Google and Xcel Energy’s Minnesota Data Center Deal Draws Fire From State’s Attorney General

Google and Xcel Energy have asked Minnesota regulators to approve an electric service agreement for a data center in Pine Island that would be backed by 1,900 MW of new wind, solar and battery storage. Minnesota’s attorney general says the filing hides how much other customers could still end up paying.

Google and Xcel Energy are asking Minnesota regulators to approve an electric service agreement for a data center the search giant wants to build in Pine Island, a city of fewer than 4,000 people about an hour south of the Twin Cities. Reported at roughly 780 megawatts of demand, the facility would support Google services including Workspace, YouTube and Maps. To supply it, Xcel and Google propose building 1,900 MW of new wind, solar and long-duration battery storage — a package the companies call the Clean Energy Accelerator. The deal is still pending before the Minnesota Public Utilities Commission, and the state’s attorney general has told regulators the companies have not shown that other ratepayers are fully protected.

1,900 MW to back a 780 MW data center

The renewable package breaks down into 1,400 MW of new wind, 200 MW of solar and 300 MW of long-duration storage — more capacity than the data center itself needs because wind and solar do not generate around the clock. The storage piece is a 300 MW, 30-gigawatt-hour iron-air battery system supplied by Form Energy, discharging over roughly 100 hours rather than the few hours typical of lithium-ion systems; Form describes it as the largest battery project by energy capacity announced anywhere to date, though that is a company claim rather than an independently verified ranking. Xcel says its overall generation mix is already about 70% carbon-free.

Who pays, and for how long

Under the proposed terms, Google would pay for the data center’s own grid connection and any new transmission or distribution infrastructure it requires, and would guarantee a minimum bill equal to at least 75% of its contracted capacity even in months it uses less power. If Google ends the 15-year agreement early, it would owe an exit fee equal to 75% of its on-peak demand charges for either the remaining contract term or 96 months — eight years — whichever is shorter. Google has also pledged a separate $50 million investment in Xcel’s Capacity*Connect program, which the utility is using to build out battery storage capacity across Minnesota beyond this one project.

The attorney general’s objection

Minnesota Attorney General Keith Ellison’s office filed comments with the Public Utilities Commission arguing that the agreement, as written, does not establish that all costs tied to serving Google will fall on Google rather than on residential and business customers. The filing says the exposure for other ratepayers could run into the “millions” of dollars and potentially exceed $1 billion, particularly once Google’s contract term ends or if Google exits early, and it faults Xcel for redacting nearly all the dollar figures in its filing without specific justification. Xcel disputes that reading of the numbers: spokesperson Megan Boldt said the company’s own analysis shows roughly $1.1 billion in net benefits to other customers over the life of the agreement, and that large users like data centers are required to pay their own way without raising costs for everyone else. Google told the commission its agreement is “firmly in the public interest” and complies with Minnesota law.

Not yet a done deal

The Pine Island city council has already approved the project locally, but the broader agreement still needs sign-off from the PUC, which can approve, modify or reject it after weighing whether it protects other customers and serves the public interest. A separate lawsuit seeking a more thorough environmental review has put the project on hold in the meantime. The dispute is a preview of a fight playing out in utility territories across the country: as AI and cloud computing push data center demand to levels few grids were built for — PJM, ERCOT and SPP all set new summer peak-demand records in 2026 — utilities are signing increasingly large, bespoke contracts with hyperscalers. Google alone has struck a similarly structured, developer-funded deal with Black Hills Corporation for a Wyoming data center, while other hyperscalers have turned to independent power producers such as the Solaria-built, solar-powered data center park in Uruguay. State regulators and consumer advocates, meanwhile, are pushing back elsewhere too: FERC this year rejected the core of PJM’s own plan for connecting large data centers to its grid, pointing to the same underlying question Minnesota regulators are now weighing — how much of the buildout risk lands on ordinary ratepayers. Xcel, for its part, points to its own numbers to argue the trend has not hurt ordinary customers: it says residential bills have risen an average of 1.55% a year since 2013, below the rate of inflation.

Sources

• MPR News, “Pine Island data center raises electricity cost concerns from Attorney General Keith Ellison,” Oct. 3, 2026 (AG filing, redactions, Xcel’s response)
• Renewable Energy World, “Data centers done right? Xcel and Form Energy team up to power Google operation in Minnesota,” Oct. 19, 2026 (storage technology, project scope, PUC status)
• Investing.com/Reuters, “Xcel Energy to power new Google data center in Minnesota,” Oct. 19, 2026 (capacity breakdown, cost terms)

Illustrative image. Photo: NOIRLab/NSF/AURA/T. Slovinský, CC BY 4.0, via Wikimedia Commons — source