“We have seen a shift in the customers coming to Oklahoma,” said Tiffini Jackson, vice president of external affairs for PSO, one of the state’s two major shareholder-owned utilities.
“Historically, a large was one megawatt, five megawatts, maybe 10,” Jackson said. “Now we’re seeing large-scale projects like data centers and industrial facilities.”
Some of those facilities, Jackson said, need up to 1,000 megawatts — 1 gigawatt — of power.
“For perspective, we’re about a 4,400-megawatt-demand company. We could potentially double that in the next five years,” Jackson said.
Put another way, one data center or power-intensive industrial plant such as the proposed Inola aluminum smelter could increase peak demand 20-25%.
PSO said it plans to add 1.5 gigawatts of generation over the next three years, an expansion that will cost customers $10 a month.
Rep. Amanda Clinton, D-Tulsa, who requested Tuesday’s interim study, asked Jackson if ratepayers will continue to see increases.
“Is this something we should expect going forward, because that is prohibitive for people on fixed incomes, particularly,” Clinton asked.
“As we add new generation, new transmission, that does increase cost,” said Jackson. “But it’s not all due to expanding loads. … Every time a new customer comes on, there won’t be another jump.”
Clinton read Corporation Commission testimony that PSO’s largest customer ever used 130 megawatts but 11 current contracts called for at least 50 megawatts.
“What that actual cost (to consumers) ends up being depends on how those costs wind up being allocated,” replied Jackson. “We’re basing (projections) on current cost allocations, but that could change with a large energy use tariff or some other mechanism.”
One criticism of energy-intensive projects such as data centers and the aluminum smelter is that current ratemaking structures result in residential and smaller industrial customers subsidizing the cost of the additional generation and transmission.
One possibility is a separate rate class for large industrial customers. Another, recently OK’d in Oklahoma, would allow those users to build their own generation “behind the meter” — and therefore not connected to the grid.
Madison Miller, deputy executive director of the Department of Environmental Quality, said the agency has been “approached” about six such projects.
John Woods, Oklahoma Department of Commerce economic development research specialist, said the agency is aware of six data centers in various stages of development.
“There is certainly the possibility of other projects on the horizon that those companies have not engaged with the Department of Commerce or doing their own due-diligence,” Wood said. “Or, and we’re seeing more of in our state, these companies are engaging directly with economic development offices in municipalities.”
That’s because data centers are looking for access to land and utilities and accommodation on property taxes, all of which are mostly local issues.
Woods said the state has at least 36 commercial data centers already. His charts showed those centers employ few people, except during construction, but pay average wages approaching $100,000 a year.
Two staffers with Virginia’s Joint Legislative Audit and Review Commission summarized that state’s experience with data centers, including water consumption.
“While some data centers can use a lot of water, we found that on average they use about the same or less than an average large office building,” said Scarlett Saunders.
Saunders and Mark Gribbin said Virginia contains the world’s largest concentration of data center capacity — 13% — but the centers account for less than 0.5% of the state’s water consumption.
Responding to questions, Saunders and Gribbin said water usage depends on the type and size of the data center, its cooling system and the weather.
Yohanes Sugeng, chief of Oklahoma Water Resources Board Engineering and Planning, said the state as a whole should have sufficient water to meet all needs for at least the next 50 years, but that some areas are already short.
“It really depends on the basin,” said Sugeng.
“For me, the goal was to start a conversation, not to make a judgment on whether data centers are good or bad,” Clinton summarized. “I have a lot of questions that I think I have better answers to go back to my constituents with. I hope this starts a conversation about how we can expand our economy while protecting our resources and putting Oklahomans first.”
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