Regional Industry & News

MINOT — Data centers have become a political hot potato. Here in North Dakota, a strange alliance of Democratic-NPL candidates and far-right populists have taken to denouncing data centers with the same level of nuance and fervor once reserved for 5G cell phone towers and COVID-19 vaccines.

The interesting thing about all this is that, even as activists and candidates demand new laws, the data centers already built in North Dakota, and those in process, are already governed by some very strong policies that address some of the public's most pressing concerns.

This may be one of the oddest facets of the debate over data centers. They're treated like some unique sort of project when many of the concerns about them are the same as any other large industrial construction of the sort we've been building in North Dakota for generations. A facility to be built in the Minot area to process millions of tons of discarded iron ore from Minnesota, turning it into pig iron, an important feed stock for steel production, has around it many of the same concerns as a data center — noise, traffic, lighting and power and water consumption — but none of the political folderol.

Suggesting, perhaps, that a lot of the opposition against data centers is faddish and opportunistic.

Admittedly, power consumption is probably at the top of the list when it comes to data centers, and that makes sense given they are an outlier when it comes to power use even among industrial projects. Still, North Dakota's laws seem prepared for it.

U.S. Rep. Julie Fedorchak made that point in a recent press release touting the emergence of the Ratepayer Protection Act from the Energy and Commerce Committee with a unanimous vote.

The bill requires data centers to pay their full cost of service and provide upfront financial assurances, shielding consumers from grid investment risks. It now advances to the full House. As I reported last week, Gov. Kelly Armstrong has also signed a pledge committing his administration to similar ratepayer protection laws.

In her statement about the bill's progress, Fedorchak pointed out that this mirrors laws already on the books in our state.

“North Dakota requires large-load customers to cover the costs they impose on the electric system, protecting existing ratepayers while supporting economic growth," Fedorchak is quoted as saying in her release. "That's a model the rest of the country should follow, and the bipartisan Ratepayer Protection Act advances this principle.”

Fedorchak — who before her election to Congress in 2024 was a member of the Public Service Commission — is referring to what's called the "cost causation" principle.

North Dakota requires large-load power users to pay 100% of the up-front costs for any specialized utility infrastructure (substations, dedicated transmission lines, grid upgrades, etc.) required to serve their operations. Rather than rolling those capital costs into the general rate base, to be paid by existing residential, agricultural, and small business customers, they're required to be paid exclusively by the big corporate projects necessitating them.

As I reported in a July 20 column, we can see North Dakota's existing law at work with data centers, specifically, by looking at the example of Applied Digital's facility in Ellendale. Per documents filed by Montana-Dakota Utilities with the Public Service Commission for 2023, 2024 and 2025, Applied Digital paid more than $24.8 million in what's called "transmission riders" for the Ellendale facility for those years.

Transmission infrastructure costs are normally spread across all utility ratepayers, but North Dakota's application of the cost causation principle means the costs created by Applied Digital in Ellendale are paid by Applied Digital.

Since I wrote that column on July 20, there's been a new filing with the PSC updating the figures. In 2026, Applied will pay another $7 million in transmission riders, bringing the total benefit for ratepayers to nearly $32 million.

Many in the state are calling for a moratorium on constructing new data centers. "I'm proposing that we have a temporary one-year moratorium," Vern Thompson, Democratic-NPL candidate for agriculture commissioner, said in a June 24 episode of Plain Talk. "The fact is this is being pushed down our throats so fast by a lot of out-of-state multi-billionaire corporations and I just think we have to slow down."

The premise Thompson is working from is that North Dakota's laws are ill-prepared for data centers and the development is happening too rapidly, but are those things true? These projects go through years of local and state regulatory scrutiny before they're constructed, and while North Dakota's laws regarding high-volume power consumers weren't specifically written for data centers, they sure seem to be working.

None of which is to say the laws shouldn't be reviewed and updated as necessary. A recently-formed interim legislative committee, chaired by Rep. Jonathan Warrey, R-Casselton, is in the process of doing just that ahead of next year's regular session.

"I don't like moratoriums and I don't like the symbol they send off to say, 'Nope, we dug our heels in, we're not developing, we're closed for business.' And yet I appreciate and respect the feeling behind that too much too fast," Warrey told us of his approach to the committee's work on a July 3 episode of Plain Talk. "Let's go to work and get this framework out for our decision-makers and give them some resources around legal, environmental, structural power so that they can be informed."

There is, undoubtedly, work to be done when it comes to the data center issue, but a lot of that work may reside in cutting through some of the noise and hysteria around the issue to inform North Dakotans about the ways our laws are already working.