business.

I'm Ken Buer.

We have a very special program for you this evening.

That over there, that's a data center, the Ark data center.

It's been here since 2012, processing information, holding account information, and working for many different clients across the country.

It's completely different from what's being proposed for Hermantown by Google.

And that is a hyperdata center.

Just like nature a pores a vacuum, controversy a doors a vacuum.

And that's what we have.

A vacuum of information about data centers.

Tonight on In Business, we'll try to provide some of that information for you.

We'll talk to a professor from the University of Minnesota Duth computer science department.

We'll also talk to a vice president from Minnesota Power.

They've got a contract to supply the energy for this mega data center.

We'll also talk to a state senator who wants to put some guard rails on maybe this and future developments of these mega processing centers across the state of Minnesota.

We'll also talk to the chamber of commerce from Hermantown and a small business person in the technology field who's also an environmentalist and brings up an extremely interesting point that I haven't heard mentioned before.

Our job is to fill a void, a vacuum if you will, with knowledge from experts and let you make your own decision.

That's tonight on In Business.

Welcome to In Business.

I'm Ken Ber.

A proposed data center in Hermantown has quickly become one of the most talked about economic development projects in the entire region.

The project proposed by Google would represent a massive investment and could bring new infrastructure, jobs, and technology to the area.

But with a project of this scale comes a lot of questions.

What exactly is a data center?

Why are they being built in communities like Hermantown?

And what does it take to support a facility like this?

To start answering those questions, we spoke with a computer science professor at the University of Minnesota DUTH to learn the basics.

Let's take a look.

This is in business.

We're talking about the proposed data center for Hermantown.

A very controversial subject.

Controversy is spawned in part by lack of information.

Like nature, a pores a vacuum.

The same in civil discourse.

Without information, a vacuum exists.

And sometimes misinformation leads to different discussions than would normally take place.

One of the things of in business is we try to give a balanced perspective.

And to help us do that from the University of Minnesota Doo's computer science department, we have Dr.

Peter Peterson with us.

Dr.

Thank you for joining us.

Hi, my pleasure.

Let's start out with the basics.

What's a what's a data center?

Sure.

So uh a data center is basically a really big building or set of buildings that has uh you know electricity and cooling and internet connections that can support hundreds or at this scale thousands of computer servers typically in you know vertical racks with a bunch of things stacked in there like pizza boxes uh row after row of of servers.

So basically everything that's on the internet that you access with your phone or computer or any other internet connected device uh connects to servers um mostly nowadays in a data center.

The old days maybe those servers were in the building that the company owned.

Nowadays mostly those are in these centralized data centers that are all over the world.

the power and water consumption um of a data center is going to be more than a conventional data center because GPUs use more electricity um and electricity turns into heat in a computer and that requires cooling and so they will use more electricity you know for the same size data center or you know computation or computation um and therefore they're going to use more cooling as well.

how companies and data center designs solve those problems uh can go a bunch of different ways.

So, one of the things that has been controversial in the past is when data centers draw groundwater to use for cooling and then um throw that groundwater away, for example, putting it into the municipal sewer system or something like that.

Um the latest stories that I have heard are that the proposed data center isn't going to be drawing water and then throwing it away.

Um but of course that's based on the current best knowledge that we know.

Um plans can change.

Um and similarly with electricity, my understanding is that the current plan is that Google will invest a bunch of money in electricity infrastructure um and electricity storage in order to help make the impact locally on power consumption or on power price minimized for consumers.

But of course, you know, that's just what uh the plan is right now and sometimes plans change.

So, one of the controversies surrounding this uh der of information is how many people are actually going to be involved?

Obviously, it's going to take a small army to build this, but after it's built and running, what are the uh employment opportunities and what do you need to work in a data center?

As far as ongoing uh employment, certainly there will be like uh physical plant type people who are there to maintain electricity and power and and janitorial staff and so on.

I don't know how many people specifically that would be, but they're going to need staff to do that.

Um the technical staff, uh what I've read is 40 at a minimum up to 100 or more data center technician positions.

Um, and those people are uh they do IT work essentially um focused on the hardware of the data center, right?

So they're not really writing software or developing apps or they're not fielding customer service requests from I can't get into my Gmail or something like that.

All they're doing is uh replacing a hard drive in a machine if if it's gone down.

By all they're doing, I don't mean I'm not minimizing.

I'm just saying it is like laser focused on the hardware support, right?

What qualifications would one of these uh technical people working in the data center have to have?

You don't need to have a college degree to work as a data center technician, assuming that you have kind of the ability to diagnose and troubleshoot and fix computer systems.

Um, preferred qualifications include, you know, experience doing this kind of work.

Um, you know, certainly if you had a college degree in information systems or IT or computer science, you would be qualified to do that work.

Now that we have a better understanding of what a data center is, we wanted to hear from someone in our local technology community.

Data centers support the digital services many businesses rely on every day.

And some in the region's tech sector are watching this proposal very closely.

We spoke with a local business owner in the IT field about what a project like this could mean for the region.

This is in business.

I'm Ken Buer.

We're taking a deep dive into what some would say is a deep controversy concerning the data center proposed by Google for Hermantown.

We're talking to Patrick Mali.

He is the owner of Duthian Networks and is our guest right now.

It's a small business dealing with connectivity fiber optics.

He's a technical expert and a consultant.

and we want to talk a little bit about how a small business like yours looks at a huge investment that may be made in the data center.

What does it mean to you when you first heard about it?

So when I first heard about this uh coming to the area being in the connectivity world uh for the last 23 years uh I can tell you that we don't have a significant amount of communications infrastructure in Duth.

Um when the first data center came to our area and that being invol uh now Arc data center um that drove a significant amount of connectivity into the area where there used to be three or four fiber players in the market.

There's now 13 to 14 fiber carriers and they come here because of that data center.

Now when you look at something the scale of the Google data center uh that's looking at coming in that drives infrastructure and not just water and sewer and power but connectivity.

Uh it's one of the one of the primary needs that they'll have is to get that connectivity and that data out to their consumers.

a small business like yours.

Uh when you see this huge huge huge investment, what is the advantage to somebody in your business or small business in general?

I mean really it's it's that infrastructure access to to that communications infrastructure.

Um we that will open up um the small business community for better connectivity outside of the um the downtown area, we'll say, right?

There's there's great fiber connectivity in some areas of our market, but you get even a mile outside of downtown Duth and good luck finding fiber.

Good luck finding that infrastructure that you can um reliably run your business in.

What questions do you have about uh a huge data center?

I mean, as you say, we really don't know what the strength of AI is going to be.

It's just beginning and at the same time, we really don't know the extent of what is being planned by Google, right?

Um my questions, I'm I'm also an environmentalist.

Uh and uh my concerns are more um specific to the project or the site itself.

uh runoff, those types of things, real um immediately impactful things.

How are they going to handle runoff?

How are they going to handle um you know uh runoff water retention and those types of things?

Not so much their water usage or their power usage.

They have that figured out.

And I believe that our public utilities commission in Minnesota is uh very aware of what these AI data centers use and will make sure that we as consumers with Minnesota Power have um have the right safeguards in place to make sure that we're not subsidizing with our costs the success of a Google.

We get a big tech giant like Google saying this is a place to be.

Does that attract other tech giants or even medium-sized tech companies or more people like you?

Yeah, definitely.

Um, once the infrastructures once that first one goes in, right, the infrastructure is built to meet the needs of that data center, right?

So, there will be more.

I can almost guarantee that you they are going to look at that particular area see it as data center friendly whether it is or not is a whole another question um but they see okay there's one the the second step is easier to take right to to come in behind so so yes absolutely it's a more favorable environment um I think the biggest thing is the infrastructure that it drags along with it you know we've seen uh we've seen just recently Iman uh stepping forward and saying that they are going to build you know 60,000 fiber passings in duth and superior so when you have a data center people are going to need connectivity to take advantage of it and that's I think what we're seeing in that next investment and we're getting f that fiber going in the ground that's what I've been working toward my whole career uh is rural deployment of broadband Patrick Mali is the owner of Duthian Networks He's been our guest on in business.

Data centers don't just require land and buildings.

They also require a significant amount of electricity.

Power demand is often one of the biggest factors when companies decide where to build these facilities.

The regional utility, Minnesota Power, has already agreed to supply the electricity needed for the proposed data center.

We wanted to know what that means for the region's power grid and whether a project of this size could impact energy supply or electric rates for other customers.

In business continues its look at a proposed data center for Hermantown.

And with us with a crucial part of the data center is Julie Pierce, vice president of strategy and planning for Minnesota Power.

And we're talking about the power component.

Your company's already signed a contract with Google to supply the electricity for what could be a hyper data center.

What does that mean?

Well, we're so excited that a global technology company like Google has uh selected Minnesota Power to provide the power for its new facility it's considering in Hermantown.

It's a great thing for Northeast Minnesota.

It's a great thing for this region.

And so we're very pleased to have the uh the opportunity to serve uh this this new customer.

And does Minnesota Power have the capacity if this thing keeps growing and growing and growing?

What does that mean?

Yeah, so as an electric service provider, we are constantly monitoring and looking at the grid and what it might need to serve new customers.

Uh customers come and go all the time.

Residential customers come and they leave.

Commercial customers come and they leave.

And so we're in a continuous state of planning.

So, as we uh considered the possibility of providing power to this new facility in Hermantown, uh we considered all of our infrastructure.

What do we have available existing and what would we need new?

We're really excited that this new facility can join the system here in Northeast Minnesota and Hermantown.

Um with, you know, very minimal upgrades.

We are proposing uh to add 700 megawatts of new power, new clean power to our existing fleet and strong robust system to serve them.

And then any interconnection uh that they might need to their actual facility, they will pay for and cover through uh an interconnection uh agreement that we sign with them.

One of the concerns of course are small rateayers that this will affect them adversely.

Yeah.

Well, this is where being a Minnesota resident is really a benefit.

We are in one of the few states in the nation that have customer protections for electric service like no other.

We have multiple layers of protections.

First of all, we are a regulated utility.

That means that any rates uh increase, decrease or change needs to be approved by the public utilities commission.

And we're heavily regulated on how those rates go up and down.

We're also protected because in ground breaking legislation last year, Minnesota passed a new law that specifically says if a data center comes to our state, it cannot increase the cost to existing customers.

So Minnesota Power takes that very seriously.

Julie Pierce, uh, vice president of Minnesota Power for Strategy and Planning.

Thank you very much for being on In Business.

Thank you.

Now that we have a better understanding of what a data center is and how it works, the next question is what a project like this could mean for the local business community.

The proposed facility would be built in Hermantown, a city that has seen significant commercial growth over the past several years.

We spoke with the Hermantown area Chamber of Commerce to hear how local business leaders there are viewing this potential development.

In business continues and we are at ground zero for a controversial data center being proposed for Hermantown.

We're meeting at the Hermantown Chamber of Commerce where president and CEO Kim Parmter.

Kim, thanks for taking the time to share the chamber's view of this proposed Google data center.

Thank you for having me, Ken.

I appreciate being here.

So, for a community the size of Hermantown and then the investment the size of what Google is forecasting, what does that mean for a town this size?

This is opportunity like we've never seen before.

I think it's it's almost hard to fathom what this could mean.

uh for the region.

Uh jobs, let's just start with jobs.

Uh lots of jobs, increased infrastructure, uh connecting to the proposed Google data center site to the existing infrastructure is an investment of over $und00 million.

And um along with that comes the opportunity for continued development in that area, that part of Permantown.

You did talk jobs as being one of the major attractions for the community, but there are two different types of jobs.

There's obviously this army of uh employees who will be building this over what I understand could be 5 to 8 years.

What does that mean to that kind of um trades person?

Sure.

That industry is going to see growth unlike they've seen in decades.

So, what we're talking about first is construction jobs.

And we're probably from what I understand speaking with Google last week, uh, pretty much every trades person in the Northland will have jobs, which is a pretty powerful statement.

and we'll probably be seeking trades folks from around um around their region or outside of our region that would travel for these jobs as well because of the multiple opportunities um from I you know involved in construction from clearing and concrete pouring to electrical to welding all of it.

So that's that's pretty incredible.

Kim Parer is our guest on in business.

We're talking about the proposed data center for Hermantown and uh another question is these long-term jobs.

Any idea from Google how many people will have a long-term employment at the data center if it's built?

What I understand is that there will be approximately four buildings that will be built over the course of 10 years.

And in each building up to 100 employees now that breaks down like this.

There's about 50 employees that would work for Google proper per building and the other 50 people would be vendor services.

So, we're looking at security, uh, catering and other associated um, business type services that would be necessary for a company of this size and scope.

So, I believe that Pine Island um, in Minnesota that was recently announced is talking about 100 jobs uh, permanent Google jobs.

our project would be much bigger than that.

So from Hermantown standpoint uh representing the chamber of commerce has the chamber taken uh side on this and what is it?

Yes we have.

We are in support of this project because it means jobs, it means growth and it also means um an incredible partner in our tax base.

So the our largest contributor to the tax base, right?

Uh so what we would see is our our businesses should be supportive of uh lower taxes for businesses and also for homeowners.

And that's incredibly important.

That should be what every community government strives for is to, you know, um, keep keep the taxes low for the homeowners so that they want to continue to stay here and and settle down and raise their families here and be great contributors to our our region.

Kim Parer, president and CEO of the Humbertown Chamber of Commerce.

Thank you very much for joining us on In Business.

Thank you, Ken.

It was a pleasure.

And for our final segment tonight, large-scale data centers are also raising policy questions at the state level.

As more of these projects are proposed around the country, some lawmakers are asking how communities can ensure transparency and understand the full impact of these developments.

Doo State Senator Jennifer Mchuan has proposed legislation aimed at improving transparency when large data center projects are being planned.

We spoke with her about what that legislation would do and why she believes it's necessary.

Joining us now on In Business is 8th District State Senator Jennifer Mchuan representing the city of Duth.

Thank you for joining us.

We want to talk a little bit about some legislation you're sponsoring in this legislative session coming up in St.

Paul that means to extend or even improve the protection of rateayers when a hypers sensitive uh super data center comes into their district.

Yes, that's correct.

Um, I actually have a couple of pieces of legislation uh that have to do with data centers this year.

I think the one that I'm um maybe most excited about right now is uh would essentially be a temporary moratorum on permitting for these hypers scale data centers and um would set forth the creation of a kind of working group or task force that would over the course of a year come together and create policy recommendations for the legislature in all sorts of areas that we need better guard rails for these data centers um that are wanting to come in and develop in our state and then the second year of the moratorum would be that year that the legislature could consider those recommendations from those experts and then you know imp implement the ones that we had the support to implement.

So, what I'm proposing is that um it it is really important for the people of Minnesota to be able to get out in front of some of these developments because they stand to be so consequential to our communities throughout the state.

And we are our laws around data centers are really designed at this point for um the smaller type warehouse size data center that people are more familiar with and that we have had in Minnesota for many years.

Our regulations right now are set for those.

They are not set for the type of hyperscale enormous data center development that we are now seeing trying to come into the state that really would use um if all of the proposals were built right now.

I think that the we've heard some of the statistics that they would use more water, more energy than everything all of the people and all the use right now in the entire state.

So they're huge users of water, huge users of energy.

What kind of more information might you want from say the companies that would help you formulate this?

Are you getting that kind of cooperation?

Yeah.

No, that's a great that's a great question and we're not.

Um, I think that right now we are in a situation where we really are at the mercy of the company in terms of the timing when they're going to tell us what their plans are, the details are, and we're at the mercy of the company in terms of whether they will follow through on some of the promises that they're making.

And we see that, for example, with the latest announcement that the proposer for the hyperskll center for Hermantown is the Google Corporation, which we're all very familiar with.

um and they have some actually really good ideas and um things that they've said that they want to do in terms of energy use and water use and and if the the data center is built, I'm really glad that that company is coming out and saying, "Well, we want to do these sort of innovative things with this data center, that's great."

Um but I think right now they could change their mind at any time, right?

Is it it's not the the people of Minnesota who are setting the bar for that corporation and saying okay if you build this here we want you know this type of energy um like closed system for water you know guaranteed that our our rate users are not going to be affected by your energy use.

We you know we're not setting that bar right now in the way that we should be.

we're really at the mercy of these corporations following through, keeping their promises, coming up with innovative good ideas.

So, um I I want that to be switched so that we are we are calling the shots at least in terms of sort of a baseline of what we would expect when a development like this comes through.

And that's not even, you know, touching the this those secrecy issues that I think a lot of people in the Northland have been especially concerned with around non-disclosure agreements.

You know, the idea of an enormously powerful and wealthy corporation kind of waltzing into your community, but keeping behind closed doors, talking only to select elected officials and actually asking them and successfully getting them to sign non-disclosure agreements so that they're not going to talk about the proposed project.

That's a real betrayal of trust on a lot of levels.

And so it it is hard I think for a lot of people now that Google has come out and said well this is us.

It's a little bit hard to say well why didn't you say that from the very beginning if if this is a a good idea and it's going to be beneficial for our community and and this is something we want then you should have come in telling us all about your great idea so that people could get behind it.

But right now it feels a little bit like a bait and switch.

We're just not sure if we can trust what they're saying.

State Senator uh Jennifer Mchuan representing the city of Duth uh talking about AI, talking about data centers and uh talking with us on In Business.

Thank you very much.

I'm Ken Buer.

Thanks for watching In Business.

If you missed any parts of tonight's show, you can always watch it at pbsnorth.org or listen on Mondays at 5:30 on the North 1033.

Thanks again for watching and until next time, let's take care of each other.