Amazon pauses plan to build data center near Becker
Amazon has paused its plans to open a large data center near Xcel Energy Center's Sherco site in Becker, Minnesota.
The pause was confirmed by Xcel Energy, and comes in the wake of discussions in the Minnesota Legislature to end a sales tax exemption on electricity consumed by data centers in the state.
Xcel told Bring Me The News that Amazon had communicated it is "pausing those plans because of factors independent of our readiness to serve the site's electricity needs."
In a statement Amazon spokesperson Duncan Neasham said: "We are constantly evaluating new locations based on customer demand. We sincerely appreciate the support we've received from both the public and state and local officials as we continue to evaluate this location."
Amazon had bought a 350-acre site next to Sherco, with Xcel in the process of decommissioning its coal-fired plants and proceeding with long-term plans to build a huge solar farm on the property.
Major tech companies are investing huge sums into power- and water-hungry data centers as it seeks to cope with the expansion of cloud computing and the proliferation and advancement of artificial intelligence.
But their development has sparked backlash in parts of the country, such as in Farmington, Minnesota, where a proposed $5 billion data center park has been criticized by nearby residents who have concerns about power and water consumption and noise pollution.
"The rapid pace of change in the data center industry is well documented. We continue to talk with other potential customers about locating their operations in Minnesota," Xcel Energy said. "We remain optimistic about serving new electricity demand from data centers in a way that benefits our existing customers and communities."
The pause from Amazon comes as state lawmakers consider a series of regulations on data center construction, including the removal of some tax incentives for tech giants.
MPR News reports one of the measures proposed by Gov. Tim Walz and the DFL would be to end the sales tax exemption on the electricity used by large-scale data centers, and described Amazon's pause in apparent reaction to that as "pretty bad lobbying."
In an interview, Walz said that Minnesota has highly generous incentives for data centers, before adding: "But we have to balance our budget. And I think a lot of Minnesotans are saying, 'Well, you couldn't do a tax cut to my sales tax, but you could do a tax cut to (Amazon founder) Jeff Bezos?'"
But news of Amazon's decision on Becker sparked criticism from Republican Sen. Andrew Mathews, who said Walz's proposal to end the sales tax exemption was "the final straw."
"I'm incredibly frustrated that a major economic lifeline for the Becker community has effectively stalled," he said.
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