# Google Data Center Power Deal Faces Billion-Dollar Cost Dispute

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/regulation/34838
Published: 2026-10-19T14:44:04.000Z
Updated: 2026-10-19T14:44:04.000Z
Section: Regulation

> Xcel Energy projects $1.1 billion in net benefits to other customers, while Minnesota’s attorney general’s analysis suggests roughly $1 billion in net costs.

Google’s proposed 15-year power contract for a data center in Pine Island, Minnesota, is before state regulators as Xcel Energy and the attorney general’s office dispute its potential impact on other electricity customers.

Xcel projects $1.1 billion in net benefits to its other customers over the contract term. The Minnesota attorney general’s office says its analysis suggests the agreement could instead leave those customers with roughly $1 billion in net costs. Both figures are projections, not costs or savings already incurred.

The proposed arrangement includes 1,400 megawatts of wind capacity, 200 MW of solar capacity and 300 MW of iron-air battery storage from Form Energy. Google has also pledged $50 million to Xcel’s Capacity*Connect program, which places smaller batteries across the utility’s system.

The contract sets a minimum monthly bill for Google. That bill includes the greater of actual on-peak demand charges or charges on 75% of contracted capacity, plus customer and applicable tariff charges and the Clean Energy Accelerator Charge, net of any applicable credits. The provision is intended to keep a base level of payments in place even when the data center uses less power than its contracted capacity.

If Google ends the agreement early, an exit fee would cover 75% of on-peak demand charges for the shorter of the remaining contract term or 96 months. Google would also owe the remaining Clean Energy Accelerator Charges. Those terms are central to the dispute over whether other customers could face costs if the project’s demand falls or the agreement ends early.

The attorney general’s office argues that the proposed protections have not established that households and small businesses would be shielded from costs during the agreement or after it expires. It has also challenged redactions of financial details in the public filing.

Xcel’s transmission study found that serving the data center would require no upgrades to its existing network. Construction would still be needed where the project connects to that network, and the proposed agreement requires Google to pay those costs in advance.

Minnesota law directs regulators to consider assigning costs attributable to very large electricity customers to a separate customer class or subclass and protecting other customers from stranded costs. The Minnesota Public Utilities Commission is reviewing the proposed agreement.