Today, the Minnesota Star Tribune’s Walker Orenstein published an assessment of the challenges facing Becker after Amazon abandoned its planned data center:
For now, the land will remain vacant. In May, the tech giant from Seattle abruptly halted its plans during a fight over state regulations, making the project the latest promising business venture to flame out in Becker.
“It’s a gut punch,” said Mayor Mark Kolbinger. “It’s almost, in a sense, retraumatizing.”
Perhaps more than any other city in Minnesota, Becker’s fate is linked to the changes transforming Minnesota’s energy sector…
The “changes transforming Minnesota’s energy sector,” are driven by the state’s 2040 mandate for 100 percent wind and solar electricity. The closure of the first Sherco unit at the end of 2023, and scheduled closure of the other two units by 2026 and 2030, has left Becker vulnerable:
During a hearing at the Legislature earlier this year, Becker Public Schools Superintendent Jeremy Schmidt underscored the stakes: The Sherco coal plant is responsible for approximately $5 million of the district’s $12 million annual budget.
With that in mind, the Amazon property “is a big chunk of land out there that is really key to our future,” Kolbinger said.
Despite all of the work that local and state officials went through to attract new business, “a series of policy decisions in Minnesota made the landscape less attractive for data centers.” The Minnesota PUC ruled against Amazon when it sought to install backup diesel generation for its data centers, even though the generation would be off-grid and not affect ratepayers.
The law passed at the end of May is a “first-in-the-nation” exercise in driving data centers away:
Minnesota lawmakers also agreed to scale back tax breaks for the data center industry. Legislators were debating whether to enact tougher new rules for energy and water use, among other regulations. (Only some of those rules became law.)
In its May announcement, Amazon said its timeline for getting permits and its utility needs was “more uncertain than originally projected.”
Shortly after, Amazon announced plans for data center campuses in North Carolina and Pennsylvania.
These “policy decisions” have real, concrete consequences for cities and families:
Becker City Administrator Greg Lerud said Amazon’s decision “came out of the blue.”
The city tax income from Amazon’s data center would have nearly filled the hole left by Sherco. The data center would also have been a significant employer, he said. Construction would have taken about eight years, said Kolbinger, the mayor. That’s long enough that he hoped some builders would live in Becker and enroll kids in local schools…
Still, Becker wanted the Amazon project enough that Schmidt, the superintendent, and city officials traveled to the Legislature several times to advocate for data center development.
“Xcel remade our community in the 70s when they came here,” Kolbinger said. “I think [Amazon] would have been on the same scale.”
Minnesota lawmakers should consider the lessons from Becker and avoid imposing more burdensome regulations on data centers where they are wanted (and, in the case of Becker, actively courted).
