The state should approve data center regulations

The Tribune editorial team believes the meeting showed that further regulation will be necessary.

“Data center” is a catch-all term for the physical infrastructure that houses machines used for cloud computing, artificial intelligence, and cryptocurrencies. The centers require major industrial redevelopments and can require so much electricity that they strain the power grid. Proponents argue that the industries served by the centers are booming and that there are benefits beyond the data they store.

The discussion provided examples where data centers have contributed to both increasing and decreasing electricity rates.

This year, Montana-Dakota Utilities filed a complaint with the Federal Energy Regulatory Commission, alleging that the Atlas Power Data Center’s power demand near Williston was causing the utility to incur undue charges because of transmission system constraints and congestion. Southwest Power Pool, the regional power market operator that approved the project’s grid connection, is disputing MDU’s claim.

Regardless of who is right, the investment is costing MDU customers about $12 million, and the PSC has little control over that because the utility that connected it is a cooperative not regulated by the state.

Noise complaints around Atlas Power also prompted a lawsuit. The company was invited to send representatives to Thursday’s meeting, but no one showed up.

These problems can be compared to Applied Digital’s data centers in southeastern North Dakota. Because of a special rate approved by the PSC with MDUs, about $2 million of Applied’s operations go back to ratepayers. Its facilities are located near wind farms that lack the necessary transmission to deliver power to the grid, creating costs for ratepayers until the power is used.

It’s understandable why data center companies are skeptical of more regulation. The more regulation, the longer it can take to get up and running. Still, it’s important to prevent more situations like noise complaints and network issues near Williston. Similar noise situations have occurred in other parts of the country.

North Dakota Association of Counties Executive Director Aaron Birst expressed concerns about the Legislature taking away local control, while noting that counties could go too far. Another point he made was that taxes paid by data centers remain relatively low and should be adjusted to benefit residents.

The Tribune believes the Legislature should work with the PSC, counties, data center companies and the public to develop new regulations.

The Tribune doesn’t buy the argument that if the state develops regulations, it will encourage data center companies to move elsewhere. North Dakota has abundant natural resources to power data centers and a generally business-friendly population.

People deserve protection. There is no guarantee that the data center boom will be as big as predicted. If it is, good for North Dakota. But we have to do it right.