How a large load tariff could work for Xcel
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To handle surging data center power use, Xcel Energy is turning to a tool that's gaining traction nationwide: a large load tariff.
Why it matters: The tariff could help alleviate costs for households and prepare utility companies for a spike in energy demand from power-hungry data centers driven largely by AI.
Catch up quick: Xcel Energy this month submitted a proposal to the Colorado Public Utilities Commission (PUC) to use the large load tariff to ensure customers don't subsidize the significantly larger sites.
- The regulation would require large electricity users pay for their needs by setting rates, terms and conditions, Xcel said in a statement.
- These tariffs would apply to new customers requiring electric loads equivalent to powering thousands of homes every year.
How it works: "A large load tariff is like a seat belt with extra safety provisions," Ann Collier of the nonprofit Smart Electric Power Alliance (SEPA) tells us.
- The increasing size of data centers is driving more utilities to consider such levies as they grapple with higher power volume, Collier adds.
The intrigue: The plan comes amid growing public opposition to data centers, including in Denver and Colorado Springs, where residents have balked at proposals and planned data center developments.
- Elected officials in Denver are seeking a one-year moratorium on building new data centers, which could be approved by the Denver City Council as soon as next week.
- Meanwhile, Colorado lawmakers are debating incentives and guardrails for these sites.
Zoom in: 60 electric utilities in 36 states have created large load tariffs, per SEPA.
Between the lines: Collier's nonprofit partnered with the North Carolina Clean Energy Technology Center to create the Database of Emerging Large-Load Tariffs to track these tariffs.
- The database shows two examples in Colorado: one approved by Colorado Springs Utility this year and another considered by Black Hills Energy, which operates in Southern Colorado.
Zoom out: The PUC hasn't set a timeline for the tariff's consideration.