The City of Denver is currently negotiating a new 20-year “franchise agreement” with Xcel Energy to replace the current contract, which officially expires at the end of 2026. Because a franchise agreement dictates critical access to public lands and guarantees massive community benefits, it is a highly sensitive contract that requires approval from Denver voters before it can take effect. 

What is the Franchise Agreement?

A franchise agreement is a legally binding contract that grants a utility company the exclusive right to use city streets, alleys, and public rights-of-way to build and maintain its power lines, gas pipes, and grid infrastructure. In exchange for this monopoly access, the utility provides the city with specific financial and infrastructural perks. 

For Denver, the existing agreement yields major benefits: 

• $30 Million Annually: A 3% franchise fee collected on customer utility bills goes directly into Denver’s general fund to help cover city expenditures. 
• Line Relocation Savings: The contract mandates that Xcel move its own equipment out of the way for city construction projects, which has saved Denver an estimated $3 billion in infrastructure costs over the last 20 years. 
• City Operations: Xcel owns, powers, and maintains Denver’s network of streetlights and traffic signals. 

Why the Contract Was Delayed

Mayor Mike Johnston’s administration and Xcel initially pushed to get the new agreement onto the November 2025 ballot. However, the Denver City Council blocked the vote in an unusual 7-to-6 decision. The council forced a delay to pressure Xcel into offering more robust community concessions. 

What is Being Negotiated Now?

With negotiations extending through 2026, the city is leveraging the contract to secure expanded benefits in a companion “community benefits” document. Key focal points of the current round of talks include: 

• Underground Power Lines: Early drafts included an agreement for Xcel to contribute roughly $10 million annually specifically toward burying vulnerable power lines underground. 
• Decarbonization Partnerships: Aligning Xcel’s grid capacity with Denver’s aggressive climate goals, which target reducing heating emissions in residential buildings by 25% and commercial buildings by 50% by 2040. 
• Low-Income Protections: Activists are fighting for dedicated financial aid, home weatherization support, and utility bill discounts to insulate vulnerable families from rising base rates. 

What Happens Next?

City officials had been weighing whether to hold a special election or place the final finalized deal on the November 2026 ballot – just months before the current agreement runs out. 

Because the window for a special election has passed, the final decision rests squarely on the general election ballot. August 2026 is City Council’s final deadline to vote and officially place the 20-year Franchise Agreement on the ballot.

If voters approve the package, the new 20-year franchise agreement will take effect on January 1, 2027, locking in the city’s utility structure until 2046. If voters reject it, Xcel will still keep the lights on, but the city would lose out on tens of millions of dollars in infrastructure funding and franchise fee revenue while a temporary extension is sorted out, pushing future public works and local climate goals into uncharted legal territory.

With the clock ticking toward the November 2026 Ballot, major policy shifts have completely altered the energy conversation.

Breaking News: Denver Halts New Data Centers

On May 18, 2026, the Denver City Council voted unanimously to pass a strict one-year moratorium on new data center construction.

These facilities – massive warehouses full of tech servers – consume overwhelming amounts of electricity and water. Currently, Denver has no specific zoning codes or environmental standards to govern them. The temporary ban halts all new permits while a specialized city task force drafts strict regulations on cooling systems, noise levels, and renewable energy mandates.

While the pause does not impact projects already under construction (like the controversial CoreSite facility in Elyria-Swansea), it successfully blocks future phases and establishes a vital buffer to protect our neighborhood power grid from being overwhelmed by “Big Tech.”

The New Battlefield: Who Pays for Big Tech’s Power?

In tandem with the city’s moratorium, Xcel Energy filed a brand-new “Large Load Tariff” proposal with the Colorado Public Utilities Commission (PUC).

Under this new framework, massive power users (facilities requiring 50 megawatts or more, such as data centers) would be legally forced to pay 100% of the up-front costs for the transmission lines, substations, and new clean energy capacity needed to connect them. It also introduces strict early-termination fees so taxpayers aren’t left holding the bag if a tech facility scales back.

This is a major victory for residential advocacy: it aims to ensure that massive corporate energy demands don’t subsidize their growth by driving up everyday household utility bills.

Current Friction: Profits vs. Prices

The pressure on Xcel remains high following their near-$903 million in Colorado operating profits for 2025. Following an intense round of evidentiary hearings, Xcel reached a major settlement agreement in June 2026 with state regulatory staff and select stakeholders to scale back their original rate requests, though consumer advocates argue it remains a heavy burden on residential users:

 Electricity: A settled proposal of a 5.86% base rate increase (roughly $6.13/month for the average household), down from the original 9.9% request. This is targeted to take effect on August 28, 2026, pending final PUC approval.

 Gas: A proposed 11.4% increase ($7.59/month) targeted for this fall.

To soften the blow, the settlement expands protections for income-qualified households, including $5 million in funding straight from Xcel’s corporate shareholder earnings rather than ratepayer dollars, alongside strict new performance penalties if Xcel’s power grid underperforms.

What’s Staying, What’s Changing?

The 2027–2046 agreement isn’t just a renewal; it’s a modern rewrite.

 The $3 Billion Shield: We are preserving the “Relocation Requirement.” When the city builds a new bike path, sidewalk, or public works project, Xcel—not Denver taxpayers—must foot the bill to move the utility lines. This clause has saved Denver $3 billion since 2006.

 The Undergrounding Fund: A new 1% dedicated fee will generate roughly $10 million annually, specifically earmarked to bury overhead power lines in neighborhoods highly vulnerable to extreme weather and outages.

 Rooftop Solar & EV Backlogs: A new joint Denver-Xcel Innovation Group (DDIG) will give the city a direct seat at the table for grid planning. The goal is to clear the notorious multi-year backlogs that stall local neighborhood EV charging stations and residential rooftop solar integrations.

Why It Matters to You

A franchise agreement only happens once every 20 years. This is the single rarest window where Denver holds the upper hand over its monopoly utility. It’s our best shot to dictate who pays for our 2030 renewable climate goals and ensure our neighborhood infrastructure is resilient for the decades to come.