Are data centers making your power bill worse during heat waves?

Data centers have been top of mind for many Minnesotans lately, with new local debates seemingly popping up every week.

While some cities have implemented moratoriums on new data center developments, some are already active.

With the heat wave across the region this week, 5 EYEWITNESS NEWS looked at how data centers can strain the power grid and impact Minnesotans — and if they already are.

Heat Wave

Utilities and regulators say summer heat, not data centers, is the main driver of peak power demand as operators prepare tools to manage grid strain.

Minnesota’s largest public utility companies and the Midcontinent Independent System Operator (MISO) said they plan for high-demand periods and have steps ready when extreme weather puts pressure on the grid. Those steps can include demand response, conservation messaging, rotating planned outages and bringing more generation online.

Minnesota Power, which serves a large portion of northern Minnesota — mostly north of St. Cloud and east of Bemidji — noted that it does not yet have any data centers on its system. Still, when extreme weather hits, the utility works with MISO to ensure reliability.

“When there is a strain on the system, we have a variety of tools we can utilize if requested by MISO, ensuring all our power plants are available & producing energy and working with our largest customers to reduce demand,” Amy Rutledge, the company’s director of corporate communications, said.

Rutledge noted, however, that Minnesota Power is a winter-peaking utility and customers in its territory typically use more energy in winter than summer. She said the utility does not see as much air conditioning use as other utilities, likely because of its proximity to Lake Superior.

Xcel Energy does have data centers on its system, but not enough to where they’re driving any grid stress, the company said, agreeing that extreme weather — like this week’s heat wave — lead to highest demand.

What about data centers?

Cleanview, a market intelligence company, lists 30 data centers in Minnesota currently, with only half of those actually operating at this time. The operational ones include:

• 2 in Carver County,
• 3 in Dakota County — including the largest two in the state,
• 6 in Hennepin County, and
• 1 in Scott County.

According to the U.S. Energy Information Administration, the average U.S. home used roughly 30 kilowatthours (kWh) per day, according to 2022 data, or approximately 10,800 kWh per year. According to Cleanview, the operational data centers in Minnesota have a total operating capacity of 351 megawatts (MW) — more than 11,700 times the average energy usage of a home per day.

The others planned data centers in the state would add approximately 1,500 MW of additional capacity, roughly the equivalent of the energy usage of 50,000 homes in a day.

While data center development is still ramping up in the state, the Minnesota Legislature has already set guidelines for data center electricity use in 2025.

Cori Rude-Young, communications director for the Minnesota Public Utilities Commission (PUC), said the commission approved safeguards in May for how the state’s largest energy provider, Xcel Energy, may serve future customers, such as data centers.

Some of those safeguards include creating a new “very large customers” class and requiring them to “fully cover all of the system, generation, and transmission costs they create,” mandating that they cover all system upgrade costs, and outlining that they must comply with the state’s clean energy benchmarks, according to the PUC.

“These actions are designed to help protect Minnesota households and businesses from costs associated with new data centers,” Rude-Young said.

“Data centers, like any large-load customer, add to overall energy demand,” Otter Tail Power Company (OTPCO), which serves western Minnesota, added.

OTPCO said that more customers using electricity and paying their share actually help spread the fixed costs of running the electric system, adding that proposed data centers undergo system impact studies, long-term capacity planning, commission-approved pricing, service agreements, and financial assurances.

“Similar to our residential customers on an off-peak rate, data centers and other large-load customers may be subject to energy control during periods of high energy demand to ensure we can provide reliable and cost-effective electricity to all customers,” an OTPCO spokesperson said.

How utilities describe demand

OTPCO said heat waves increase energy use, but it plans its system for those peaks through generation, transmission and local distribution. The utility said customer use had been slightly lower than typical over the last week because of unseasonably cool weather and was expected to return to normal levels next week.

Xcel Energy, meanwhile, said its highest demand of the year usually comes during summer heat waves and is driven mainly by air conditioning use in homes and businesses, not data centers.

Xcel noted that data centers are only beginning to come online in its Upper Midwest service area and are not driving grid stress or reliability concerns there.

As for how to eventually handle them, Xcel Energy said its system is planned years in advance to handle peak demand from all customers, including data centers. The company also said that in the rare event controlled outages are needed, all large users, including data centers, could be subject to those measures.

Regional grid outlook

MISO said it manages the grid with its local partners each day, preparing for conditions like a heat wave. Before this week’s heat wave, the grid operator said it issued a Hot Weather Alert and a Conservative Operations Declaration to help ensure available resources were ready.

“The electric grid is a complex system that requires careful management to keep power flowing 24/7/365,” MISO told 5 EYEWITNESS NEWS. “MISO works closely with utilities and state regulators every day to ensure reliable power delivery and keep the lights on. When MISO anticipates tight electricity supply, we notify our member utility operators about what we’re seeing, what to expect, and the necessary actions to take.”

As part of any preparation or plans, MISO said utilities may shift planned outages, restore transmission lines to service or bring more generation online. However, the grid operator’s spokesperson also said data centers aren’t much of a factor yet.

“Today, hyperscale data centers make up approximately 1.3 gigawatts (GW) of demand across MISO’s 15‑state region. While they do contribute to growing electricity demand, they still represent a relatively small share of total system demand,” MISO said.

NOTE: While Minnesota’s three largest public utility companies answered 5 EYEWITNESS NEWS questions about the impacts of heat and data centers on the grid, Dakota Electric didn’t respond.

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