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Utility Deal Could Bring a New Data Center to Aztec, N.M.

Officials are discussing a special pricing agreement to make electricity more affordable for the data center. Under the terms, the facility would pay roughly the same rate as the city — less than 5 cents per kilowatt.

by Hannah Grover, The Daily Times / August 8, 2019 CGI

(TNS) — It won’t be as large as the data center built in Los Lunas for Facebook, but a data center could be built in Aztec in the future.

“It’s not that this thing’s coming,” said Aztec Electric Utility Director Ken George. “It’s just a possibility.”

The Aztec City Commission expressed optimism about the potential data center during a workshop on the evening of Aug. 6.

The city was initially approached by its electricity provider, Guzman Energy, about six months ago about a proposal for a data center.

The city did not disclose the name of the upstart Colombia-based company behind the data center. It is interested in the City of Aztec for a data center because of its location in the Four Corners region and access to inexpensive power.

The data center will require 1.5 megawatts of electricity.

“It would be the biggest load on our system,” George said.

George said the current largest customer is Safeway. The entire city uses less than 10 megawatts.

Aztec would create a special pricing agreement to make the electricity more affordable for the data center, which would pay what Aztec pays Guzman Energy for electricity — less than 5 cents per kilowatt.

George said Aztec can offer that price because Guzman Energy will sell the city the power for the data center at a reduced rate of less than 3 cents a kilowatt.

George estimates that the city could make about $150,000 a year on electricity sales to the center.

The city would also lease land to the company for the data center as well as possibly leasing office space to the company. It would likely be located on city land at the airport and would employ between two and five workers.

George explained that the airport is the best location for the data center because the equipment is loud — it can produce 110 decibels of noise.

"We've gone around and tested all of our equipment, like our wood chipper, and it's at 94, 95 (decibels)," George said. "So this is even above that. If we were to move forward, they definitely would have to put sound barriers around their equipment."

George said this will be the first time the city has created a special rate for a business, and he anticipates it will be a learning experience that will help Aztec in the future.

"I want a win for us and I want a win for them, but mostly I want a win for us," he said.

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©2019 The Daily Times (Farmington, N.M.). Distributed by Tribune Content Agency, LLC.

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