Minnesota AG Challenges Google Data Center Deal Over Billions in Potential Ratepayer Costs

Key points

• Ellison’s office filed comments on Sept. 28, 2026, stating Xcel has not proven the Google deal is reasonable or in the public interest.
• The AG argues that other ratepayers could face over $1 billion in extra costs, contradicting Xcel’s claim of $1.1 billion in savings.
• Xcel redacted most dollar amounts in the filing, which Ellison’s office criticized as a lack of transparency.
• The PUC must decide whether to approve, modify, or reject the electric service agreement after the comment period closes.
• Pine Island city council elections on Nov. 3 could shift control to anti-data center candidates, potentially halting Project Skyway.

Background

This dispute occurs amid national debates over data center costs, where a Federal Reserve study linked AI infrastructure growth to higher wholesale electricity prices. In Washington, the House passed a bill to mitigate data center impacts, while the Senate stalled on a similar measure. In Minnesota, data center opposition has become a key political issue, influencing both state and local elections. The project is currently on hold due to a lawsuit seeking environmental review, despite city council approval.

How outlets are covering it

Outlets highlight different aspects of the conflict. MPR News emphasizes the political timing, noting Ellison’s tight reelection race against Ron Schutz, with both candidates agreeing that the AG should intervene if laws are violated. KTTC focuses on the technical legal arguments, detailing the AG’s concerns about stranded costs and redacted financial data. ABC 6 News centers on community reactions, quoting residents who feel misled by opaque cost figures. The Post Bulletin provides a local political analysis, noting that six candidates are running for Pine Island council and mayor, with a potential shift in council control that could reverse the project’s approval. Xcel and Google maintain that the deal is compliant and beneficial, while the AG’s office insists the evidence is insufficient to protect ratepayers.

Why it matters

The outcome of the PUC review will set a precedent for how Minnesota regulates large energy users. If the AG’s concerns are validated, it could force stricter cost-shifting rules for future data centers. Locally, the result may determine whether Pine Island receives significant tax revenue and infrastructure investments or faces prolonged legal and political battles. Nationally, the case reflects growing public anxiety about who pays for the energy demands of AI infrastructure.

What to watch

Xcel Energy will respond to the AG’s comments before the PUC makes its final decision. The public comment period will close, after which the commission will weigh whether the agreement meets state requirements for cost allocation and public interest. In Pine Island, the Nov. 3 election will determine if the city council retains its pro-data center majority or shifts to an opposition bloc that may attempt to reverse prior approvals.