Data centers in Minnesota

📜 State laws

2025 data center law (signed June 2025) · June 14, 2025
In its June 2025 special session the Legislature passed a data center law. It took effect the next day. Main parts: (1) the state defines a 'data center' as a site built for 100 megawatts (MW) of power or more; (2) big data centers pay a yearly fee of $2 million to $5 million, based on their power use, which goes to energy-saving help for low-income homes; (3) the Public Utilities Commission (PUC) must set up a separate rate group for very large customers by December 15, 2026, so their costs are not passed to other customers; (4) the DNR gets new powers for data centers that would use over 100 million gallons of water a year; (5) electricity used by data centers is no longer free of sales tax; (6) workers building large data centers that get the tax break must be paid prevailing wage. Source

Ban on secret deals (NDAs) by cities and counties did not pass, 2026 · May 2026
HF 4077 / SF 4379 would have stopped cities and counties from signing secret deals (non-disclosure agreements, NDAs) with companies, and made them disclose current ones. It had support from both parties. A House committee passed it unanimously, but it was sent to a second committee on March 23, 2026 and stalled there. The Senate version passed two committees but never got a full vote. A narrower data-center-only bill (SF 4548) also stalled. The 2026 session ended without a ban. News reports say Farmington, Hermantown and Pine Island signed NDAs for data center projects. Source

Statewide pause (moratorium) on data centers did not pass, 2026 · May 2026
HF 4888 would have stopped the state and local governments from issuing permits for data centers until one year after the PUC finishes a full report on their effects (due by July 1, 2027). It was sent to the House Energy committee on April 9, 2026 and never got a hearing vote. It did not pass. Source

Bill to change the data center tax break did not pass, 2026 · May 2026
HF 4173 would have changed the sales tax break for large data centers. It was sent to the House Taxes committee on March 12, 2026 and did not move. The 2025 rules stay in place. Source

💡 Who pays for the power

State law: data centers must pay their own power costs · June 14, 2025
Under the 2025 law, the PUC must set up a 'very large customer' rate group for each private (investor-owned) utility by December 15, 2026. When it reviews a data center rate or contract, it must aim for: all costs caused by very large customers are charged to them; the power still meets Minnesota's clean energy standards; and other customers are protected from paying for power plants or lines left unused if a data center leaves. The rule does not cover contracts that existed before, or customers served before 2020. Source

Xcel Energy data center rate approved, May 2026 (docket 25-289) · May 15, 2026
On May 15, 2026 the PUC approved Xcel Energy's rate for very large customers like data centers. It covers new loads of 100 MW or more, and some loads of 20 to 100 MW that put heavy strain on the grid. Contracts must last at least 15 years, and a customer that leaves early pays 80% of its demand charges. Xcel must keep these customers in their own rate group in future rate cases, and must file a separate clean energy option by December 1, 2026. Source

Data center rates for other utilities still pending · Oct 7, 2026
Other utilities have their own cases at the PUC: Minnesota Power (docket 26-126; told to file an updated plan by July 15, 2026), Otter Tail Power (docket 26-211) and Dakota Electric Association (docket 26-243, for members of 50 MW or more). These were still under review when we checked. Source

Xcel rate increase for 2025-2026 · July 2026
In July 2026 the PUC allowed Xcel a 2.3% increase for 2025 and 3.4% more for 2026, much less than Xcel asked for. MPR estimated about $2.78 more per month for a typical home. Customers who paid the higher temporary (interim) rate of 5.2% get money back with interest. The Attorney General and the Citizens Utility Board asked the PUC to reconsider. MPR reported that data centers have little direct effect on Minnesota bills so far. Otter Tail Power is asking for a 17.7% increase. Source

💵 Tax breaks

Sales tax break for data center equipment · July 1, 2025
Data centers certified by the Department of Employment and Economic Development (DEED) pay no sales tax on computers, software, cooling and power equipment. The 2025 law added 'large-scale' data centers (at least $250 million spent within 5 years after June 30, 2025) and let all data centers use the break for 35 years (was 20). A data center must be certified before July 1, 2042. Large-scale data centers must pay prevailing wage to construction workers and get a green-building certification within 3 years, or pay the tax back. Since July 1, 2025, electricity used by data centers is taxed again. Source

Yearly fee on large data centers · June 15, 2025
Large-scale data centers pay a yearly state fee based on their peak power use: $2 million for 100-250 MW, $3 million for 250-500 MW, $4 million for 500-750 MW, and $5 million for 750 MW or more. The money goes to the Department of Commerce for energy-saving and weatherization help for low-income homes. The fee amounts each data center pays are kept private (nonpublic) by law. Source

🤐 Secret deals and public records

Public records: anyone can ask, no reason needed · Oct 7, 2026
Minnesota's Government Data Practices Act says government data is public unless a law says otherwise. Anyone can ask a city, county, township or state agency to see public data. The office may not make you give your name or say why you want it. Looking at records is free; copies can cost the actual cost of making them. Ask the office's 'responsible authority' or data practices contact. The Department of Administration's Data Practices Office gives free advice if you have trouble. Source

No state ban on secret deals (NDAs) · Oct 7, 2026
Minnesota has no law stopping cities or counties from signing secret deals (NDAs) with data center companies. A bill to ban them failed in 2026. News reports say Farmington, Hermantown and Pine Island signed NDAs. You can still ask for the NDA itself, and other records, under the Data Practices Act. Source

Data center fee amounts are private · June 15, 2025
The 2025 law says the information the state collects for the yearly data center fee is nonpublic. That means the public cannot see how much power each data center told the state it expects to use for the fee. Source

Some data center details stay private in environmental review · Oct 7, 2026
During environmental review, the reviewing government can see private (not public) business data from the developer, but that data is left out of the final public documents. Source

💧 Water

Who decides the water a data center uses (DNR) · Oct 7, 2026
Anyone taking more than 10,000 gallons a day or 1 million gallons a year from a well, lake or river needs a water-use permit from the Department of Natural Resources (DNR). Many data centers buy water from a city water system instead, so the city also decides. Local governments get 30 days to comment on a permit application. Source

Extra water rules for very thirsty data centers (2025 law) · June 15, 2025
For a data center that would use more than 100 million gallons of water a year, the DNR can ask for early information (how much water, from where) before the company applies. When it issues the permit, the DNR must make sure public health is protected, water-saving steps (like closed-loop cooling or reused water) are considered, and conflicts with other water users are handled. The DNR can require a pumping test of the aquifer. A city that would supply over 100 million gallons a year to a data center is covered too. Source

🌫️ Air and generators

Air permits and backup generators (MPCA and PUC) · 2025
Backup diesel generators at a data center can need an air permit from the Minnesota Pollution Control Agency (MPCA). Very large on-site power, even if only for backup, can also need PUC approval. In 2025 the PUC voted 4-0 that Amazon must get a 'certificate of need' for 250 diesel backup generators (up to about 600 MW) at its planned Becker data center, which means proving they are needed and that cheaper, cleaner options do not exist. Source

🙋 How to have your say

Who decides a data center near you · Oct 7, 2026
Cities zone their own land (city council, usually after the planning commission). Counties zone land outside cities. Townships can also zone, but their rules cannot be weaker than the county's; many townships leave zoning to the county. Water is decided by the DNR (and the city water utility), air permits by the MPCA, and power deals by the utility and the PUC. Source

Zoning hearings and the 60-day rule · Oct 7, 2026
A city or town cannot change zoning without a public hearing. Notice must be in the official newspaper at least 10 days before. For a map change of 5 acres or less, owners within 350 feet also get a letter. Under the '60-day rule', a city, town or county must approve or deny a zoning request within 60 days (it can extend this), or it is approved automatically. A denial must give written reasons. Source

Local pauses (moratoria) · Oct 7, 2026
Cities and towns can pass an 'interim ordinance' that pauses a type of development while they study it, for up to one year. They can extend it only after a public hearing and written findings, and only in certain cases (in most cases for no more than 18 more months in total). A pause cannot stop an application that was already filed from getting its 60-day decision. Source

Environmental review (EAW, EIS, AUAR) · Oct 7, 2026
Big projects may need an Environmental Assessment Worksheet (EAW) or a full Environmental Impact Statement (EIS). Some cities use an area-wide study (AUAR) instead. The state board (EQB) says an AUAR cannot be used if a data center crosses certain size limits, and is not valid if it left out something big like water use. No permits or construction are allowed until the review is done. Notices and comment periods are posted every Tuesday in the EQB Monitor. Source

Ask for an environmental review (petition) · Oct 7, 2026
If a project has no review, any person can ask for an EAW by filing a petition with the EQB signed by at least 100 people who live or own property in Minnesota. It must describe the project and its possible harms, and include the evidence. The petitioners must also tell the developer in writing. Source

Appeal deadline: 30 days · June 8, 2026
If you disagree with a decision that an EIS is not needed (or that one is good enough), you can ask the Minnesota Court of Appeals to review it. You must file within 30 days after the decision is published in the EQB Monitor. In June 2026 the Court of Appeals ruled that Faribault's review of the Archer data center was not good enough and sent it back. Other lawsuits challenge AUARs in Pine Island, Hermantown and Monticello. Source

Comment at the Public Utilities Commission · Oct 7, 2026
Data center rates and power contracts are decided at the PUC. Look up the docket (for example 25-289 for Xcel) in eDockets and send a comment during the public comment period. Source

🧾 Help with your bills

Energy Assistance Program (EAP) · Oct 1, 2025
Minnesota's Energy Assistance Program, run by the Department of Commerce with federal money, helps pay heating and electric bills. It is based on 50% of the state median income. For October 2025 to September 2026, a household of 1 qualified with income up to $37,439 a year and a household of 4 up to $71,999. Apply through your local energy assistance service provider (see the Commerce Energy Assistance page). Source

📞 Who to contact

Minnesota Public Utilities Commission (PUC) · Oct 7, 2026
Sets rates for private utilities, decides data center rates and power contracts, and permits power plants and big power lines. It does not zone data center buildings. Source

Department of Commerce · Oct 7, 2026
Runs the Energy Assistance Program, collects the data center fee and checks green-building certifications. Source

Department of Natural Resources (DNR) · Oct 7, 2026
Issues water-use permits, including the new rules for data centers using over 100 million gallons a year. Source

Minnesota Pollution Control Agency (MPCA) · Oct 7, 2026
Issues air permits (for example for backup generators) and wastewater permits. Source

Environmental Quality Board (EQB) · Oct 7, 2026
Runs the environmental review program, publishes the weekly EQB Monitor and takes EAW petitions. Source

Department of Employment and Economic Development (DEED) / Minnesota Business First Stop · Oct 7, 2026
Certifies data centers for the sales tax break and helps data center companies with state permits. Source

Data Practices Office (Department of Administration) · Oct 7, 2026
Free help and advice for the public on getting government data. Source

Minnesota Legislature · Oct 7, 2026
Find bills and your legislators. Source