Mystery company plans $1B data center on Xcel property in Becker

Xcel Energy plans to land a second big data center for its property in Becker — in addition to a proposed Google facility.

Xcel has signed an option to sell 348 acres to a company that would invest up to $1 billion in a data center at its Sherco site in Becker.

The Minneapolis-based utility plans to close three big coal-fired generators at Sherco by 2030. The data centers — along with a large solar farm planned by Xcel — would help offset the economic blow to Becker and Sherburne County.

Xcel confirmed that the new data center would be separate from the Google project, which was announced in January 2019. The Google data center has been delayed, though Becker and Sherburne County officials say they believe it will eventually be built.

The latest data center would have 100 full-time employees and would create more than 1,200 building trades jobs, Xcel told the Star Tribune. Xcel offered no other details about the data center, except to say it's not a cryptocurrency mining project.

"It's a pretty big deal for Xcel, and it is a big economic development project [for the area]," said Sherburne County Administrator Bruce Messelt.

Xcel last week filed a petition with the Minnesota Public Utilities Commission (PUC) to approve selling 348 acres to Elk River Technologies LLC. Minnesota corporate records show that company was incorporated in May but offer little more information.

Messelt said Elk River Technologies appears to be a "holding company or development company" created for the new data center. Messelt and Becker City Administrator Greg Lerud said they don't know who's behind the project. Xcel just informed them of it last week, they said.

Elk River Technologies has an option to buy the land through Jan. 21, 2023, but the option can be extended three times through July 21, 2024. The sale price is $7.7 million, and Xcel's profit would be $7.5 million given the land's low book value, the PUC filing said.

Xcel said in the filing it would pass down that profit to ratepayers.

Data centers contain thousands of computer servers that store and process reams of information. They use enormous amounts of power, making them important customers for electric utilities.

The data centers planned for Becker would entail major construction projects.

So would the $1 billion data center that CloudHQ plans for Chaska, the fourth such facility in the West Creek Corporate Center. Washington, D.C.-based CloudHQ, which builds and operates data centers for corporations, plans to start construction in 2023 pending local government approval.

The Elk River Technologies and Google projects appear similar in scope.

Google has an option to buy about 300 acres from Xcel, compared with 384 for Elk River. Google would employ half as many full-time workers as the Elk River project, but it would create about 800 more construction jobs, according to projections announced in 2019.

The Google project was estimated in early 2019 to cost $600 million, but that price tag has likely increased due to inflation.

Google's option to buy Xcel land's land for a data center expires at the end of 2022, along with a separate "notice to proceed" agreement between the companies.

At a February PUC meeting, an Xcel executive acknowledged concerns about the Google project but was "hopeful" it would proceed. At the time, Google told the Star Tribune it had not abandoned the project.

The company said Thursday it didn't "have anything new to share."

Messelt said the Google center was put "on hold" during the pandemic, but that public officials and Xcel and Google executives continue holding quarterly conference calls.

Messelt and Becker's Lerud both said they believe the data center will be built. "We have nothing to indicate it won't," Messelt said.

Lerud and Messelt said they haven't seen any subsidy requests yet for the new data center. Sherburne County and Becker have both bestowed tax breaks on the Google project.