Data centers

The PUC's role

The Minnesota Public Utility Commission's primary charge is to ensure that utilities providing electricity to data centers continue to provide safe, reliable service at just and reasonable rates for all customers.

Specifically, the PUC’s responsibilities regarding data centers include:

Protecting ratepayers: Ensuring that the costs of building, upgrading, and maintaining electrical infrastructure to serve a data center are not shifted to other utility customers.
Ensuring reliable service: Verifying that utilities have the capacity to meet the significant energy demands of data centers while maintaining grid stability for all Minnesotans.
Reviewing rates and agreements: Evaluating proposed Electric Service Agreements (ESAs) and special utility tariffs tailored to very large energy customers.
Permitting infrastructure: Overseeing the permitting of energy infrastructure, such as transmission lines or backup power supplies, that may be required to support the project.

Regulatory guardrails and protections

The PUC has several ways that it regulates data centers in Minnesota including:

Very large customer tariffs
The Minnesota Legislature established clear guidelines under Minn. Stat. §§ 216B.1622 and 216B.1623 (2025) to protect the public interest. These laws include:
- Cost responsibility: Utilities cannot pass the costs of serving a data center to other ratepayers. Data centers are required to pay for all necessary electrical system upgrades and buildouts.
- Clean energy compliance: Data centers must comply with the state’s Carbon-Free 2040 benchmarks. Utilities must demonstrate in their plans how service to these large customers will not interfere with meeting these state-wide mandates.
- Community support: Qualified large-scale data centers are required to pay an annual fee ($2 million to $5 million, based on a data center’s peak demand) to the Department of Commerce’s ECO fund, which supports low-income home weatherization.
- Rate classifications: Utilities are required to propose special electric rates (tariffs) for very large customers that clearly account for the unique energy demands of these facilities.
Electric Service Agreements (ESAs)
The Commission is currently reviewing the following Electric Service Agreements:

Minnesota Power and Harmony Group, LLC Status:
- Status: Filed on March 26, 2026.
- Details: An ESA between Minnesota Power and Harmony Group, LLC (a subsidiary of Alphabet/Google) for a data center in Hermantown, Minnesota.
- Public Comment: The comment period is open until August 28, 2026. Following the close of the comment period, the Commission will hold a public meeting to deliberate and decide on the agreement. Here are the public comment details
- Docket 26-159
Xcel Energy and Echo Zone, LLC
- Status: Filed on April 14, 2026.
- Details: An ESA between Xcel Energy and Echo Zone, LLC (a subsidiary of Google) for a data center in Pine Island, Minnesota.
- Public Comment: The comment period is open until September 8, 2026. Following the close of the comment period, the Commission will hold a public meeting to deliberate and decide on the agreement.
- Docket 26-170
Permitting requirements for data center backup generation
Minnesota law requires that electric generation facilities over 50 MW of certain fuel types must first obtain a Certificate of Need (Minn. Stat. 216B.2421) and Site Permit from the Commission (Minn. Stat. 216I.05). This includes proposals for backup generation at a data center.
- Carbon Free Standard and energy storage projects: Solar and wind projects used for Carbon Free Standard compliance and energy storage systems are exempt from the Certificate of Need requirement.
- Cost and environmental impact: A key requirement for a Certificate of Need is an evaluation of alternative means of meeting the specified energy demand. This alternatives analysis covers both costs and impact to humans and the environment.
- Renewables must be considered: A Certificate of Need may not be issued for a non-renewable project unless the applicant has thoroughly explored using renewable resources.
- Environmental review required: To receive a site permit, the following types of projects must undergo an Environmental Assessment by the Commission:
  - Generation between 50-80 MW
  - Natural gas and solar projects at least 50 MW
  - Wind projects at least 5 MW
  - Energy storage at least 10 MW
- Environmental Impact Statement required: All other projects needing a site permit, including 80 MW or greater generation, require an Environmental Impact Statement

More information

Environmental review: For information on data center environmental review processes, please visit the Environmental Quality Board (EQB) website.
State regulations: You can review the full text of Minnesota Session Laws 2025, Chapter 12 via the Office of the Revisor of Statutes.
Other Minnesota data center regulations: The Department of Employment and Economic Development (DEED) Minnesota Business First Stop permitting website has a regulatory guide handout that details government oversite of data centers.