Minnesota AG warns of Xcel Energy rate hike from proposed Google data center in Pine Island

Minnesota Attorney General Keith Ellison says a proposed Google data center in Pine Island could leave Xcel Energy's customers in the state on the hook for billions of dollars.

Ellison's office says it's asking the Minnesota Public Utilities Commission not to approve the deal unless Xcel and Google can prove its electronic service agreement "is reasonable, consistent with the public interest, or meeting the stringent requirements of the applicable law." 

State law requires "all costs attributable to the utility's very large customers" be charged to those customers, but Ellison's office alleges the utility has not provided proof that Google subsidiary Echo Zone, LLC, will cover all costs during the service agreement's term.

Ellison's office says Xcel also hasn't confirmed if "customers will be protected from paying for stranded costs if Google reduces its demand or leaves Xcel's system," which would also be in violation of state law. They also allege a lack of transparency, noting the utility provider "has redacted almost all of the dollar amounts of these potential impacts, however, and has not provided specific explanations for some of its redactions."

Xcel says the deal provides more than $1 billion in savings for taxpayers. Ellison's office says its assessment actually puts a $1.1 billion in net costs to customers.

In a statement released to WCCO Friday afternoon, an Xcel Energy spokesperson called the comments from Ellison's office "inconsistent with the facts in the docket."

"Xcel Energy has made it clear that any large energy users, including data centers, need to pay their own way. And that must be done without adding costs for other customers or affecting reliability – this is true with the proposed Google deal," the spokesperson said. "They are also paying their fair share of the existing system costs, which brings significant benefits to our existing customers."

Xcel also says Google has also agreed to fund "any additional infrastructure," and will pay for "1,900 megawatts of new clean energy resources."

WCCO has also reached out to Google for comment.

Last month, the company behind a proposed data center in the former site of the Minnesota Star Tribune's printing facility in Minneapolis abandoned its plans after strong pushback from residents in the North Loop neighborhood.

A recent CBS News poll found just 20% of respondants were in favor of having a data center built in their communities, with worries about potential environment impacts top of mind.

Pine Island is around 20 miles northwest of Rochester, and about 70 miles southeast of Minneapolis.