Data center proposal to test county energy requirements
Martin Kidston
(Missoula Current) With a data center proposed for a Bonner warehouse, Missoula County is taking a deeper look at its zoning and regulatory requirements to ensure that any application is fairly considered.
It's also looking to avoid an appeal regarding the outcome of any review process, which will include the applicant's request for a special exception regarding the project's proximity to a residential area, and county zoning laws that will require the project to secure 100% new renewable energy.
The project is proposed by Krambu, a company based in Idaho.
“They haven't communicated with us about this (energy) part of it,” said one county planner. “But they've certainly been participating for some special exception.”
Krambu announced its intent to place a data center at the former Bonner mill site earlier this year The first phase of the project would likely need around 1 megawatt of power, the company's owner has said.
Under county zoning rules adopted roughly seven years ago, crypto mining and data centers are required to develop or purchase “sufficient renewable energy to offset 100% of the electricity consumed by the operation.”
Svein Newman, the county's climate action program manager, said in order to meet the condition, Krambu must establish that their actions will introduce new renewable energy onto the electrical grid beyond what would have been developed otherwise.
“An applicant has the right to propose whatever compliance path they want to. It's up the county to assess whether or not that proposal complies,” said Newman. “At this time, the proposed data center hasn't told us how they propose to comply. They've told us they're aware of the requirement and they're trying to figure out how to comply.”
Pathways to Compliance
Newman said there are several paths the company could take to comply with the energy requirements, including building its own renewable power source or signing a power purchase agreement with a new renewable energy operator.
That could include a wind or solar farm looking for subscribers to help finance their project and finish construction.
“The language does provide some flexibility on how an applicant can meet the requirements,” Newman said. “But there's also some pretty clear standards a proposal would have to meet, like 100% new renewable energy. They could not go out and sign an agreement to get power from an existing hydro facility or an existing windfarm and call it good. But the Devils are in the details.”
Other potential paths could prove murky, Newman said, such as renewable energy certificates or a virtual power purchase agreement. Newman described the latter as a common tool often used to overcome regulatory or market barriers to clean energy procurement.
Unlike an agreement for the physical delivery of power, a virtual power agreement represents a financial contract to pay a renewable energy developer a fixed rate for power produced from a new renewable energy project, regardless of its location. The developer resells that power into the market and they either credit or charge the subscribing company the difference.
“It's a little convoluted but it is a flexible tool,” Newman said. “There are instances where having that guaranteed revenue stream and business up front can certainty make the difference in whether a new (energy) resource gets built.”
Energy Concerns
The issue over energy stems from the amount of electricity data centers consume. According to the Northwest Power and Conservation Council, 1 megawatt would power roughly 800 homes.
Nationally, data centers are expected to account for 12% of the nation's entire electricity use by 2028, according to Congress. With its own climate policies on the line, the county is looking to ensure Krambu's proposal doesn't disproportionately impact the region's electricity supply and usage.
“We do not have an application for a formal proposal submitted from them,” said Newman. “We don't have a proposal from the company yet as to how they would comply.”
The proposed data center would also sit within 500 feet of a residential neighborhood. To overcome that issue, Krambu has requested a special exception from the county.
The county's Consolidated Land Use Board is expected to take up that issue in the coming weeks. County officials said Krambu's proposal will test the strength and clarity of the county's zoning and regulatory requirements.
“This is the furthest we've had a project proposal get in the process,” said county planner Jennie Dixon. “We've met with other people interested, including one near the old Smurfit site. We've talked with renewable energy brokers for how they can meet that new renewable requirement. But they never went anywhere. This is the one (Krambu) that's gone the farthest.”