Pine Island Data Center Raises Electric Cost Concerns to Attorney General Keith Ellison

The Minnesota Attorney General’s Office is raising new concerns about Google’s proposed data center in southeastern Minnesota, which could intensify opposition to the controversial megaproject.

Attorney General Keith Ellison said Google’s deal with Xcel Energy to power the massive Pine Island hyperscale data center could force other Xcel customers to pay millions, if not more than a billion dollars, in additional costs.

In comments filed Thursday with the Minnesota Public Utilities Commission, Ellison notes that state law requires that “all costs attributable to very large customers of the utility” be allocated to those large customers and not other ratepayers. But Ellison says the deal between Xcel and Google doesn’t specifically protect other residential and business customers.

“The Attorney General’s Office asserts that Xcel has failed to establish that Google’s (deal) is reasonable, consistent with the public interest, or meets the strict requirements of applicable law,” Ellison’s office wrote in a press release.

The attorney general wades into the contentious debate over data centers as he runs for re-election in a tight race against Republican Ron Schutz, a Twin Cities attorney. Opposition to data centers across Minnesota and across the country is reshaping politics and campaigns on both the right and the left, spurring political newcomers to run for office and putting pressure on incumbents as the November midterm elections approach.

For now, it appears that Ellison and Schutz are in agreement. In an MPR News debate Friday between the two candidates, both agreed that it is the attorney general’s responsibility to intervene if a data center deal does not comply with state law and places the burden of energy costs on Minnesota households.

In Ellison’s comments to the Public Utilities Commission, he argued that the Pine Island deal between the tech giant and the power company was out of compliance. He says it would put residential ratepayers and small businesses at risk of incurring increased electricity costs after Google’s 15-year contract ends. If Google were to end its contract early, Ellison says the risk to other utility customers would be even greater.

“Xcel should take steps to complete the filing to ensure that all costs attributable to Google’s data center service are borne (sic) by Google, as required by law,” Ellison’s office said.

In comments to the Public Utilities Commission, the attorney general’s office also expressed concerns about the deal’s lack of transparency, citing several deletions made by Xcel in the document that hid information about Google’s service costs.

“Google’s data center electricity service could have significant impacts on other Xcel ratepayers, including Minnesota households,” Ellison’s office wrote. “Xcel, however, removed almost all dollar amounts of these potential impacts and did not provide specific explanations for some of its deletions.”

Xcel Energy told MPR News it disagreed with Ellison’s view on the proposed deal with Google, saying she made it clear that all large energy users, including data centers, must pay for it themselves without adding costs to other customers or affecting reliability.

Xcel spokeswoman Megan Boldt said that includes paying for additional infrastructure. She said that for the Pine Island data center, Google agreed to finance 1,900 megawatts of new clean energy resources, including wind, solar and battery storage, at no cost to existing customers. Boldt said Google also pays its fair share of the existing system costs, which brings significant benefits to Xcel’s existing customers.

“Xcel Energy is committed to transparency and protecting our customers throughout this review process,” Boldt wrote in an emailed statement. “We are in the early stages and will continue to fully participate and provide information consistent with the requirements of the Public Utilities Commission.”

“Growing demand for energy presents a tremendous opportunity for Minnesota, but it must be done responsibly. Our agreement with Google is a model for how utilities and large energy users can work together to support economic growth, accelerate clean energy and protect existing customers,” Boldt added.

In public comments that Google submitted to the Public Utilities Commission earlier this week, the technology company emphasized that the deal with Xcel was “firmly in the public interest and fully complies with Minnesota (law).” A company spokesperson declined to share further.

Ryan Companies, the developer of the Pine Island data center, has not yet responded to MPR News’ request for comment.

What are the next steps?

Under state law, the Public Utility Commission can approve, modify, or reject a proposed electric service agreement between a utility and a very large customer. The commission will consider whether or not the deal is in the public interest and whether provisions are included to ensure the “very large customer” bears the costs and other customers do not run the risk of having to cover additional costs in the future.

The Attorney General’s Office filed its first comments as part of the commission’s public comment process. At the end of this comment period, Xcel will have the opportunity to respond to the PUC. The commission will make its decision once the public comment period has concluded.

Google’s data center project is already on hold, even though the Pine Island City Council approved it, while a judge considers the merits of a lawsuit seeking further environmental review.