Google’s plan to build a $600 million data center in the central Minnesota city of Becker is drawing support from both renewable energy advocates and local government officials fretting the impending closure of a large, coal-fired power plant.
Google proposes to build the 375,000-square-foot data center on roughly 300 acres owned by Xcel Energy next to the Sherburne County Generating Station, the largest coal-burning plant in the Upper Midwest. Xcel will retire two of Sherco’s three generators in the next seven years.
Google is working with Xcel to ensure that electricity used to power the data center will come from renewable sources. Meanwhile, Google officials await word on what state and local tax breaks they could get for the project.
A test of community support will come soon, with Google’s request for Sherburne County and the city of Becker to waive 20 years’ worth of future taxes resulting from the site’s increased property value after it builds the data center.
If the city and county approve, Google would save $7 million to $8 million in county property taxes and $6 million to $7 million in city property taxes, according to city and county estimates.
The tax abatement request is one of the latest developments in the tech giant’s proposal for the data center, which it says would bring new jobs and economic growth to the area.
In addition, state Sen. Andrew Mathews, R-Milaca, and Rep. Shane Mekeland, R-Clear Lake, last week introduced a bill that would provide $20.1 million in state bonding for water, sewer, road and lighting improvements to the Becker business park where the data center would be built.
Sherco has been an important mainstay for the local economy, providing about 300 jobs and three-fourths of Becker’s tax revenue. But Xcel is transitioning away from energy sources that produce greenhouse gases that contribute to climate change and has pledged to produce all its electricity from carbon-free sources by 2050.
The city and county have been looking for new businesses and industries to move to Becker to create new jobs and ease the transition away from a coal-based economy.
In filings with the Minnesota Public Utilities Commission, Google says the data center could create about 2,300 construction jobs for 18-24 months and at least 50 permanent tech jobs.
The PUC will decide whether to approve agreements between Google and Xcel to provide electricity to the data center from two new dedicated wind farms.
Sherburne County Administrator Steve Taylor said the county expects to have public hearings on the tax abatement request in mid-March. He said he thinks county commissioners will be open to the request.
“This will generate a lot of local economic activity that will benefit not only the city and the county, but also the state and the region,” Taylor said.
The Public Utilities Commission received a handful of supportive letters on the Google proposal during a comment period that ended Feb. 15.
Among the project’s backers is Becker Mayor Tracy Bertram, who noted the data center would help alleviate the closing of the two Sherco units, which she said would result in a loss of 150 direct jobs, 250 related jobs and an annual impact of more than $200 million. “The loss of that economic impact is not something the city and the county can easily sustain,” she wrote.
Bertram wrote that the 50 permanent jobs at the data center would have an annual payroll of $4 million, or an average salary of $80,000. She estimates the project’s economic impact on the county will be more than $7 million a year.
A Google data center often attracts other major technology-based companies to invest in the same area, Bertram said.
“Securing one of the few Google data centers in the country would not only provide an immediate boost the local economy, it would showcase our community and the state of Minnesota as a growing technology and data center market,” she wrote.
The project’s use of wind power drew the support of the environmental advocacy nonprofit Fresh Energy.
Google has “pretty stringent carbon and renewable electricity goals that they have a demonstrated track record of delivering on,” said Allen Gleckner, Fresh Energy’s director of energy markets.
Gleckner said it’s getting more common to see large corporations commit to using renewable and carbon-free energy, and the trend is trickling down to medium and smaller companies.
“Consumers want it, and they’re demanding it,” he said. “Investors want it. They’re demanding it of companies and businesses, and now businesses are demanding it from their electricity providers.”
Gleckner noted the proposal also includes an approach that would be new to Minnesota: a “clean capacity” plan. If Google’s energy needs expand in the future, Xcel would work with the company to supply 100 percent carbon-free electricity.
One part of the Google proposal Gleckner wants to see change: its plan to use natural gas to heat the data center. He wants the company to consider using electricity instead, possibly by pumping excess heat generated by the center itself.
The Minnesota Department of Commerce says the project is in the public’s interest and is recommending the PUC approve Xcel’s petition, but with some conditions. It wants Xcel to offer the same renewable energy options to other large customers that commit to using a lot of electricity.
Xcel has requested a decision from the Public Utilities Commission by June 30.
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