Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Utility Data Center Service Models topic
No spam. Unsubscribe anytime.
MDU says Ellendale data center served from market purchases; utility returns transaction revenue to customers
Summary
Montana-Dakota Utilities told legislators it serves Applied Digital's Ellendale data center through market purchases, designed contracts so data center assets and transmission upgrades are paid by the customer, and estimates tens of millions of dollars in annual customer benefits from the load.
Montana-Dakota Utilities (MDU) told the interim Energy Development and Transmission Committee in Ellendale that it is serving the Applied Digital data center largely through market purchases and an electric service agreement that assigns build‑out cost and credit risk to the customer.
"Our strategy for serving large data center loads is that we are looking for the current load we're servicing to purchase that energy from the MISO market," said Darcy Nigam, Vice President of Energy Supply for MDU. He told legislators the utility did not develop incremental generation specifically for the Ellendale facility because the area already has "an excess amount of generation from the wind development" and that consuming that power locally reduces broader market congestion.
Nigam described a special tariff ("Rate 45" in North and South Dakota) for new high‑service‑factor data center loads larger than 10 megawatts that requires an electric service agreement approved by the Public Service Commission. He said qualifying customers must have a service factor above 85 percent and are eligible to participate in demand‑response programs; he also said such customers typically are the first to be interrupted in system emergencies, and the contracts include credit/security provisions so legacy customers are not left holding stranded assets.
MDU presented numbers it said show benefits to North Dakota customers from the Ellendale load: "We end up with almost $32,000,000 in benefits to customers either through additional transmission service revenues we're collecting from the data center or that sharing mechanism on the transaction charge," Nigam said for the initial portion of the load. "We estimate that when Ellendale is at its full output, that we will end up seeing that customer benefit will increase to $34,000,000 a year."
Nigam also described MDU's approach to risk: new assets required to serve large customers are paid by the data center, transmission service revenues are shared with legacy customers via a transaction charge mechanism, and market studies were run to show no negative wholesale‑price impacts to other customers. He said MDU may build generation in the future only when market purchases are insufficient and would similarly assign costs to the load that required the new generation.
On questions from legislators, MDU said it must demonstrate capacity to regional operators (MISO) and that the company can show compliance via a mix of physical resources, demand response and contractual arrangements rather than a single required local base load build-out. Nigam said larger future projects (gigawatt scale) may require on‑site or local dispatchable generation to ensure reliability.
MDU requested that the committee consider the balance between enabling large industrial loads and protecting legacy customers from stranded investment and higher rates.
