coloradofiscal.org
Kari Birdseye | NRDC | kbirdseye@nrdc.org
