Data centers continue to generate headlines and strong opinions across our region. They were also a frequent topic during our September member appreciation events. I enjoyed talking with many of you about the opportunities and concerns surrounding these projects, and I appreciated the thoughtful questions you brought to those conversations. Since I wrote about data centers in February, the discussion has not slowed down. Our team receives inquiries about potential projects nearly every week. That does not mean a data center is coming to Platte-Clay’s system. Most inquiries never become actual projects. These developments are complicated, and many questions must be answered before one can move forward.
By Dave Deihl,CEO and General Manager
Data centers continue to generate headlines and strong opinions across our region. They were also a frequent topic during our September member appreciation events. I enjoyed talking with many of you about the opportunities and concerns surrounding these projects, and I appreciated the thoughtful questions you brought to those conversations.
Since I wrote about data centers in February, the discussion has not slowed down. Our team receives inquiries about potential projects nearly every week.
That does not mean a data center is coming to Platte-Clay’s system. Most inquiries never become actual projects. These developments are complicated, and many questions must be answered before one can move forward.
Cities and counties determine whether a proposed development is appropriate for a particular location. Planning and zoning officials consider land use, roads, water, noise and other effects on the community. Those are important discussions, but they are not decisions made by your electric cooperative.
Our responsibility is to determine whether we can safely and reliably serve the electricity a project requires. We are grateful that local officials handle land use decisions so we can remain focused on our role as your electric utility.
Platte-Clay is receiving inquiries primarily about small and medium data centers requiring less than 50 megawatts (MW) of capacity. Loads larger than 50 MW are evaluated through the Large Load Program established by our generation partner, Associated Electric Cooperative.
For perspective, some agricultural, manufacturing and energy businesses use between 5 and 20 MW. Many are intermittent loads, meaning their electricity use starts and stops at irregular intervals. PCEC already serves several intermittent loads that reach around 20 MW.
Data centers are different because they generally operate around the clock. Smaller facilities may require between 1 and 50 MW, while the hyperscale and artificial intelligence data centers receiving national attention can require 100 MW to 1 gigawatt. At the highest end, that is comparable to the electricity needs of a city.
The size of these projects calls for careful planning, and each proposal deserves to be evaluated on its own merits. A data center is a business seeking electric service, just like a farm, manufacturer, school or local store, although potentially on a much larger scale.
One of our cooperative principles is Open and Voluntary Membership. That principle reminds us that it is not our role to judge a prospective member based on the type of business it operates. If a project receives the required local approvals, our job is to determine whether adequate capacity exists and whether the load can be served without shifting costs or risks to our current members.
Large electric loads can bring real benefits to a cooperative. Many costs associated with operating our system are fixed. Poles, substations, equipment and other infrastructure must be maintained regardless of how much electricity moves across the system. Additional energy sales can spread those costs across more usage and help reduce upward pressure on rates.
That opportunity can be especially meaningful for rural electric cooperatives. Unlike urban utilities, rural cooperatives often serve fewer members across many miles of line. With less customer density, the cost of maintaining the electric system is spread among fewer accounts. A responsibly served large load can add significant energy sales without requiring the cooperative to add thousands of miles of new line, helping rural cooperatives manage costs for all members.
We have already seen that benefit from the large loads on our system. If PCEC responsibly added a load twice the size of those we serve today, the additional revenue could help offset future rate increases.
That distinction matters because PCEC is a not-for-profit, member-owned cooperative. Investor owned utilities may pursue large loads to generate returns for shareholders. We do not have shareholders. When our cooperative benefits financially, that value remains with our members through stable rates, system investments and capital credits.
Our goal is straightforward: provide the most reliable electric service possible at the lowest reasonable cost. If a new large load helps us accomplish that goal without placing additional costs or risks on existing members, I believe it deserves careful and objective consideration.
The same standard applies to projects above 50 MW. Associated Electric’s first obligation is to meet the needs of existing cooperative members. Any prospective large load must undergo extensive capacity and transmission studies, make significant financial commitments and pay the costs of the infrastructure required to serve it. Only after member needs are protected would Associated move forward, and only if the project clearly benefits cooperative members.
Missouri’s three tier cooperative system gives us an important advantage. Together, electric cooperatives own the generation, transmission and distribution infrastructure used to serve our members. We are not controlled by outside shareholders or organizations whose priorities may differ from yours. We can evaluate opportunities based on what provides long term value to cooperative members.
Data centers may be a newer type of development, but responsibly serving large electric loads is not new to us. We understand how to plan for growth, protect reliability and structure service so current members are not asked to subsidize a new project.
We will continue to approach every opportunity carefully and transparently. If a project cannot be served responsibly, we will say so. If it can strengthen the cooperative and provide meaningful value to our members, we should be prepared to consider it.
Whatever opportunities come our way, your interests will remain at the center of every decision we make.
