Physicians Oppose SB25-280, Data Center Development and Grid Modernization Act
Dear Legislators,
As health professionals serving on the board of Physicians for Social Responsibility's Colorado chapter, PSR Colorado, we ask that you oppose the "Data Center Development & Grid Modernization Act," SB 25-280, because it provides outsized regulatory leeway and tax breaks to technology companies without assuring Coloradans are protected from the well-documented climate, health, water, and energy cost burdens that accompany data center development. Please save Coloradans from consequences facing other states across the nation where utilities have failed to contain data center growth, with consequences known to include: heightened electricity costs; the threat of energy insecurity due to increased energy demands; water insecurity; and health risks from air pollution emitted by fossil-fuel based electric power generation.
We are especially concerned that SB25-280:
Lacks clear and meaningful standards for siting data centers;
Lacks clear and meaningful environmental standards for water usage, ozone production, noise pollution, and potential heat island impacts;
Fails to address cumulative impacts of environmental stressors on surrounding communities;
Lacks a clear and meaningful impact assessment for disproportionately impacted communities;
Threatens the ability of the state to meet its GHG reduction targets, including the Clean Energy Plans that utilities have spent significant time and money implementing; and
Diverts critical funding from public infrastructure by granting data centers a 100% sales and use tax exemption for up to 30 years.
Data centers require an abundance of energy and water to run efficiently. Welcoming them into the state would introduce new competition for scarce water resources, and derail progress already made toward state greenhouse gas reduction goals. Colorado cannot afford to supply data centers’ water-intensive cooling systems, which the US Department of Energy estimated to require 165 billion gallons of water across the country in 2016. Data centers drain resources in water stressed communities because their 24/7 cooling systems consume millions of gallons of potable (drinking) water annually. A single data center can consume up to 5 million gallons of drinking water per day, enough to supply thousands of households or farms.
SB25-280 lacks clear guidance for how data centers in Colorado might use water, demanding only “water stewardship strategies that optimize operational water management”. These concerns are amplified by the fact that few companies are compelled to release proprietary details of their operations, reducing transparency and leaving states and communities with little recourse against indiscretions regarding energy or water use. In a state constantly faced with drought, where 12 out of our 64 counties have USDA Drought Disaster designations, the best water stewardship strategy is to vote “no” on this bill.
SB25-280 also lacks clear guidance for how data centers in Colorado will help the state meet its GHG reduction targets which include reductions in greenhouse gas pollution in Colorado 26% by 2025, 50% by 2030, and 100% by 2050 compared to 2005 levels. While the full text of the bill acknowledges Colorado’s challenges in achieving “clean energy and greenhouse gas reduction goals while maintaining grid system reliability”, it remains unclear how data centers’ investments in grid infrastructure will help alleviate such challenges, especially when data centers are known to consume 10 to 50 times the energy per floor space of a typical commercial office building. The current bill requires “at least 50% of the data center project's energy consumption [be sourced] from renewable and clean sources”. Relative to the centers’ massive energy demands, these lax certificate requirements would lead to an exponential shortfall in state GHG goals, by even simple math.
Another major concern with SB25-280 is its lack of environmental and health protections for disproportionately impacted communities, which are sure sites for future proposals, should the state create tax breaks for data centers.
Due to competitive demands on data centers, hardware is typically upgraded every 3-5 years, leading to the high-scale creation of electronic waste. E-waste contains numerous chemicals and compounds. Both the EPA and the CDPHE consider E-waste a hazardous material that must be disposed of as such. A 2021 study, Health consequences of exposure to e-waste: an updated systematic review list the many E-waste toxic contaminants harmful to human and ecological health, including metals such as lead, cadmium, mercury, and organic compounds such as PFAS, (now illegal to sell or use in Colorado), chlorofluorocarbons, polycyclic aromatic hydrocarbons (PAHs), polybrominated diphenyl ethers (PBDEs), and polychlorinated dibenzo-p-dioxins. Should taxpayers welcome data centers into Colorado, frequent e-waste disposal would require additional regulatory oversight to ensure it follows proper environmental and health guidelines.
SB25-280’s 100% sales and use tax exemption—potentially lasting 20 to 30 years—is fiscally irresponsible and undermines the very infrastructure that data centers will rely on. Sales tax revenues are a cornerstone of funding for Colorado’s schools, roads, and public services. Granting long-term blanket exemptions for data centers—corporate actors that already operate on enormous profit margins—diverts public dollars away from essential services that benefit all Coloradans. Infrastructure such as transportation networks, emergency response systems, and water delivery systems will see added strain from data center development, yet this bill does not require data centers to pay their fair share to support those systems. In effect, this bill subsidizes corporate expansion at the expense of public infrastructure—placing a greater financial burden on everyday residents and local governments.
Other states and utilities have engaged in meaningful dialogue with a broad set of stakeholders to develop thoughtful approaches to balancing the potential costs and benefits of data centers. Unfortunately, the proponents of this bill have not followed that path. The legislature should reject this last-minute bill, which was introduced without sufficient input, would increase costs for consumers, and would provide generous tax breaks when the state is struggling to balance its budget.
As healthcare professionals, PSR Colorado board members respectfully urge members of the committee to reject this short-sighted bill. Any benefits delivered through new jobs and investments in Colorado’s electrical grid will be lost without a clear plan to counter real threats to the environment and to human health.
On behalf of PSR Colorado (Physicians for Social Responsibility),
Beth Gillespie, MD MPH, PSR Colorado Co-Chair
Ken Lichtenstein, MD, PSR Colorado Co-Chair
David Mintzer, MD, PSR Colorado Board Member
Velma Campbell, MD, PSR Colorado Board Member
Kristen Autret, BS, PSR Colorado Board Member
Barbara Donachy, MPH, PSR Colorado Advisory Council
Bridget Foy, MD Candidate, PSR Colorado Board Member
