DENVER — Xcel Energy recently submitted a proposal to the Colorado Public Utilities Commission to address the growth in customers with large electricity needs, such as data centers, with a focus on ensuring existing customers do not subsidize large new customers. The proposed Large Load Tariff would put requirements in place that would allow the company to serve these new customers and support Colorado’s economic development while ensuring data centers and other large electricity users pay their own way.
“We understand and share customer concern over the immense energy needs of new, large customers, such as data centers. At the same time we recognize these large customers bring the potential for jobs, investment and innovation to our communities,” said Robert Kenney, president of Xcel Energy—Colorado. “Addressing those concerns by updating rules and policies will help make sure we manage this growth responsibly as we protect customers. This will benefit all customers as we continue to deliver the dependable, safe and low-cost electric service they expect.”
If approved, the new regulations will ensure big electricity users pay for what they need and costs do not shift to other customers. It sets the rates, terms and conditions under which Xcel Energy will provide service, including what costs these customers are responsible for paying.
Under the proposal, large customers would pay for the power infrastructure needed to serve them. This includes covering electric transmission, substations and interconnection upgrades as well as paying for new electric generation. This ensures that existing customers are not paying for the needs of the large load customers.
In addition to creating both construction jobs and long-term tech careers, communities benefit from new development because data centers generate tax revenue that helps fund things like schools, public safety, emergency services and local infrastructure. A typical data center is estimated to pay $2 million to $16 million in property taxes each year depending on the size and operations of the facility.
The proposal also creates new pathways for data centers and other large customers to pursue innovative, carbon-free power that supports the state’s clean energy and greenhouse gas emission goals. Other protections for customers include:
- Contracts and agreements: Large customers must execute Interconnection Agreements and Energy Service Agreements before they can receive electric service.
- Minimum monthly payment requirement: Large customers contribute toward the cost of infrastructure constructed and available to serve them, even if load ramps up gradually.
- Long-term commitments and risk reduction: Large customers must make long-term contractual commitments — typically 15 years or more. Financial security requirements add extra protection if a project is delayed, scaled back or not completed.
- Exit or termination provisions: If a large customer exits service early, termination charges will recover remaining costs of project-specific upgrades built, avoiding stranded costs for other customers.
If approved, this tariff would apply to new customers or significant expansion of existing electric load of 50 megawatts (MW) or more. New customers using between 20 and 50 MW may also be subject to the tariff.
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