Google's $600 million data center project in Becker clears big hurdle

Google's planned $600 million data center for Becker took a big step forward Tuesday when Minnesota utility regulators approved the tech giant's electricity contracts with Xcel Energy.

The data center, essentially a huge warehouse filled with servers, would be powered by two wind farms dedicated to Google.

"We expect the project to go forward," said Randy Fordice, an Xcel spokesman.

Google's data center would employ only about 50 full-time workers, but it's expected to create about 2,000 construction jobs. It also would help fill an economic vacuum when Xcel's two big coal-fired power plants in Becker close in the mid 2020s.

"This is truly a win, win, win, win — a four-game sweep for Minnesota," John Tuma, a member of the Minnesota Public Utilities Commission (PUC), said using a baseball analogy. The five-member PUC unanimously approved three contracts between Minneapolis-based Xcel and Google.

Tuma said the winners include Xcel's ratepayers, since new revenue from Google's data center is expected to be greater than Xcel's infrastructure costs for the project. Ratepayers should benefit from the Google deal, Xcel said and the PUC concurred.

Data centers require a huge amount of electricity, and Google would become one of Xcel's five largest customers in Minnesota.

The Mountain View, Calif.-based company has six large data centers in the United States alone, and another seven spread across the globe. It's currently building three more, not including the Becker operation.

"Data centers are the engines of the internet," Mars Hanna, Google's senior lead for global energy policy and markets, told the PUC Tuesday. "They are the core of our operations."

The appearance of Hanna and another Google executive at Tuesday's PUC meeting marked the first time Google has publicly acknowledged the Becker project. The data center was first disclosed in a PUC filing made by Xcel in January.

The electricity contracts approved Tuesday, which include a discounted rate for Google over a 10-year period, are critical, Hanna said.

"The commission's approval will give Google very important certainty for a central part of this project," Hanna said. "This makes Minnesota a favorable site for future projects."

Since 2012, Google has been aiming to match its energy consumption with 100% renewable-energy production.

"We seek to have a material impact on the grid," Hanna said. That means buying incremental renewable-energy generation — i.e., electricity from projects specially built for Google.

Xcel will effectively use two new wind farms — beyond the eight other wind projects it has on its plate — to supply Google.

"Google is very excited to be here today in partnership with Xcel Energy," Hanna told the PUC.

Hanna declined to comment on Google's next steps, referring questions to the company's media representatives.

Charlotte Smith, a Google spokeswoman, said the company doesn't yet have a construction schedule and has not yet bought land for the data center. "Until then, I wouldn't say anything is set in stone," she said.

Xcel owns the 300 or so acres upon which the data center will be built. Fordice said Xcel and Google have a purchase agreement for the property.

The land is adjacent to the Sherco electricity complex, which includes two coal-fired generators wholly owned by Xcel. The company plans to close the generators early, replacing much of their output with a new gas-fired generator and new renewable-energy projects.

The Sherco plant is a big employer in Becker and a large part of the tax base for both the city and Sherburne County. In March, Sherburne County commissioners voted unanimously to give Google a property tax break over 20 years if its builds the data center.

Representatives from Becker and Sherburne County spoke in favor of the Google deal at Tuesday's PUC meeting, as did Fresh Energy, a St. Paul-based renewable energy research and advocacy group.

The Minnesota Department of Commerce, which represents the public interest before the PUC, supported Xcel's contracts with Google. In fact, there was no opposition before the PUC in person Tuesday or in filings, a relative rarity for a large Xcel proposal.

"Unanimity among stakeholders before the commission is somewhat unique," Ryan Long, Xcel's assistant general counsel, told commissioners.