Xcel sells Becker land to Microsoft for data center, as it predicts major rise in energy demands

Xcel Energy sold land in Becker this week to Microsoft for a new data center, potentially a second major project of its kind in a community that now hosts the utility's largest coal plant.

A record of the sale published by the Department of Revenue shows a nearly 295-acre purchase for $17.69 million. State utility regulators last year approved the sale of 348 acres of land to Elk River Technologies, a mysterious company that could invest up to $1 billion in a new data center. Whether there is a larger company behind the Elk River Technologies facility is unknown.

"The data center will bring investment and jobs to the area, providing the economic development the community has been seeking," Xcel spokesman Kevin Coss said of the Microsoft transaction. "As the electric provider for the area, we will be engaged in the site development process."

Xcel is predicting a significant jump in demand for energy on its Upper Midwest system, a major change driven primarily by the development of more data centers and sale of more electric vehicles.

The PUC in October also approved an Xcel electricity contract with Meta Platforms' for a $700 million data center project in Rosemount. A second data center has been floated in Rosemount.

In 2022, Google backed out of a planned $600 million data center in Becker.

Microsoft did not immediately respond to a request for comment.

In a new long-term energy plan filed earlier this month, Xcel forecast an average of 2% annual growth in energy needs, which it called a "marked divergence" from a long period of ultra-slow growth. Gabe Chan, a University of Minnesota professor who specializes in energy and climate policy, said the spike in predicted energy sales is "massive" and fits with industry trends elsewhere in the country.

"Really we haven't seen this kind of load growth all hitting at the same time since probably the mass adoption of air conditioners," Chan said.

This is a developing story and will be updated.