WEBVTT
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00:00:10.320Well, welcome everyone to a special episode of
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00:00:13.199That's Shocking, a City Utilities podcast. Today
00:00:13.199 -->
00:00:15.800we have a very special episode for you. We've
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00:00:17.920got a one -on -one discussion with CU President
00:00:17.920 -->
00:00:21.179and CEO Dwayne Folk. Dwayne, thank you so much
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00:00:23.100for being here. It's your first time on the show
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00:00:26.219and we've got a big topic for you today. So thank
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00:00:28.399you for being here. We're talking about data
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00:00:31.000centers. And you've been talking about data centers
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00:00:34.579a lot lately. I have. It's funny because when
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00:00:36.219we were preparing for this episode, I was thinking
00:00:36.219 -->
00:00:38.060about how you've been in your role for about
00:00:38.060 -->
00:00:42.520how long now? 20 months. 20 months. Okay. Just
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00:00:44.74020 months ago when you were going through the
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00:00:48.399arduous interviewing process, did anyone ask
00:00:48.399 -->
00:00:51.469you, what about data centers? Actually, the data
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00:00:53.570centers were on our minds even back then. And
00:00:53.570 -->
00:00:55.890so that was one of the topics of conversation,
00:00:56.049 -->
00:00:58.229but certainly not a topic of conversation out
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00:01:00.350in the public the way it is now. We as a utility
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00:01:02.490have been aware of data centers and planning
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00:01:04.750for data centers and have been serving data centers
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00:01:06.890for a lot longer than that. So you've had some
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00:01:08.609time to kind of think about it and prepare, which
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00:01:10.469is great because City Utilities has been preparing
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00:01:13.450behind the scenes. Of course, now it seems like
00:01:13.450 -->
00:01:15.609it's all anything anyone can talk about in the
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00:01:22.659public. popular topic of discussion. I think
00:01:22.659 -->
00:01:24.260one of the reasons it's become a popular topic
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00:01:26.920of discussion is just the advancement of technology
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00:01:29.939and the increasing use of artificial intelligence
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00:01:33.400and some of the online resources that drive the
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00:01:35.319need and the demand for data centers. And so
00:01:35.319 -->
00:01:37.900because there's a need and a demand for it, that
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00:01:40.359means there's more construction, more data center
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00:01:42.560proposals going on, and therefore more power
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00:01:44.879necessary for that. So it's causing some concern,
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00:01:47.260I think, out in the public about do we have enough
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00:01:49.780power? Do we have enough water if the data centers
00:01:49.780 -->
00:01:53.079use water for cooling? for instance, and what
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00:01:55.760effects might that have on our grid and on our
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00:01:59.040costs associated with that. So when we talk about
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00:02:01.120data centers, most people think about AI, artificial
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00:02:03.799intelligence. Is that a primary reason for the
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00:02:05.920boom? And are there data centers that don't involve
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00:02:09.150artificial intelligence? Great question. I think
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00:02:11.490that artificial intelligence is a primary driver.
00:02:11.610 -->
00:02:13.610However, it's not the only driver. So there are
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00:02:16.330different types of data centers. There are regular
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00:02:18.289data centers, if you will, that have been around
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00:02:21.030forever that house any types of data that you
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00:02:23.409might imagine. We have one at City Utilities
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00:02:27.129internally, hospitals, banks. There's data centers
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00:02:28.669that serve all sorts of different businesses.
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00:02:31.830City Utilities actually formed a data center
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00:02:34.050in the Springfield Underground as part of its
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00:02:35.830business several years ago and spun that off
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00:02:38.669to a separate entity. That type of data center
00:02:38.669 -->
00:02:41.009has been around forever. A more recent type of
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00:02:42.870data center that doesn't involve AI necessarily
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00:02:44.909is crypto mining. So there are some data centers
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00:02:48.189that provide that type of service for their owners.
00:02:48.310 -->
00:02:50.610And we have served those types of data centers
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00:02:53.469here in Springfield previously as well. The AI
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00:02:56.409data centers are getting the most press right
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00:02:58.610now, probably because they're the largest and
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00:03:01.090they use the most power. Yeah. And another term
00:03:01.090 -->
00:03:03.969that we might hear a lot is hyperscaler. So those
00:03:03.969 -->
00:03:06.930are the ones that utilize a lot more energy.
00:03:07.150 -->
00:03:10.310and perhaps water. Sure. That's quite possible.
00:03:10.610 -->
00:03:12.909Hyperscalers really just refer to a type of data
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00:03:16.629center that houses more than one or a group of
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00:03:19.590tenants that provide data center services. So
00:03:19.590 -->
00:03:21.990it's just the size that makes it a hyperscale
00:03:21.990 -->
00:03:24.090or the fact that there's more than one tenant,
00:03:24.169 -->
00:03:26.629more than one company inside the building. So
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00:03:29.189City Utilities, as we mentioned, has been preparing
00:03:29.189 -->
00:03:33.289because data centers already have been calling.
00:03:33.330 -->
00:03:35.430They're calling every community from what I understand.
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00:03:37.939You're hearing from your colleagues as well across
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00:03:39.900the country. That's correct. It's a nationwide
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00:03:43.039move. Data center companies, data center developers,
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00:03:45.139I believe, are looking for any available power
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00:03:47.520right now. Previously, they were looking for
00:03:47.520 -->
00:03:49.319cheap available power. Now they're just looking
00:03:49.319 -->
00:03:51.840for power. So where can they site? Where can
00:03:51.840 -->
00:03:54.599they plug into the grid? Where can they get generation
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00:03:57.120provided to them or transmission for the power
00:03:57.120 -->
00:03:59.879that they need and use? So it's a nationwide
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00:04:02.699issue, a nationwide conversation, and it's come
00:04:02.699 -->
00:04:05.080to the Midwest. So what is City Utilities doing
00:04:05.080 -->
00:04:07.840to prepare? So we've done the same things we've
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00:04:10.939always done. We really focus on three main topics,
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00:04:15.199thoughtful preparation and then clear communication
00:04:15.199 -->
00:04:17.740out to the public, but really, first and foremost,
00:04:17.819 -->
00:04:20.180protecting our customers and our community. So
00:04:20.180 -->
00:04:22.439our latest effort in doing that is standing up
00:04:22.439 -->
00:04:25.040what we call a large load task force and application
00:04:25.040 -->
00:04:28.060process where any data center or other large
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00:04:32.769electric load that would apply to be served by
00:04:32.769 -->
00:04:35.129city utilities has to provide certain information,
00:04:35.449 -->
00:04:38.709deposits to cover their expenses, and agree to
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00:04:42.410certain things like providing all the costs for
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00:04:45.050the things that they would use or the upgrades
00:04:45.050 -->
00:04:47.470we would need to provide on our system. So basically,
00:04:47.629 -->
00:04:51.189if any data center, hyperscale, or whatever it
00:04:51.189 -->
00:04:52.990may be, wants to come to Springfield, the idea
00:04:52.990 -->
00:04:55.750is that they would pay for whatever upgrades
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00:04:58.189or infrastructure is necessary to house them
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00:05:00.430here. That's correct. And not just the infrastructure
00:05:00.430 -->
00:05:02.769upgrades, certainly that's the case, but we're
00:05:02.769 -->
00:05:06.420also developing a large... load power rate where
00:05:06.420 -->
00:05:08.379they would pay for all the power that they use
00:05:08.379 -->
00:05:11.819as well. Their power usage profile could be different
00:05:11.819 -->
00:05:14.040than other customers, and we base our customer
00:05:14.040 -->
00:05:17.040rates on the customer's profile. So it's a new
00:05:17.040 -->
00:05:19.000profile that we're creating just for that type
00:05:19.000 -->
00:05:21.379of load. So the idea being that our existing
00:05:21.379 -->
00:05:23.920customers won't have to shoulder the burden of
00:05:23.920 -->
00:05:26.000these data centers. That's correct. That's our
00:05:26.000 -->
00:05:29.540goal, and we're dedicated to doing that. We have
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00:05:32.160the benefit of being in various organizations
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00:05:35.069where we can learn best practices, what other
00:05:35.069 -->
00:05:37.230utilities' experiences have been. And so we're
00:05:37.230 -->
00:05:39.670learning from them and then developing our process
00:05:39.670 -->
00:05:43.149with the best of those. So why not just say no?
00:05:44.079 -->
00:05:46.639Why not just say thanks, no thanks? Sure. So
00:05:46.639 -->
00:05:49.300as a municipal utility, as a utility with a service
00:05:49.300 -->
00:05:53.120territory, we have an obligation to serve a data
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00:05:55.379center if it receives all the approvals that
00:05:55.379 -->
00:05:57.459it requires from the state and federal regulatory
00:05:57.459 -->
00:06:00.199agencies, from the local permitting authorities,
00:06:00.560 -->
00:06:02.819and then for our own service rules and regulations
00:06:02.819 -->
00:06:06.180as well. So if a data center checks all those
00:06:06.180 -->
00:06:09.060boxes, we have an obligation to serve it. So,
00:06:09.060 -->
00:06:12.040you know, we talk about in Springfield how we
00:06:12.040 -->
00:06:17.209currently generate, what, 600 -something megawatts
00:06:17.209 -->
00:06:19.889-ish per day. Is that correct? That's our load,
00:06:19.930 -->
00:06:22.089typically, is around 500 to 600 megawatts, yes.
00:06:22.290 -->
00:06:26.509And we've heard some of these hyperscalers may
00:06:26.509 -->
00:06:30.629also need 500 megawatts or more. So there's a
00:06:30.629 -->
00:06:32.529potential there you're talking about doubling
00:06:32.529 -->
00:06:36.410the load on Springfield. Do we currently have
00:06:36.410 -->
00:06:39.209the generation to support that type of load?
00:06:40.839 -->
00:06:43.560If not, is that then a reason for us to say?
00:06:44.060 -->
00:06:46.360we're sorry, we perhaps aren't the best option
00:06:46.360 -->
00:06:48.779for you. Yes, so that's correct. If we don't
00:06:48.779 -->
00:06:51.000have available power, that's one of the reasons
00:06:51.000 -->
00:06:53.399that we would be able to say or that we would
00:06:53.399 -->
00:06:55.379have to say to a potential data center that we
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00:06:57.680can't serve it. It would have the opportunity
00:06:57.680 -->
00:07:00.000to bring its own power potentially, but we would
00:07:00.000 -->
00:07:01.879have to understand how that works not only in
00:07:01.879 -->
00:07:05.300connection with our customers and our power generation
00:07:05.300 -->
00:07:07.620here in Springfield, but the grid itself. And
00:07:07.620 -->
00:07:09.079so they would have to apply to the Southwest
00:07:09.079 -->
00:07:11.379Power Pool, which is the regional transmission
00:07:11.379 -->
00:07:15.040organization in our area. and they would have
00:07:15.040 -->
00:07:16.839to get approval from the Southwest Power Pool
00:07:16.839 -->
00:07:19.680to bring that additional generation. All data
00:07:19.680 -->
00:07:21.759centers aren't the same. So some data centers
00:07:21.759 -->
00:07:23.800are as little as 10 megawatts, for instance,
00:07:24.040 -->
00:07:27.040that's been proposed to us. Some have been multiples
00:07:27.040 -->
00:07:30.829of the 500 that you mentioned. It depends on
00:07:30.829 -->
00:07:34.069whether we can provide the generation, the power
00:07:34.069 -->
00:07:35.110that they need within our current generation
00:07:35.110 -->
00:07:37.790portfolio, or if we have to develop or they have
00:07:37.790 -->
00:07:39.810to develop additional. If there's additional,
00:07:39.930 -->
00:07:41.149certainly they would have to pay for all the
00:07:41.149 -->
00:07:43.230cost of it. But what's interesting is you can't
00:07:43.230 -->
00:07:45.189build generation overnight, right? Correct. And
00:07:45.189 -->
00:07:48.709so how do we sort of balance the need for or
00:07:48.709 -->
00:07:51.370the demand for these data centers to start to
00:07:51.370 -->
00:07:55.790come in immediately with our need to slowly build
00:07:55.790 -->
00:07:59.500up generation? Sure. The short answer to that,
00:07:59.560 -->
00:08:01.279I think, is it's not our obligation to balance
00:08:01.279 -->
00:08:03.300that for the data centers. It's our obligation
00:08:03.300 -->
00:08:05.360to balance that for our customers. And so we
00:08:05.360 -->
00:08:07.379are currently building additional power generation
00:08:07.379 -->
00:08:10.139to satisfy some of the Southwest Power Pool's
00:08:10.139 -->
00:08:13.560planning reserve margin requirements. That margin,
00:08:13.720 -->
00:08:16.100if you will, has already been committed to ourselves,
00:08:16.399 -->
00:08:20.259our other customers, and then additional economic
00:08:20.259 -->
00:08:23.529development projects. So we're fortunate. perhaps,
00:08:23.610 -->
00:08:26.949to not have 500 extra megawatts of generation
00:08:26.949 -->
00:08:29.949capability. And so that conversation becomes
00:08:29.949 -->
00:08:32.429very easy in terms of saying, you're going to
00:08:32.429 -->
00:08:34.210have to provide your own solution or go somewhere
00:08:34.210 -->
00:08:37.509else. So, Duane, this may be oversimplifying
00:08:37.509 -->
00:08:40.110it, but I'm really thinking of this as twofold.
00:08:40.190 -->
00:08:43.129One is the data center needs to be able to generate
00:08:43.129 -->
00:08:46.190the power, but also we need to be able to transmit.
00:08:46.679 -->
00:08:48.679Through transmission lines, the power. And so
00:08:48.679 -->
00:08:51.340is that a part of the study looking at both of
00:08:51.340 -->
00:08:52.879those things? Because I'm sure they're both equally
00:08:52.879 -->
00:08:55.320important. That is correct. And it depends on
00:08:55.320 -->
00:08:57.480whether the data center developer wants to bring
00:08:57.480 -->
00:08:59.620their own power or import their own power. So
00:08:59.620 -->
00:09:01.259they can import their own power through transmission
00:09:01.259 -->
00:09:03.460lines. That's another part of the study, as you
00:09:03.460 -->
00:09:05.639mentioned. That would be also with Southwest
00:09:05.639 -->
00:09:08.340Power Pool's approval. But building transmission
00:09:08.340 -->
00:09:11.029lines is... just as challenging as building generation
00:09:11.029 -->
00:09:14.029right now. There's a lot of competition for labor
00:09:14.029 -->
00:09:16.690and materials and resources to do that, the process
00:09:16.690 -->
00:09:20.500to get approval and to... Issue notices to construct
00:09:20.500 -->
00:09:22.840and to have the construction documentation and
00:09:22.840 -->
00:09:25.179people in place is a multi -year process. And
00:09:25.179 -->
00:09:27.120as you mentioned, data center developers would
00:09:27.120 -->
00:09:30.559like to have their power now. So typically they
00:09:30.559 -->
00:09:32.440would move on to another area as opposed to wait
00:09:32.440 -->
00:09:35.019for that with us. Many data centers I have heard
00:09:35.019 -->
00:09:37.600are looking to batteries as the option for generation
00:09:37.600 -->
00:09:40.480at least. Is that still something that's being
00:09:40.480 -->
00:09:43.740discussed heavily in the industry? And what risks
00:09:43.740 -->
00:09:46.480and perhaps benefits does that option bring?
00:09:48.649 -->
00:09:50.470An option that everyone is looking at currently,
00:09:50.610 -->
00:09:52.690not just data center developers, but also utilities,
00:09:52.850 -->
00:09:55.169in fact, city utilities, is developing two battery
00:09:55.169 -->
00:09:58.470projects, one on the east side of Springfield
00:09:58.470 -->
00:10:01.250next to our... Blackman Water Treatment Plant
00:10:01.250 -->
00:10:03.149and one in the southeast side of Springfield
00:10:03.149 -->
00:10:05.149next to our former James River Power Station.
00:10:05.610 -->
00:10:08.230Those are zinc -based batteries, and so they
00:10:08.230 -->
00:10:11.909are domestically sourced, non -flammable, and
00:10:11.909 -->
00:10:14.169are fully recyclable. Not all batteries are the
00:10:14.169 -->
00:10:17.070same. So some technologies might not be zinc.
00:10:17.149 -->
00:10:19.429They might be lithium -ion or some other type
00:10:19.429 -->
00:10:21.590of technologies currently being developed. So
00:10:21.590 -->
00:10:23.629as data center developers and others are looking
00:10:23.629 -->
00:10:26.610at those, then citing those battery projects
00:10:26.610 -->
00:10:29.500has become a concern with the public. and with
00:10:29.500 -->
00:10:33.720the licensing bodies about whether they're safe,
00:10:33.899 -->
00:10:36.840whether they're going to continue to be maintained
00:10:36.840 -->
00:10:39.700in the future. We at City Utilities are dedicated
00:10:39.700 -->
00:10:41.679to maintaining the batteries that we control,
00:10:41.879 -->
00:10:43.899but we don't have control over batteries that
00:10:43.899 -->
00:10:46.549aren't located on our site. And the only other
00:10:46.549 -->
00:10:50.029option then for generation, if the data center
00:10:50.029 -->
00:10:51.929doesn't bring, for example, batteries, would
00:10:51.929 -->
00:10:55.110be something like natural gas or, of course,
00:10:55.210 -->
00:10:57.529if we were able to generate some through our
00:10:57.529 -->
00:11:00.190coal -fired power plants. However, let's talk
00:11:00.190 -->
00:11:02.070about natural gas for a second because we're
00:11:02.070 -->
00:11:04.450also a little bit limited on our capacity from
00:11:04.450 -->
00:11:06.870that perspective here in city utilities. We are.
00:11:06.990 -->
00:11:08.950In fact, at city utilities, I'd say that we are
00:11:08.950 -->
00:11:12.629fuel -constrained and we're also power -constrained
00:11:12.629 -->
00:11:15.980when it comes to transmission. a single gas pipeline
00:11:15.980 -->
00:11:18.500that comes into Springfield and we currently
00:11:18.500 -->
00:11:20.500have committed all of the capacity we have on
00:11:20.500 -->
00:11:22.639that pipeline to ourselves and our customers
00:11:22.639 -->
00:11:26.399to the utilities. So we have obtained approval
00:11:26.399 -->
00:11:28.580and they are currently constructing an upgrade
00:11:28.580 -->
00:11:30.720to provide additional capacity but again that
00:11:30.720 -->
00:11:32.820additional capacity is already committed. So
00:11:32.820 -->
00:11:34.779a data center developer coming into Springfield
00:11:34.779 -->
00:11:37.000that would like to develop gas generating power
00:11:37.000 -->
00:11:39.240capacity would have to bring in an additional
00:11:39.240 -->
00:11:42.139pipeline. But I like what you said that that's
00:11:42.139 -->
00:11:44.279not necessarily our problem to solve. Correct.
00:11:44.849 -->
00:11:46.769That's the data center's problem to solve. We
00:11:46.769 -->
00:11:48.610just need to make sure that we're doing what's
00:11:48.610 -->
00:11:50.509necessary to prepare and protect our customers.
00:11:50.750 -->
00:11:54.830That's exactly right. So bottom line, do you,
00:11:54.909 -->
00:11:59.029if you have your future scene glasses on, do
00:11:59.029 -->
00:12:02.090you see a world in which Springfield has a hyperscale
00:12:02.090 -->
00:12:05.730data center at some point? I believe that over
00:12:05.730 -->
00:12:08.450time, those will become fairly normal around
00:12:08.450 -->
00:12:10.309the country. And it may not be a hyperscale data
00:12:10.309 -->
00:12:13.450center. It may be smaller data centers sited
00:12:13.450 -->
00:12:17.529in areas where there's underserved or underutilized
00:12:17.529 -->
00:12:20.929infrastructure like substations. But data centers
00:12:20.929 -->
00:12:23.649will be. become a normal thing. It's just because
00:12:23.649 -->
00:12:26.029of the demand and because of the ubiquity of
00:12:26.029 -->
00:12:29.769the need that that's going to happen. So as they
00:12:29.769 -->
00:12:31.850become more normal and more regulated, I believe
00:12:31.850 -->
00:12:33.289people will become more comfortable with that
00:12:33.289 -->
00:12:36.250because the utility companies and the local regulatory
00:12:36.250 -->
00:12:38.389agencies are going to be taking care of the community.
00:12:38.649 -->
00:12:40.429And you mentioned as we were preparing for this
00:12:40.429 -->
00:12:43.169that there are both risks and opportunities to
00:12:43.169 -->
00:12:45.169that. Can you talk about that a little bit? Sure.
00:12:45.830 -->
00:12:49.379Certainly risks, as we know, involve potential
00:12:49.379 -->
00:12:52.600cost increases for our customers, water usage,
00:12:52.940 -->
00:12:56.039potentially heat and other environmental aspects
00:12:56.039 -->
00:12:59.059of data centers. I believe there's a national
00:12:59.059 -->
00:13:01.820security concern, though, with not having a data
00:13:01.820 -->
00:13:04.000center here locally or at least within the United
00:13:04.000 -->
00:13:06.779States because there are foreign countries that
00:13:06.779 -->
00:13:08.639would rather have data centers there, and I believe
00:13:08.639 -->
00:13:10.960that local businesses, for instance, should have
00:13:10.960 -->
00:13:13.340an interest in making sure to have control over
00:13:13.340 -->
00:13:16.909the security of their data. If a data center
00:13:16.909 -->
00:13:19.210locates somewhere else besides Springfield, there
00:13:19.210 -->
00:13:22.029could still be adverse effects on us as far as
00:13:22.029 -->
00:13:25.730availability and cost of labor, materials, power,
00:13:25.970 -->
00:13:27.850infrastructure, all the sorts of things that
00:13:27.850 -->
00:13:29.990we use without some of the offsetting benefits
00:13:29.990 -->
00:13:33.549of having the data center located here, like
00:13:33.549 -->
00:13:35.549offsetting some of those costs and providing
00:13:35.549 -->
00:13:37.490benefits to the community. Now, I want to go
00:13:37.490 -->
00:13:39.070back to something you said at the very beginning
00:13:39.070 -->
00:13:40.809of that. You said one of the risks is increased
00:13:40.809 -->
00:13:44.049costs for our customers. However, we also have
00:13:44.049 -->
00:13:46.690this team that's working to try to prevent that.
00:13:46.789 -->
00:13:50.090So is it not as simple as saying the data center
00:13:50.090 -->
00:13:51.509is going to pay for everything and our customers
00:13:51.509 -->
00:13:53.549will not shoulder any of the burden at all? Is
00:13:53.549 -->
00:13:55.269it that black and white or is it more complicated
00:13:55.269 -->
00:13:57.509than that? It's that simple for a data center
00:13:57.509 -->
00:13:59.789located within our service territory. But outside
00:13:59.789 -->
00:14:02.289of our service territory, we don't have the opportunity
00:14:02.289 -->
00:14:04.480to have that control and we also don't. get to
00:14:04.480 -->
00:14:06.799receive the benefits and so a data center outside
00:14:06.799 -->
00:14:09.019our service territory might be able to plug into
00:14:09.019 -->
00:14:11.139the grid either through another utility or directly
00:14:11.139 -->
00:14:13.899and then we could have some offsetting then we
00:14:13.899 -->
00:14:16.340could have some adverse effects of that because
00:14:16.340 -->
00:14:20.590of cost congestion on our power lines, or potentially
00:14:20.590 -->
00:14:23.470competition for resources like labor and materials
00:14:23.470 -->
00:14:26.110and power and infrastructure. So let's dig into
00:14:26.110 -->
00:14:28.210that a little bit more. What you're saying is
00:14:28.210 -->
00:14:30.870that if a data center were to open just outside
00:14:30.870 -->
00:14:34.090of our service territory, as an example, we might
00:14:34.090 -->
00:14:36.710still see some of the added costs because of
00:14:36.710 -->
00:14:40.730the sort of burden on the whole grid? That's
00:14:40.730 -->
00:14:42.309exactly right. Yes. And we call that congestion.
00:14:42.570 -->
00:14:45.889So we have locational marginal pricing that Southwest
00:14:45.889 -->
00:14:48.850Power Pool charges us for what it costs to send
00:14:48.850 -->
00:14:50.769the power to Springfield. It's like an interstate
00:14:50.769 -->
00:14:52.870highway. The more traffic on the line, the higher
00:14:52.870 -->
00:14:55.230the cost is. So if there's traffic on the line
00:14:55.230 -->
00:14:57.629between us and the power source, the generating
00:14:57.629 -->
00:14:59.429source, then there could be increased costs for
00:14:59.429 -->
00:15:01.870our customers. So in some ways, if a data center
00:15:01.870 -->
00:15:04.090has a choice between just outside our service
00:15:04.090 -->
00:15:07.649territory and just inside, we might prefer it
00:15:07.649 -->
00:15:10.019be just inside because we can more control. those
00:15:10.019 -->
00:15:12.500costs? That's correct. Not only control the costs,
00:15:12.559 -->
00:15:14.960but also the community can receive some of the
00:15:14.960 -->
00:15:16.820benefits of having the data center within our
00:15:16.820 -->
00:15:19.120service territory, or at least within city limits
00:15:19.120 -->
00:15:22.840or within our county, such as property tax revenue
00:15:22.840 -->
00:15:25.500and some of the payment in lieu of taxes that
00:15:25.500 -->
00:15:27.399we provide because of the power. Interesting.
00:15:28.080 -->
00:15:30.240Okay. Well, I think that's a great overview.
00:15:30.460 -->
00:15:33.240And now I want to dig in a little bit on some
00:15:33.240 -->
00:15:35.659fact versus fiction, because there, as we mentioned,
00:15:35.879 -->
00:15:37.820whenever there's an onslaught of information
00:15:37.820 -->
00:15:40.919out there, there's tends to be some misinformation
00:15:40.919 -->
00:15:43.679as well. So I want to talk a little bit about
00:15:43.679 -->
00:15:47.179those items, if it's okay. The first, of course,
00:15:47.240 -->
00:15:50.519is all data centers use a ton of energy. Is that
00:15:50.519 -->
00:15:52.320fact? Is that fiction? Somewhere in between.
00:15:52.720 -->
00:15:55.980So all data centers use some energy. It depends
00:15:55.980 -->
00:15:57.960on the size of the data center, but relative
00:15:57.960 -->
00:16:00.480to other businesses, they use a lot of energy.
00:16:00.639 -->
00:16:04.009So the size of a data center... On the outside,
00:16:04.230 -->
00:16:06.450it may be deceptive because there's a lot going
00:16:06.450 -->
00:16:09.169on inside when it comes to computing power. So
00:16:09.169 -->
00:16:10.929as I mentioned, some data centers that have been
00:16:10.929 -->
00:16:12.870proposed to us are as small as 10 megawatts.
00:16:12.870 -->
00:16:15.129That would be equal to some of our largest customers
00:16:15.129 -->
00:16:16.710currently. Yeah, that's what I was going to say
00:16:16.710 -->
00:16:18.490is we have some, as an example, some manufacturing
00:16:18.490 -->
00:16:20.669facilities that might use 10 megawatts. That's
00:16:20.669 -->
00:16:22.730exactly right. Some data centers that have been
00:16:22.730 -->
00:16:25.350proposed to us are in the multiples of 500. And
00:16:25.350 -->
00:16:27.669so that would be multiples of our current city
00:16:27.669 -->
00:16:31.440usage of electricity. Any data center uses a
00:16:31.440 -->
00:16:33.340lot of power, but they do vary amongst themselves.
00:16:34.399 -->
00:16:36.980Next question, all data centers use a ton of
00:16:36.980 -->
00:16:42.019water. Is that true? That's actually false. Data
00:16:42.019 -->
00:16:44.580centers previously may have used a lot of water.
00:16:44.659 -->
00:16:46.340We haven't experienced that here in Springfield.
00:16:46.639 -->
00:16:49.460But latest technology is what's called closed
00:16:49.460 -->
00:16:52.580-loop cooling, and that wouldn't involve a pass
00:16:52.580 -->
00:16:54.320-through of water. It would involve recirculating
00:16:54.320 -->
00:16:56.980water. So my understanding of the current technology,
00:16:57.159 -->
00:16:58.740and we have... companies here in Springfield
00:16:58.740 -->
00:17:01.600that provide that technology, is that they don't
00:17:01.600 -->
00:17:04.079use any more water than a typical convenience
00:17:04.079 -->
00:17:07.420store or restaurant, depending on the size, of
00:17:07.420 -->
00:17:09.720course, of the data center. But overall, less
00:17:09.720 -->
00:17:11.440water than what people are concerned about. And
00:17:11.440 -->
00:17:13.900is that something that we could require of them?
00:17:13.980 -->
00:17:15.960As an example, if they were to come to town,
00:17:16.019 -->
00:17:17.619we could say, sure, you can come, but you have
00:17:17.619 -->
00:17:20.259to utilize this closed -loop system? That's certainly
00:17:20.259 -->
00:17:22.339something that we could do. So part of our application
00:17:22.339 -->
00:17:25.259process does involve a question about what type
00:17:25.259 -->
00:17:27.630of water would be used. what type of cooling
00:17:27.630 -->
00:17:30.130system the data center would have. And so we
00:17:30.130 -->
00:17:33.000do have some control over that. Again, one of
00:17:33.000 -->
00:17:34.900the benefits of having that here in our location
00:17:34.900 -->
00:17:36.940is that we can provide those requirements and
00:17:36.940 -->
00:17:38.579make sure that they're being complied with. Very
00:17:38.579 -->
00:17:41.440good. One of the other things I've heard is that
00:17:41.440 -->
00:17:45.019some of these large data centers are scoping
00:17:45.019 -->
00:17:48.279out many areas and maybe even going through the
00:17:48.279 -->
00:17:50.660permitting process in a number of areas only
00:17:50.660 -->
00:17:52.960to say at the last minute, nope, we chose this
00:17:52.960 -->
00:17:55.740one instead of that. How are we at City Utilities
00:17:55.740 -->
00:17:57.980sort of protecting our customers from a data
00:17:57.980 -->
00:18:00.099center that says it's going to come to town?
00:18:01.829 -->
00:18:04.369a lot of money to get them here, and then they
00:18:04.369 -->
00:18:07.210skip town. Right. I believe that is true, just
00:18:07.210 -->
00:18:09.450like any economic development project, that the
00:18:09.450 -->
00:18:10.910developers are looking at multiple locations.
00:18:11.369 -->
00:18:14.069Data centers in particular are looking at multiple
00:18:14.069 -->
00:18:16.549locations because they need that power availability,
00:18:16.670 -->
00:18:19.349and the process to determine that takes a time.
00:18:21.230 -->
00:18:24.029hard to understand what the real aspect or load
00:18:24.029 -->
00:18:27.529is or what it looks like because there are several
00:18:27.529 -->
00:18:30.309tire kickers, if you will. So again, we've developed
00:18:30.309 -->
00:18:33.490our large load application process and we require
00:18:33.490 -->
00:18:35.849deposits to be provided to offset our staff time
00:18:35.849 -->
00:18:38.529that's involved in reviewing those. We have about
00:18:38.529 -->
00:18:40.450a dozen members of our large load task force
00:18:40.450 -->
00:18:43.150and others who interact with potential data center
00:18:43.150 -->
00:18:45.569and other large load developers on an ongoing
00:18:45.569 -->
00:18:48.329basis. They spend an average of about three hours
00:18:48.329 -->
00:18:51.410per day to doing that. have significant time
00:18:51.410 -->
00:18:53.130involved, but then we have the requirement for
00:18:53.130 -->
00:18:55.650the deposits to offset those costs. And so that
00:18:55.650 -->
00:18:57.769deposit being that even if they were to leave,
00:18:57.970 -->
00:19:00.170that still, we would use that to reimburse our
00:19:00.170 -->
00:19:01.890time and whatever other expenses there were.
00:19:02.069 -->
00:19:04.930That's correct, yes. Okay, very good. The other,
00:19:04.990 -->
00:19:07.430another misconception is all data centers are
00:19:07.430 -->
00:19:09.670bad for our environment and put our resources
00:19:09.670 -->
00:19:13.490at risk. True? False? Somewhere in between? I
00:19:13.490 -->
00:19:15.710would say it's false, although there are some
00:19:15.710 -->
00:19:17.609who may be that. Again, we haven't seen that
00:19:17.609 -->
00:19:20.529in Springfield. We have had the data in the Springfield
00:19:20.529 -->
00:19:23.130Underground for a number of years and haven't
00:19:23.130 -->
00:19:25.569seen any of those adverse effects. So not all
00:19:25.569 -->
00:19:27.450data centers are created equal. Our goal is to
00:19:27.450 -->
00:19:29.089protect our customers and our community through
00:19:29.089 -->
00:19:31.569our process. You mentioned a new rate structure
00:19:31.569 -->
00:19:34.230that will be put in place for large load customers
00:19:34.230 -->
00:19:37.809like data centers. Is that a rate that will at
00:19:37.809 -->
00:19:40.809all negatively affect our existing customers?
00:19:41.230 -->
00:19:43.750The goal of that rate is to make sure that it
00:19:43.750 -->
00:19:45.650doesn't negatively affect our existing customers.
00:19:45.809 -->
00:19:48.769So what we do with all types of rate design is
00:19:48.769 -->
00:19:50.700to make sure to include all costs to what we
00:19:50.700 -->
00:19:53.099call the cost causer, and that's the customer
00:19:53.099 -->
00:19:55.160who's in that rate class. And so we will look
00:19:55.160 -->
00:19:57.160at all the things that go into providing power
00:19:57.160 -->
00:19:59.940to a large load and make sure that those costs
00:19:59.940 -->
00:20:02.240are covered within the rate. So bottom line,
00:20:02.299 -->
00:20:04.119you're talking to your neighbor who says, I hear
00:20:04.119 -->
00:20:05.900about all these data centers coming to town.
00:20:06.000 -->
00:20:07.619What are you doing about it, Dwayne? What's the
00:20:07.619 -->
00:20:09.839bottom line for your neighbor? Bottom line is,
00:20:09.859 -->
00:20:11.279is we're putting our current customers first.
00:20:11.460 -->
00:20:15.339So we have the ability to say no, and we have
00:20:15.339 -->
00:20:17.339the ability to create requirements, and we're
00:20:17.339 -->
00:20:19.279dedicated to doing that for the benefit of our
00:20:19.279 -->
00:20:21.039customers and our community. Now, you mentioned
00:20:21.039 -->
00:20:23.059we have the ability to say no, but there are
00:20:23.059 -->
00:20:25.299some caveats to that. That's correct. Let's talk
00:20:25.299 -->
00:20:27.119about that again. Sure. We have the ability to
00:20:27.119 -->
00:20:29.859say no if the potential data center doesn't check
00:20:29.859 -->
00:20:32.759all the boxes in terms of state and federal requirements,
00:20:33.059 -->
00:20:34.900local requirements, and then our own utility
00:20:34.900 -->
00:20:36.960requirements as well. And also, at the end of
00:20:36.960 -->
00:20:38.839the day, it's not necessarily a city utilities
00:20:38.839 -->
00:20:41.279decision as to whether or not a data center can
00:20:41.279 -->
00:20:44.700come to town. There are a lot of permitting regulations
00:20:44.700 -->
00:20:48.119and other things involved. Can you talk a little
00:20:48.119 -->
00:20:50.339bit about the process as well? Sure, that's correct.
00:20:50.480 -->
00:20:52.160So there's multiple processes going on at the
00:20:52.160 -->
00:20:55.180same time, and we control the utility side of
00:20:55.180 -->
00:20:57.599the process. But there's also land use. There's
00:20:57.599 -->
00:21:00.200also federal and state regulations for any types
00:21:00.200 -->
00:21:01.940of businesses, but particularly for data centers,
00:21:02.099 -->
00:21:05.680even new ones that are being discussed at this
00:21:05.680 -->
00:21:07.440time at the state and federal level as well.
00:21:07.799 -->
00:21:10.859So all of those things are outside of the utility
00:21:10.859 -->
00:21:13.299process but are going on at the same time. That's
00:21:13.299 -->
00:21:14.779great. Is there anything else you wanted to talk
00:21:14.779 -->
00:21:16.819about that you feel like we haven't? It seems
00:21:16.819 -->
00:21:20.599like we've addressed a lot of issues. The primary
00:21:20.599 -->
00:21:22.779ones that are affecting our customers, bottom
00:21:22.779 -->
00:21:24.559line, we're looking to protect our customers.
00:21:26.039 -->
00:21:28.039Anything else you feel like we haven't addressed?
00:21:28.359 -->
00:21:30.559I'd just like to reiterate that our goals are
00:21:30.559 -->
00:21:32.380first and foremost to take care of our current
00:21:32.380 -->
00:21:34.259customers and protect them and our community.
00:21:34.559 -->
00:21:36.839But the way we do that is through thoughtful
00:21:36.839 -->
00:21:39.859planning. Make sure to try to have clear communication.
00:21:40.119 -->
00:21:42.759This is a part of that. But then the bottom line
00:21:42.759 -->
00:21:44.819is always protection. I appreciate that. Dwayne,
00:21:44.900 -->
00:21:46.359thank you so much for being here. Thank you.
00:21:46.480 -->
00:21:48.980And for those of you who are looking for more
00:21:48.980 -->
00:21:50.819information about data centers, we have a website
00:21:50.819 -->
00:21:53.720dedicated to city utilities process. It's at
00:21:53.720 -->
00:21:56.779cityutilities .net slash data centers. We hope
00:21:56.779 -->
00:21:58.599you'll take a look there. If you have questions
00:21:58.599 -->
00:22:02.079for us, be sure to send those to social at cityutilities
00:22:02.079 -->
00:22:04.619.net. And speaking of socials, be sure you're
00:22:04.619 -->
00:22:07.940following us on Facebook, X, Instagram, and TikTok.
00:22:08.180 -->
00:22:10.500We have two TikTok channels at city utilities
00:22:10.500 -->
00:22:13.539and the TikTok page dedicated to this. podcast
00:22:13.539 -->
00:22:16.500is That's Shocking Pod. New episodes are released
00:22:16.500 -->
00:22:18.859every first and third Wednesday of the month
00:22:18.859 -->
00:22:21.720at 8am. And next episode, we're talking about
00:22:21.720 -->
00:22:23.539new battery sites, which Dwayne kind of teed
00:22:23.539 -->
00:22:25.519up for us. We're going to talk about what they
00:22:25.519 -->
00:22:28.240are, how exactly they'll be used, how they might
00:22:28.240 -->
00:22:30.700be used now and in the future. Again, we thank
00:22:30.700 -->
00:22:33.200you for being here. And we're going to go off
00:22:33.200 -->
00:22:34.920the grid for now. But thanks for plugging in
00:22:34.920 -->
00:22:37.259and allowing us to brighten up your day. Stay
00:22:37.259 -->
00:22:38.160energized, Springfield.