Assembly weighs proposal for small ‘edge’ data center that would use a 2 MW transformer

PETERSBURG, Alaska — The Petersburg Borough Assembly spent the bulk of its April 20 meeting examining a private proposal to place a small-scale data center in town, focusing on power capacity, public-safety safeguards and long-term effects on local electric rates.

Utility Director Heggerman told the assembly the project is a private deal between a landowner and Greenspark that would use an existing 2-megawatt transformer on shore. “This is a small-scale data center — it will fit in this room,” Heggerman said, describing a plan starting at about one megawatt with potential buildout to two megawatts.

The proposal drew both supporters and skeptics from the public. Samoka, founder and CEO of Greenspark, said the company looks for places with unused electricity and works with utilities. “We focus on finding communities where there is stranded energy,” Samoka said, and proposed a model intended to be a “win for the community, a win for the utility.” Andrew Misella, a developer who owns the Ocean Beauty cannery site and the transformer, said the two-megawatt operation would occupy a small portion of his property and could generate revenue to support waterfront redevelopment.

Why it matters: Heggerman said SEIPA spilled about 48,000 megawatt-hours from Tai Lake last year, and that a continuous 24/7 load could yield substantial revenue to the utility. He described a gross-revenue example of roughly $2.1 million a year on a full 2 MW customer and argued that such a customer would exert downward pressure on residential rate increases over time.

Officials and residents pressed on risks and constraints. Several residents asked how the borough would protect ratepayers in low-flow years or during outages; Tom Kowalsski and others noted past droughts and asked what happens when Tai Lake levels fall. Heggerman and other utility staff said the SEIPA operational plan includes curtailment bands so sales to outside customers stop when lake levels drop below a protective threshold; they also said the borough and Wrangle should coordinate on larger projects because both communities draw from the same resource.

Public-safety questions centered on backup systems. Aaron Henkins of the fire department warned that many modern lithium-ion battery backups pose a distinct fire risk and urged that the borough consider placement and suppression technology before approvals. “Lithium batteries in general are an actual fire hazard,” Henkins said. Staff acknowledged the concern but said specific battery technology and suppression plans have not yet been submitted.

Several assembly members asked whether the borough could adopt ordinances addressing data centers. Members were told that local regulation is possible but that, in practice, the island’s limited generation and transformer availability make massive hyperscale facilities infeasible without major new infrastructure.

What’s next: No permit or lease for the data center was voted on at the meeting; Heggerman and utility staff said Greenspark and the site owner are still negotiating technical details and that any building- or fire-suppression permits would be reviewed under normal land-use and safety requirements. Assembly members asked staff to continue public outreach and noted the borough could draft ordinances or land-use rules if the council chose to do so.

The discussion included sustained public comment, technical briefings from utility staff and a detailed presentation by the developer and Greenspark. The assembly did not take final action on the data-center proposal at the April 20 meeting.