What does a 500 MW data center owe its utility in a month when it draws little power? About US$22 million as a minimum bill, by Xcel Energy's own estimate for its proposed tariff in Colorado. The Colorado Public Utilities Commission opened evidentiary hearings on that large load tariff on 21 October, with sessions planned over several days, The Colorado Sun reports.
The Terms on the Table
Xcel, the state's largest electricity provider with 1.6 million customers, filed the tariff on 2 April after the commission told it to shield existing customers from data center costs. It covers new customers and significant expansions of 50 MW and more; new customers between 20 and 50 MW may also fall under it.
- An application fee of US$120,000 for the utility's study work.
- The data center pays for the transmission, substations, interconnection upgrades and new generation built to serve it.
- A 15-year contract with payment for at least 80 % of the projected electricity, and monthly minimum bills.
- Financial security, for example 60 months of minimum bills; leaving early means paying the remaining bills.
Commission staff want 20-year contracts, the Data Center Coalition has proposed ten. Xcel expects to need 2 GW of generating capacity for data centers by 2030, against a little over 7 GW of total capacity today.
A Fast Lane Nobody Agrees On
The sharper argument is over a second route, first called "speed to market" and now "custom contracts": confidential deals negotiated between Xcel and a developer, without some of the tariff's safeguards, with commission review inside 120 days. Xcel says large customers need that commercial flexibility and that the core terms on cost and risk would remain. The state's consumer advocate, Joe Pereira, says the short window and the confidentiality leave little room for a real review. The Colorado Energy Office wants custom contracts kept away from gas-fired generation unless they carry a zero-emission path such as carbon capture; Xcel calls a mostly-gas scenario extremely unlikely.
Outside the hearing room, eight cities and counties have adopted or are considering moratoriums or caps on data centers, and a petition with nearly 5,000 signatures reached the commission on 15 October. The pattern is familiar from the east, where FERC turned down PJM's curtail-first plan earlier this month.
Reading It From the Generator Side
A tariff like this is written about grid costs, yet it moves the standby side as well. A developer signing up for fifteen or twenty years of minimum bills will want the energization dates pinned down early, and a 120-day custom contract is attractive because it promises an earlier date. When halls are energized in phases, the generator fleet usually follows the same phases, and so does its air permit.
One question for Colorado developers right now: if the grid connection slips but the halls are ready, is anyone counting on the standby units to carry load in the meantime? That is a permit and fuel question first, and an electrical one second.
Sources: The Colorado Sun, Xcel Energy