Why does steam rise from manholes in Denver?

For the same reason your roof might leak. Also, from water on, rather than in the pipes.

Planting Steam can come from manholes for several different reasons. The most common is water infiltration into the manhole. Water comes in contact with the hot steam main and causes vapor. Another source is leaks, either within the manhole or on buried piping between manholes. There is no “natural” venting process