Stop HB26-1030: Why Colorado Shouldn’t Give 20-Year Tax Breaks to Data Centers

Colorado’s Data Center Boom? The Troubling Reality Behind HB26-1030

This post is about Colorado’s current legislative session and a bill we find deeply concerning: HB26-1030, which is designed to promote the construction of large data centers in our state. On February 12th, this bill will be brought before the legislature for a hearing.

HB26-1030 would grant companies that build data centers in Colorado 20 years of tax incentives, with the possibility of extensions. The bill briefly acknowledges the issues of water use for cooling (already a scarce resource here) and power consumption, but the safeguards are minimal.

For example, the section that is supposed to protect residents from higher energy costs only requires regulators to work “to ensure the data center will not cause unreasonable cost impacts to other utility ratepayers.” That’s hardly reassuring and will most likely result in having us, the taxpayers, footing the bill.

In practice, these facilities typically create only a few dozen permanent jobs once construction is finished, and construction itself offers only short-term employment. The long-term tradeoff looks poor: higher energy rates, housing pressure during build-out years, and decades of massive warehouse-style buildings that contribute little in taxes while operating almost entirely automatically, while adding a huge amount of additional demands our already strained energy grid.

Data centers concentrate a huge amount of electrical equipment, backup power, and cooling infrastructure in one place, which creates unique fire risks that are a bad fit for Colorado’s dry, fire‑prone environment. 1. Massive electrical load and battery risk

Data centers pack in dense server racks, high‑voltage lines, and complex power distribution systems, which increases the chance of short circuits, overloaded systems, or arc flashes that can ignite fires.

Many large facilities rely on vast banks of lithium‑ion batteries for backup power; when those fail, they can overheat, vent toxic gases, and even explode, making fires harder to control and more dangerous for firefighters.

2. Harder for firefighters to fight safely

Data centers often have maze‑like interiors, secure perimeters, and equipment that reacts badly to water, so firefighters can’t treat them like a normal building fire and have to move more slowly and cautiously.

The mix of live high‑voltage equipment, backup generators, and batteries creates electrocution hazards and can limit where crews can safely operate, which can let a fire grow larger before it is contained.

3. Scale and location magnify wildfire risk

Modern data center campuses can cover hundreds of acres, with multiple large buildings packed with combustible cabling, plastics, and equipment; a serious fire at that scale can generate intense heat and embers.

In a dry, windy Colorado Front Range setting, a poorly controlled fire at a big campus on the urban edge could increase the risk of embers or secondary ignitions that contribute to fast‑moving wildfire conditions.

4. Strain on already stressed water and power systems

Fire protection for huge buildings requires strong, reliable water pressure for hydrants and suppression systems, competing with community needs during drought or high‑demand periods.

Data centers are already among the most energy‑intensive building types; when a fire damages power infrastructure, it can trigger broader outages or grid instability during critical periods like heat waves, when wildfire risk is already elevated.

5. Cumulative risk as more are built

Nationally, the number and size of data centers are booming, and experts note that even if individual fires are relatively rare, the sheer growth of facilities means fire‑related incidents are expected to rise.

In a state already grappling with worsening wildfire seasons, adding multiple mega‑facilities with complex electrical and battery systems increases overall fire risk exposure for nearby communities and first responders.

If you share these concerns, please consider emailing your Colorado House and Senate representatives to voice opposition to HB26-1030 (include the bill number in your subject line). It’s unclear whether the hearing will be open to the public, but attending would be ideal if possible. I’ve already contacted my representatives, and while the initial response defended the bill, more public pressure could make a difference.

You can also contact the bill’s sponsors—Representatives Alex Valdez and Monica Duran, and Senator Kyle Mullica—as well as House and Senate leadership, Governor Polis, and Senator Michael Bennet (who’s currently running for governor). To find their contact info, use the official “Find My Legislator” tool: https://leg.colorado.gov/find-my-legislator.

This issue deserves full public debate. It’s exactly the kind of major decision that should go to the statewide ballot this November, not pushed through quietly under pressure from corporate lobbyists looking to benefit large tech interests.