Benya Kraus, from the Southern MN Initiative Foundation, introduced the day to a sold out crowd. Today is the start of the conversation; the Initiative Foundation has planned for at least two more events in the region. They have seen a growing interest in the impacts of data centers across the state. This is an economic disruption that communities are experiencing.

U of M is working on Data centers, energy and water Research to help communities address data centers

• Looking at water and energy impacts of data centers
• How can we create tools for communities to decide what to do with data centers?
• They are looking at Zumbro & Root River watersheds. Interesting because the decisions are made in a silo despite the fact that a large community is impacted by the decisions.
• Looking at collection decision making, taking into consideration multiple POVs
• Iin terms of energy – communities have a range of energy companies and solutions and not much is yet known about the impact of data center
• Hoping to have the research and tools out July-Sep 2026
• Not for OR against but was to help people make the right decisions for their communities

Senator Frentz

• He’s very excited to talk about data centers
• Serves on Minnesota Senate Energy, Utilities, Environment, and Climate Committee
• MN had 40 data centers before 2025
• Minnesota made legislative decisions in 2025 –
• Advantages of data center – economic
• Energy needs will double in the next 10 years due largely to data centers
• Data centers create jobs as they are being built
• In Washington data centers came in with clean energy – but when the big data centers use clean energy that means the residents get edged to using fossil fuelts
• In Virginia, they have a lot of data centers and they are having energy issues
• IN MN, energy companies must serve the whole community
• Data centers uses 100 million gallons of water a year
• Data centers can be a push to get renewable energy and economic development.
• New MN Legislation means:
  • Water: twice a year data centers have to report on water use. DNR and PUC issues permits. The data center becomes public once they apply for permits. But they can get pre-application information. Requires an aquifer test,
  • Utilities: need to get PUC cert of need. PUC won’t allow permits when a power company can’t prove that they can commit to serving the data center and the community. Still need to be focus on clean energy 2040 goals
  • Community benefit – data centers will help lower income residents with weatherization
  • Green building standards –
• We should push for data centers in MN because we do have environmental requirements – unlike areas like Texas

PANEL

Dunham – repping commercial interests

• Going to give the 101 on data centers; AFCOM is an organization that loves to talk about data centers
• Data centers aren’t new – just a room full of computers
• Almost all technology involves a data center
• Types of data centers in order of size: enterprise, colocation, edge, hyperscale
• AI is a big impact and it’s growing – and the heat used to run the computers needs to be cooled. They are coming up with new ways to cool the computers.
• The Green Grid is a group that focuses on energy use
• Water is hard. Hyperscalers will ask for as much land, water and power as possible. Evaporative cooling uses 15gpm/MW – Closed Air-Cooled Chiller uses none. Some data centers won’t need as much water.
• Noise: better engineering can mitigate the noise
• Pollution: energy generators are only used in emergencies
• Traffic: 1,000 builders need to build a data center and they all drive to work
• Jobs: trades jobs during 24 months (building. After that uses highly skilled IT workforce and trades jobs to maintain MEP equipment
• Why are people interested in MN? Because MN has space and power. And MN First Stop.

Freshwater – repping environment

• Does water research, policy and education – trying to bridge many sectors
• The tension? Jobs versus water supply and ecosystem
• Many industries use water.
• Data centers need power and water. Decrease one means increasing the other.
• A medium data centers use the same power as a small town
• Need to focus on groundwater. SE MN is the part that has the large amounts of useable groundwater. Water in this area is more than 60,000 years old
• Water is recyclable. It does renew but we are also looking at dipping into water from long ago.
• Minnesota does monitor water use – and use that info while looking at permit – but only in the local community
• Water is being used at a rate faster than it’s renewing
• Changes in climate are also impacting water access.
• Pumping of water impacts chemicals in the ground
• Economic development teams were going straight to municipalities for permits – not involving the public.
• Priority of Use Statute
• Surface water is a good way to see and track water use
• Looking to create a water use atlas for MN

Blue Earth Light and Water– repping communities

• Blue Earth has water
• Has an RO (reverse osmosis) water plant
• City operates water and electricity
• 3100 people 241,000 MWH – which is a good range
• Population has been declining
• They were approached by a third party interested in data center.
• We have low cost energy. They have wind and solar.
• They can handle a 6 and 15 MW data centers without additional work required.
• They spent a year working on the data center.
• They made sure that data centers utilities were isolated to protect local residents.
• Worked with a number of partners.

Questions:

Communication is a big deal. Some cities have failed to notify the city council. How can we trust that the local government will share info?
Development is one thing – there’s also speculation. There’s a lot of talk that happens before anything is set in stone. Elected Officials do make decisions.
Public boards will share their agendas. In Blue Earth there were at least 20 steps they took to get things done.

How big is the footprint of the data centers in Blue earth?
Relatively small. The big center is 100×150.

What is negative pricing?
Think about how energy flows – it’s like running a boatload of generators into a funnel. Sometimes we need something to take energy away from the grid.

What about energy transmission? The permitters are looking to new federal regulation. How will that impact MN rules?
The federal government is shutting down projects in MN because of transmission rules. It will increase rates. We’re all going to pay for it.

What about impact of using water in closed loop system?
It’s pipe that goes from the building to the power generator. The water stays the same. In an open system, the water evaporates.

So this will be a balance of economic development and water. How is the use of water reporting? How many permanent jobs?
The buildings are large – and 1200 people will build it, which means a slew of people coming into work for a while.
Open loop doesn’t allow for much water reuse. Closed loop makes it more possible.
Usually people are specific about the proposed water/energy use – it is considered proprietary.
The new legislation requires reporting twice a year.
Blue Earth monitors energy use (no water is used).

Tools for Economic Developers

Great River Energy – wholesale power supplier coop

• Working toward carbon free MN 2040 standards – about 44 percent today
• Been working on data centers since 2010
• Have had requests for more than 6 GW – the big hyperscalers
• They have a member process to walk members through interactions with data centers and third party buyers. Look at feasibility to viability.
• Challenges
  • Landowner control
  • Public perception
  • Long lead times
  • Regulatory and entitlements
  • Political support
• Sustainable design means we work and require renewable energy
• When working with third parties, they don’t always know who the actual tenant will be
• 10 years ago the energy/water solutions were different
• Opportunities require partnership, clarity of process, communication plan, education effort and stakeholder engagement

CURE

• Nonprofit protecting landscapes and community
• Working on data centers for a year
• Law requires:
  • Nothing more required in terms of communication
  • Environmental and other reviews
  • Supposed to have public reviews – during permitting
  • Sales tax exemption – OK for equipment and software. Energy is not included.
  • Labor – must be paid prevailing wage
  • Must use green building standards
• Going to local government can be difficult depending

Greater Mankato Growth

• Chamber of commerce, economic developers et al
• They help local businesses – and recruit businesses
• Transparency if the law: once someone decides to move forward, there are many hoops to get through before things get permitted. Meeting notes and agendas are often available.
• NDAs are rarely used – but have been used. Eventually, details will be known.
• When does hypothetical become real in terms of communication with the pubic? We don’t always know who is really looking but we share what we can.

Questions:

How do you balance communication with need to work with businesses?
The public is frustrated – and projects that go wrong are becoming high profile. That’s been a learning experience.
We ask who will benefit? Who will pay consequences? Who will be impacted?

Cities do have leverage with permitting – how does that opportunity invite creativity? And what does it happen?
The hyperscale data centers are coming to the table with creative solutions. They want to create win/win solutions.
DNAs have been used forever. It’s the way things work. Projects will not happen because people refused NDAs.

Community benefit agreement? There are some great ones at Reimagine Appalachia.

How do you remain business friendly and new development?
We spend a lot of time planning for the future. We don’t like to make decisions on the fly. Citizens are required for citywide pans. People need to stay engaged and the cities want that help.
There are folks on fixed incomes. Prices are going up. We need to grow our tax bases to make sure that we can provide services in our communities.

Have you been approached by data centers? Have you had discussion with your members?
No approaches. We do talk to our members. We want to advocate for our members and our marketplace.

Development codes predicate when you have a public meeting. As an economic developer, you don’t have a project until you have an application.

There are two law suits related to data centers. How can we be more transparent with AUAR?
AUAR – there is a public comment period. Then there is a time for responses. The public comments won’t shut down a project.
You can always use data practices act to get information. Sometimes info is public but for practical purposes isn’t easy to access.
It helps for local deciders to have advance information on what the public wants.

AUAR: Alt urban area renewal – like an environmental review. It’s more for regional development. A complaint is that they are sometimes not as transparent as they should be.

What was the communication plans?
Sharing info in meetings. Social media. Local newspapers.

What are best practices for compliance?
It depends on whether they have plans or agreement.
There’s a case study in Centralia Washington on a project that garnered a community benefit trust fund.

What about sustainability?
There are a number of studies on data center designs – from green roofs and animals on campus.
Some folks are already including decommissioning clauses in the initial agreements.

Which comes first application or environment review?
Application is often for building permit.

We’ve heard that NDAs are tool. What about NDAs for businesses versus elected officials?
It does get murky when we look at public officials. Technically the applications process seems to be that moment.
The problem really comes up with hyperscale data centers.
Should people signing NDAs be the same people who get to make the final decisions.