T E C H N O L O G Y
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Edited by
Jeff MuskusWho Pays to Make
Big Tech Green?
Bloomberg Businessweek March 2, 2020In the otherwise flat Minnesotan expanse, the
whitish-gray mound of coal ash looks mountain-
ous, a permanent cemetery of contaminants next
to the twin smokestacks of the Sherburne County
Generating Station. This power plant doesn’t just
run the town of Becker; it pretty much is the town.
But within a decade it will close completely. One
frigid morning, Greg Pruszinske, Becker’s admin-
istrator, is staring at the field across from the coal
ash pile, where he’s placed his hopes for the future.
Overhead, bands of high-tension cables connect
to towers near the plant. That infrastructure is one
reason Google has pledged to put a $600 million data
center here. It needs access to massive amounts of
uninterrupted power. “The transmission won’t go
away” when the coal plant closes, Pruszinske says.
“Electrons can come this way, same as they can go
the other way.”
For almost four decades, Sherco, as locals call the
plant, has done two things in abundance: burn coal
and pay taxes. It emits more greenhouse gases than
anything else in Minnesota, but it also covers 75% of
Becker’s tax base. Taxes from the plant subsidize a
public 18-hole golf course, an uncommon amenity
for a town of fewer than 5,000 people, and Sherco
employs more than 300 locals to create cheap power
for millions. Its transmission towers can deliver
more than 2,200 megawatts of power—four times
the output of a typical coal plant and enough to run
2.6 million homes, roughly half the state.
By 2016, local officials were worried about
Becker’s long-term prospects. Sherco’s operator,
Xcel Energy Inc., was planning to decommission
the plant in phases over the next decade or so,
and the town, about 50 miles northwest of down-
town Minneapolis, seemed to have few options toreplace it. So when the utility came to Becker’s
leaders with word that Google wanted to put a
data center near the aging smokestacks—one that
would need as much juice as a city of 600,000—
they and Xcel were eager to meet the tech compa-
ny’s requirements. “We want to become the coal
transition model for other communities across the
nation,” Pruszinske says.
In exchange for a promise of 50 full-time jobs,
Google will be exempt from two decades’ worth of
local and county taxes, worth at least $14 million.
While the data center will run on electricity gener-
ated by fossil fuels, Google will buy carbon offsets
from wind power suppliers in South Dakota. And
Xcel is giving it an initial 10-year discount on its elec-
tric bill, which in effect means the utility’s other cus-
tomers will help subsidize that bill.
“Given our scale, we can often find a mutually
beneficial structure that increases the amount of
renewables in a region, while also meeting our
energy goals as a company, and, given the decreas-
ing cost of renewables, do this in a cost-effective
manner for the utility serving the existing commu-
nity,” says Google spokeswoman Jacinda Mein. “Not
only does Google benefit, but so does the rest of the
community in the utility company’s service area.”
While most companies will gladly use any lever-
age at their disposal to wring better deals from local
officials, Google’s arrival in Becker is an object lesson
in the unique clout big tech companies’ huge power
needs give them over local utilities at a moment
when few industries’ power needs are growing, says
Anthony Logan, a researcher at Wood Mackenzie, an
energy consulting firm. Every company pursuing a
green energy plan “is getting a really good deal,” he
says. And by locating near an existing power plant,
even if it’s closing, Google benefits from the infra-
structure without having to pay for it, he says.
The lack of transparency surrounding the nego-
tiations can make it hard to figure out whether
such deals make sense for the public. “We don’t
know the amount of savings they are getting,”● Companies like Google have
leverage over local utilities as
their power use climbsILLUSTRATION BY WENKAI MAO