Minnesota Town Halts New Data Center Projects

- The moratorium specifically halts new data centers that would use over 20 megawatts of power or be located within 500 feet of residential areas. Eagan currently has several smaller data centers, but this pause addresses the trend of "hyperscale" projects seen elsewhere in Minnesota. - A single large data center can use up to 5 million gallons of water per day, comparable to a town of up to 50,000 people. A proposed facility in Farmington, another Minneapolis suburb, was projected to more than double the city's entire water usage. - The rise of AI is a major driver of this new demand; AI-focused servers can consume 3,000-5,000+ watts each, compared to 300-500 watts for traditional servers. This has led to projections that data centers could account for up to 12% of total U.S. electricity use by 2028. - Utility provider Xcel Energy anticipates 1,300 megawatts of new data center-related demand in its Minnesota and Dakotas territory in the next seven years. This surge is equivalent to the power consumed by all 2.3 million households in Minnesota. - This local decision comes as the state of Minnesota is actively encouraging data center development through significant tax incentives. Qualifying facilities can receive a sales tax exemption for up to 35 years on IT equipment, software, and, until a recent change, electricity. - The debate in Eagan mirrors contentious public meetings and resident-led opposition in other Minnesota cities like Farmington and Hermantown, where concerns over resource strain, noise, and lack of transparency have been raised. - Before the moratorium, Eagan's zoning rules treated data centers similarly to warehouses. The one-year pause is intended to give the city time to create specific land-use regulations that address the unique operational impacts of these facilities.