COMMENTARY: Why are local energy consumers subsidizing data centers?

 

 

Large technology companies like Google, Apple, and Meta have been aggressively lobbying the governor, legislators, local elected officials, and union leaders, to secure support for opening data centers in Minnesota. These companies claim data centers will create lots of new jobs and bring economic prosperity to our state.

The truth is, these data centers will create very few permanent jobs, but will create staggering costs for electricity ratepayers and everyone else across our state.

These costs include higher electricity rates, higher water bills, decreasing property values near these mega developments, environmental degradation, and stress and demand on myriad local public systems. These centers are a terrible deal for all Minnesotans. Almost all the benefits accrue to the richest companies in the world.

Minnesotans have many good questions about this scam:

• Who will pay for the infrastructure needed to run the power plants to run the data centers? Who will pay for the transmission lines, the storage infrastructure, the water cooling systems, the robust security systems, the off-site back-up sites?
• How much will the energy price go up for regular consumers?
• Who will monitor environmental pollution?
• How many permanent local jobs are they actually creating?

In Minnesota, the governor, state legislators, local elected leaders, and the Public Utility Commission PUC are involved in these decisions. All of these leaders, with the exceptions of the PUC commissioners, are elected by us, the consumers. So, in Minnesota we have some power over what these corporations can do.

We can and we should get involved in the decisions about welcoming data centers into our state.

To give you an example of how data centers guzzle energy, in Virginia — the state with the highest growth of data centers — the demand for energy is projected to grow by 85 percent by 2030. A data center that runs continuously could use 100 MWH per day. That is the equivalent of the energy consumed by 62,500 residences — about the size of Rochester.

Although a data center uses the same volume of energy that is used by the entire residential community of Rochester, the company will not pay the rates, fees, or taxes equivalent to 62,500 residences.

Ratepayers not only subsidize the cost of energy data centers, they also pay for the expansive infrastructure that is needed to generate and transmit energy used by the data center. They pay for maintenance of roads, water waste, and the cost of every activity related to their business.

Data centers constantly replace their servers and electronics, which leads to significant electronic waste that goes to the local waste facilities — also paid for by local taxpayers. They use millions of gallons of water to cool systems, depleting local water sources.  They create temporary jobs during the construction phase but few permanent jobs.

Data centers often buy and build on large plots of land in small communities, where they pressure local representatives to implement changes in land and water use, triggering dramatic changes in property prices that create problems for local businesses. They often require security measures and protections from local safety and fire departments that are paid by local taxpayers.

Home owners, business owners, and farmers in the areas where the data centers are located will pay a high price in many ways. We often think about the high price of our utility bills, which will become unaffordable for many people after these centers move into our state and become the preferred customer for utility companies. And there are no tax benefits to the communities they move into.

Yes, data centers may create some temporary construction jobs, and few more permanent technical jobs, but are they worth the price local communities and rate payers pay in perpetuity? I don’t believe they are.

Minnesotans need to ask who is truly benefiting from the growth of these large corporations, and what is the real price we are paying for the creation of the few jobs for people that may not even live in our communities.

Let’s ask the governor, legislators,  and the Public Utility Commissioners to speak for us, the average consumer who deserves to be able to afford a warm, clean, safe place to live.

 

Minnesota Women’s Press is planning a discussion about this topic in the near future. If you want to be part of it,  indicate your interest here.

 

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