Data centers have quickly become one of the most talked-about topics in the electric industry. Chances are you’ve seen news stories or social media posts raising concerns about data centers and their impact.
We’ve also had many questions about data centers related to concerns about blackouts, rising power costs, water usage, noise and overall community impact. These are valid concerns, and I want you to know this topic is something Central takes seriously.
After spending considerable time researching and discussing data centers with your board of trustees, our position is simple: our top priorities are affordability, reliability and safety. Any new electric load, including a data center, that compromises our ability to meet those three priorities will not be served.
Central’s terms and conditions of service, approved by the Board of Trustees, outline Central’s line extension policy and the costs that will be recovered for any infrastructure extensions or upgrades. This ensures equitable and fair recovery of costs associated with serving new loads. Additionally, new loads, especially large loads, are only connected if there is sufficient generation and transmission capacity available through our power providers, KAMO and Associated Electric Cooperative Inc. (AECI), to meet both current needs and projected future demand.
This is where understanding the three-tiered cooperative system becomes important. Central owns and maintains the distribution system, which is the poles and lines that deliver power to your homes and businesses.
KAMO provides transmission services, moving large amounts of electricity across the region, and AECI is responsible for generating that power. Serving large new loads requires coordination and agreement across all three tiers to ensure the system remains reliable and affordable for members.
AECI is experiencing system growth and is investing in new generation resources, such as the Ripley Energy Center east of Stillwater. New resources are necessary to meet growing demand but are also expensive and will place pressure on electric rates over the next several years, independent of any data center development.
It’s also important to note that data centers are not inherently negative for an electric cooperative. In fact, under the right conditions, a data center could provide a benefit to our membership. The typical consistent high load factor could help improve the overall system load factor, leading to rate stability.
As a cooperative, we are obligated to provide service to members and potential members who meet our terms and conditions of service, but that obligation does not override our responsibility to protect existing members and the equity that has been built over decades.
This is a complex and fast-evolving issue, and one we will continue to monitor closely. Our commitment is to ensure that decisions made today protect the reliability and affordability of your service tomorrow.