Colorado killed its only data center water bills. Cities are filling the gap themselves.

By Shaina Cole | Contributing Writer, Rocky Mountain Voice

Colorado spent a year trying to answer a basic question: should companies building massive AI data centers be required to disclose how much water they use?

The answer, as of May 11, was no.

Senate Bill 26-102 would have required operators of new large data centers to report annual water use to state health officials. A companion measure, House Bill 26-1030, sought to attract data centers through voluntary tax incentives tied to water efficiency standards. HB26-1030 died in committee on May 7. SB26-102 followed four days later.

238 lobbyists registered positions on one or both bills on behalf of 221 clients, according to Secretary of State records. Five days after the legislature adjourned, Denver City Council unanimously passed a one-year moratorium on new data center construction, naming water consumption as one of the things the city will now regulate — joining Aurora, which has enforced its own data center water restrictions  since 2023. The next day, Jefferson County voted on a similar temporary ban. 

What SB26-102 required

SB26-102 started as a disclosure requirement. Operators of new data centers drawing more than 30 megawatts had to report annual water and energy use to the Colorado Department of Public Health and Environment by June 2028. No certification process. No opt-in. Every qualifying facility would have had to report.

By May, the bill had grown considerably larger to include renewable energy matching, community benefit agreements, labor standards and a competitive tax incentive added in a rewritten version distributed over the final weekend. Kipp proposed it be postponed indefinitely. The Senate Transportation and Energy Committee voted 9-0, at her request.

“We were trying to make sure that we had reporting on water use, water efficiency, wastewater management, wildlife habitat protection.” Kipp later added, “Colorado communities are deeply worried about what this unrestrained development means for their water, their air quality, their electricity bills, their farmland, and their neighborhoods.”

Committee chair Sen. Lisa Cutter said, “We also don’t have any guardrails for data centers, which is really, really troubling. There’s so many things about that that are scary with water use and land use.”

At the committee hearing, Kipp said the bill would return next session.

Who opposed it — and when

The lobbying picture that emerges from Secretary of State records is more specific than industry versus environmentalists.

Vantage Data Centers registered five lobbyists opposing SB26-102 on the first day of the session. TRACT, a Denver-based company that acquires land for data center development, registered opposition and spent $169,500 lobbying. Crusoe Energy Systems — whose $200 million modular data center factory in Brighton was announced in March and praised by Governor Polis — opposed SB26-102 and spent $125,000 lobbying.

Then there were the final-day registrations.

Core Electric Cooperative registered opposition on May 11 — the day of the final committee vote. Colorado Secretary of State income disclosure records show Core Electric has maintained a continuous lobbying presence since at least July 2021, cycling through multiple firms. Its current firm, Brownstein Hyatt Farber Schreck, has represented Core Electric since late 2024, receiving between $6,250 and $7,641 per month. Combined payments across all lobbyists over the period total $359,515.90, according to Secretary of State records. 

The Integral Group, an engineering and consulting firm specializing in data center design, registered opposition on May 9 and 10, through Holland & Knight. The firm paid $31,200 in March and $10,000 in April — $41,200 in the bill’s final two months.

Teamsters Local 455 registered opposition on May 11 as well.

That same week, former Colorado Springs Mayor John Suthers — now a Brownstein Hyatt shareholder — agreed to take Raeden as a client, according to the Gazette. Raeden is proposing a 50-megawatt data center near Garden of the Gods Road. Brownstein Hyatt represents Core Electric Cooperative, which registered last-minute opposition to SB26-102, and Raeden, which is proposing the data center facing the most active community opposition in Colorado Springs.

What cities are now doing

Denver Water registered three lobbyists to monitor SB26-102 throughout the session. It did not register a supporting, opposing or amending position on the bill, which would have required large data centers to disclose how much water they draw from Denver Water’s own system.

In April, Denver Water told RMV that the utility “believes it is vitally important to fully understand the effects of data centers on water delivery and supply.” At the time, Denver Water confirmed it does not know what percentage of the CoreSite DE3 campus’s estimated 235,000 gallons per day will evaporate — the portion that leaves the water cycle permanently.

Asked this week why Denver Water monitored SB26-102 rather than taking a position on water reporting provisions, spokesperson Todd Hartman responded by stating that, “The bill in question contained myriad components, some unrelated to water. While Denver Water sees water usage reporting as a positive step, we approach any bill that proposes statewide policy upon local matters with great caution. We evaluate every bill on its merits and impacts and will do so again should legislation return in 2027.”

Denver City Council voted unanimously on May 18 to pass Council Bill 26-0431 — a one-year moratorium on new data center permits and site development applications, effective May 21. The ordinance names water consumption alongside noise, air quality and placement as issues a working group must now address. Denver has no zoning code specific to data centers, no energy requirements and no water-use regulations.

CoreSite’s Phase 1 building in Elyria-Swansea is exempt with construction already underway. The two additional planned buildings on the same campus are not.

Council President Amanda Sandoval said at the vote: “I just want to say to the members and residents in the Globeville Elyria-Swansea neighborhood, I’m sorry that I did not stop that data center when we were asked for a $9 million tax incentive.”

Jefferson County also voted May 19 to impose a moratorium on new data center applications and zoning while they weigh environmental impacts with economic benefits. Their moratorium is in effect through March 2027.

City leaders in Longmont are expected to vote as early as June 9 to ban data centers that use 100 megawatts or more of electricity at their peak. City Council member Matthew Popkin stated, “I think it is critical that we not just see the positives there and make sure that we’re prepared for the risks, especially in a region that’s facing greater challenges every day, from fire risk to drought and to water consumption as well.”

In Colorado Springs, residents are fighting the proposed Raeden facility through the city’s planning process. A second community meeting on May 14 drew more than 500 residents. Afterward, Jason Green, co-founder and president of Raeden, confirmed to KRDO the yelling will not stop the company from pursuing the project. He said he does not plan to hold additional community forums. No planning commission vote has occurred to date.

What the session left behind

The Colorado Public Utilities Commission is now the only state-level body with authority over data centers. It covers energy costs and rate structures. It has no authority over water use.

Denver Water’s reservoirs stood at 79 percent capacity as of May 11, against an 85 percent average. The utility began draining Antero Reservoir in May — saving enough water to supply roughly 15,000 to 20,000 households for a year by moving it to Cheesman Reservoir to prevent evaporation. The last time Denver Water drained Antero was 2002.

Nathan Elder, Denver Water’s manager of water supply, said, “When we were in a drought in 2002, we also drained Antero Reservoir. This one’s shaping up to be much worse, though, than it was in 2002.”

A Conservation Colorado poll of 800 likely 2026 voters in April found 91 percent support for policies protecting ratepayers, communities and natural resources from unrestricted data center growth. Kipp cited the number before moving to postpone her own bill.

“The people who commissioned the poll thought that they got the wrong numbers when they heard about this poll because, like, nothing gets 91 percent,” Kipp said. 

The legislature adjourned May 13. Denver acted on May 18. Jefferson County acted on May 19. Aurora acted in 2023. Longmont may not be far behind. 

According to the Colorado Municipal League, the state has 273 cities and towns. What happens in the rest of them is still an open question.