Three years ago, Xcel Energy announced that Google planned to build a $600 million data center in Becker, Minn., which the utility would power from two dedicated wind farms.
To build or not to build in Becker: Google is still on the fence
Xcel recently acknowledged concerns over the $600 million project. Google says it hasn't abandoned the idea.
February 9, 2022 at 8:08PM
But Google has yet to buy the land from Xcel it needs in the small town northwest of the Twin Cities. And with very little disclosed about the data center's status since 2019, a Minnesota Public Utilities Commission member put Xcel on the spot at a recent meeting.
"Is there great concern that it is not going to move forward?" Commissioner Joe Sullivan asked.
"I can't say there isn't concern. I think we are still hopeful," Matt Harris, Xcel's lead assistant general counsel, replied. He added that the pandemic has affected the project's timeline.
Google says it hasn't abandoned the project. And Becker and Sherburne County officials say they have no indication the data center won't be built.
The data center would create about 50 permanent jobs. It would be one of the larger construction jobs in recent Minnesota history, employing about 2,000.
It would shore up Becker and Sherburne County's tax base at a time when Xcel begins to ramp down its giant coal-fired power plant in the town. And Google would instantly become one of Xcel's largest customers.
Xcel, in a statement Wednesday, said "projects of this scale and complexity take time to come together." The data center "has lengthy evaluation, pre-development and development timelines. We continue to work closely with the project team and stakeholders."
Google's option to buy roughly 300 acres of Xcel land expires at the end of this year, along with a separate "notice to proceed" agreement between the companies.
Google, in a statement, said it "is considering acquiring property in Becker, MN, and while we do not have a confirmed timeline for development for the site, we want to ensure that we have the option to further grow should our business demand it."
Within its data centers, Google runs thousands of server computers that store and index websites, photos and other content, run applications such as e-mail and allow the company to provide other services to individuals and businesses.
The California-based company has 14 U.S. data centers and three under construction. That's up from six when the Becker project was disclosed by Xcel in January 2019.
Just last month, construction was completed on the second phase of one of Google's largest U.S. data centers in Council Bluffs, Iowa — a $5 billion investment overall. In 2021, Google announced the opening of four data centers.
"These all followed periods of planning and construction and were not completed overnight," the company said. "With that in mind, we're continuing to work closely with local stakeholders in Becker."
Marie Pflipsen, Becker's community development director, said the city has had monthly communications — on average — with Google. "We are not concerned about the future of the project," she said. "This is a long project with a lot of technical pieces to it."
The city has not yet signed a development agreement with Google, she said, as that would come after the company purchases land from Xcel.
The Legislature has ponied up $20.5 million for infrastructure improvements to a Becker industrial park that would host the data center. Most of the work involves extending water and sewer mains, with construction occurring primarily in 2022 and 2023.
Sherburne County and the city of Becker have both bestowed tax breaks on the project. They will tax the would-be Google property — now an open field — at its current value for 20 years. Those tax breaks annually amount to $313,000 and $387,000 from the city and county, respectively.
The land is a buffer adjacent to the Xcel's three Sherco coal-fired power plants, the largest electricity generating complex in Minnesota. The plants are slated to close between 2023 and 2030.
In 2019, the PUC approved Google's electricity contracts with Xcel, which include a discounted rate for the tech giant over a 10-year period.
Data centers require enormous amounts of power to run the computers and keep them cool. Google has committed to using renewable energy sources for its operations globally, including its data centers, with a goal of carbon-free energy by 2030.
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