Colorado’s Record Low Snowpack Puts Farms and Data Center Plans on Collision Course
Why It Matters
Colorado is experiencing its worst snowpack on record, with statewide mountain snowpack sitting at just 19% of the historical median this spring. The crisis is forcing a difficult policy question: as the state legislature debates tax incentives to attract water-intensive data centers, farmers along the Colorado River are warning they may not have enough water to save their orchards before winter.
The strain reaches far beyond Colorado’s borders. Downstream states, including Arizona and California, are already lobbying for a renegotiation of the Colorado River Compact — the 1922 agreement that allocates river water by fixed acre-foot amounts rather than by a percentage of what the river actually produces.
What Happened
Neil Guard and his wife, Diane Brown-Guard, have farmed a small property on the Colorado River between Palisade and Clifton for the past 30 years. Their operation includes nine acres of grapes across 13 varieties and six acres of peaches. In a normal spring, Guard said, the river would be running fast. Last week, he said he could put on boots and walk across it — describing the current state as looking “like an irrigation ditch.”
The situation is compounded by years of absent monsoon seasons. Farmers in the region rely on late-summer river draws to give crops a final surge of water before harvest and to prepare fruit trees for winter. Guard said he is uncertain whether that water will be available at all this season. “I’m not sure we’ll have water before winter this year,” he said, according to reporting by The Colorado Sun.
Emergency reservoir releases are already being planned. Authorities intend to draw down water from Flaming Gorge, Navajo, and other reservoirs to prevent Lake Powell from reaching what is known as “dead pool” — the level at which water can no longer flow downstream through the dam.
By the Numbers
- 19% — Colorado’s statewide snowpack as a percentage of the historical median, the lowest on record
- Up to 5 million gallons per day — estimated water consumption of the data centers for which lawmakers are considering tax incentives
- 15 acres — combined acreage of Guard’s grape and peach operation (nine acres grapes, six acres peaches)
- 3 acres — peach trees Guard replaced this season with younger plantings, which require less water while establishing
- 1922 — year the Colorado River Compact was signed, the agreement now under pressure for renegotiation
The Data Center Debate
At the Colorado state legislature, two competing measures related to data centers are under discussion. One proposal would offer tax incentives to attract data center development — facilities seen as critical infrastructure for the rapidly expanding artificial intelligence industry. A second measure would attempt to regulate data centers’ water and electricity consumption to limit environmental impact.
Critics of the incentive proposal argue that attracting an industry capable of consuming up to 5 million gallons of water per day is difficult to justify in a year of record drought. Colorado lawmakers have also been weighing separate AI regulations focused on consumer disclosure requirements, underscoring the broader policy tensions surrounding the technology sector’s rapid growth in the state.
Guard’s decision to replace three aging acres of peach trees with young plantings — which require less water as they establish — may provide a modest buffer this year. Younger trees produce fewer leaves, meaning less water lost to transpiration. But if river levels remain too low to irrigate those trees before winter, he risks losing them entirely. “That would be really bad,” he said, according to The Colorado Sun.
Zoom Out
Colorado’s water crisis is part of a broader, decades-long drought across the American West. The Colorado River Compact has long allocated more water than the river reliably produces, and calls for renegotiation have grown louder as reservoir levels fall. The conflict between agricultural water rights and the demands of technology infrastructure is not unique to Colorado — similar debates are playing out in other western and southeastern states as data center construction accelerates nationwide. Colorado’s cost of living pressures have added further urgency to rural economic development proposals, making the promise of data center jobs politically attractive even as water constraints tighten.
What’s Next
The fate of the data center tax incentive legislation and the companion regulatory measure remains before the Colorado legislature. On the river, emergency reservoir releases are expected to proceed as managers work to stabilize Lake Powell. Guard and other farmers in the Palisade and Clifton area are watching late-season precipitation forecasts closely, with some meteorologists pointing to signs of a developing El Niño pattern in the Pacific as a potential — if uncertain — source of relief. Many farmers in the region are already selling operations or working second jobs to stay solvent as agricultural risk in the Colorado River Basin deepens.