The Independence Institute submitted written testimony on HB26-1030, “Data Center & Utility Modernization,” which will be heard in the Colorado House Energy & Environment Committee tomorrow, April 24, 2026, at 1:30 p.m., pending any further schedule changes.
The bill has been frozen for three months while behind-the-scenes compromises emerged. HB26-1030 is one of two competing bills which presents a choice for Colorado between bad and worse for the industry. The Sum & Substance reported that the bill has been rewritten and an amendment will likely be introduced at this hearing, which seem to retain some of the worst provisions of the introduced draft.
You can read the transcript of the Independence Institute’s testimony below, which reflects the bill as it was introduced. We’ll be tuning into the hearing here.
Testimony of the Independence Institute on H.B.26-1030
Chair Valdez and members of the House Energy and Environment committee,
My name is Sarah Montalbano, and I’m an energy policy analyst with the Independence Institute’s Energy and Environmental Policy Center, a free market think tank based in Denver, Colorado.
I’m testifying to describe the shortcomings of HB 1030, which acknowledges that data centers are “essential critical infrastructure.” I agree. But this bill then creates a new bureaucracy, imposes burdensome labor and workforce requirements, and dictates the energy mix that data centers must use.
Enterprise-level data centers require 99.995 percent uptime, or a maximum of 26 minutes of downtime per year. [i] That demands dispatchable, reliable power available 24/7, regardless of weather or time of day.
The bill requires a 3-to-1 ratio of “clean” nameplate capacity to thermal nameplate capacity before 2039, and 100 percent after 2040. But nameplate capacity is not the same as delivered energy. In 2023, natural gas combined-cycle plants delivered power at a 50 percent capacity factor and can ramp on demand. Solar came in at 25 percent and wind at 36 percent. Batteries are worse because they don’t generate energy, they can only store it.
What’s more meaningful is accredited capacity, which the bill references once — requiring “sufficient accredited capacity” for reliability — but then calculates required ratios based on nameplate. To meet HB 1030’s ratios, developers would need to overbuild capacity that still can’t guarantee the uptime these facilities require.
HB 1030 will also be a litigation nightmare. Developers will fight for the multipliers attached to the definitions of “standalone” battery systems and hybrid storage with solar. And ratepayers will be subjected to the undefined portion of costs that are their “fair share,” forcing Colorado families and businesses to subsidize massive excess generation capacity.
On top of energy mandates, the bill creates a nine-member data center development authority with the power to certify and decertify data center projects. Of those nine members, only two are required to have experience in data center development. Developers would need to submit annual compliance reports to maintain certification and losing it could jeopardize billion-dollar projects. That’s an astounding amount of new bureaucracy and regulatory risk for an industry this bill claims to support.
If companies can’t comply, or decide it’s more economical to not comply, they can gain certification by funding “advanced clean carbon technologies via either a clean transition tariff or through utility-administration funding programs.” That’s a backdoor carbon offset requirement for the data center industry, letting companies buy environmental indulgences that help government fund its preferred technologies.
The only companies that can absorb the bureaucracy and compliance headaches of HB 1030 are the hyperscalers — Amazon, Meta, Microsoft, and the like. Smaller data center developers won’t be able to compete. At best, HB 1030 will merely clear the field in Colorado for a handful of trillion-dollar corporations.
Those companies that do succeed in jumping through HB 1030’s hoops will earn 20-year sales and use tax exemptions on qualified purchases. Those will come out of the TABOR surplus, unfortunately, which means Colorado taxpayers will foot the bill.
If the committee wishes to truly support data centers of all sizes, they should consider consumer-regulated electric utilities (CRE), which are utilities that operate independently of the state-regulated public utility system while remaining subject to environmental, safety, and workplace laws and regulations. CRE would allow private companies, like data centers, to build quickly and innovate. And by remaining off the grid, ratepayers are insulated from any possibility of data centers raising their rates.
Colorado’s neighbors aren’t imposing new regulatory burdens on data centers. Data center investment is mobile, and companies will go where they can build reliably, affordably, and with speed and regulatory certainty. If HB 1030 passes as it stands today, they won’t be coming to Colorado. Thank you for the opportunity to testify.
Sarah Montalbano
Energy Policy Analyst
Independence Institute
[i] “Tier 4 Data Center | Sunbird DCIM.” n.d. Www.sunbirddcim.com. https://www.sunbirddcim.com/glossary/tier-4-data-center.
