Colorado regulators are hearing Xcel's plan to make data centers pay their own way on the grid. Here is what is in it

Colorado's Public Utilities Commission began several days of hearings on October 21 on how Xcel Energy should charge data centers and other very large new customers, The Colorado Sun reported. Xcel filed the tariff in April at the commission's direction, with the stated aim of keeping the cost of serving these loads off ordinary customers' bills. No decision date has been set.

What does Xcel propose?

• Who it covers: new loads of 50 megawatts or more, with a $120,000 application fee.
• Cost assignment: Xcel would study the grid costs each project creates and assign new generation and transmission costs to it.
• Contract length: 15 years. PUC staff argue for 20; the Data Center Coalition wants 10.
• Minimum bills: customers would pay for at least 80% of projected electricity use. In Xcel's example, a 500-megawatt data center would owe about $22 million a month at minimum.
• Collateral and exit: roughly 60 months of minimum bills as collateral, and an exit fee equal to the remaining payments on the contract.

Where is the disagreement?

The sharpest fight is over a speed-to-market path, now called custom contracts, that would allow confidential deals with quick approval and might not include every safeguard. Parties would have 120 days to review each one. The state's Office of the Utility Consumer Advocate says confidentiality and short windows make outside review difficult, and clean energy groups warn the option could undercut the tariff. The Colorado Energy Office wants new gas-fired generation for these loads barred unless it has a path to zero emissions. Xcel calls its plan a balanced middle ground and says gas-heavy custom contracts are extremely unlikely.

Why it matters for household and business bills

Xcel serves about 1.6 million customers in Colorado and expects to need about 2 gigawatts of new generation for data centers by 2030, against just over 7 gigawatts of current capacity. If those costs are not assigned to the data centers, they show up in everyone else's rates. Our earlier report on the data center backlash over electricity bills explains why this question has become political in several states.