Leola Data Center electricity to be served by MDU; next faces county permitting
A proposed cryptocurrency mining data center in Leola, South Dakota, secured approval from the state Public Utilities Commission to receive electricity from Montana-Dakota Utilities (MDU). However, the project now faces significant hurdles at the county level, as McPherson County recently deferred action on its conditional use permit. The project, expected to use 50 Megawatts, also comes amid broader discussions in the state about data center moratoriums and electricity rate protections.
The proposed Leola Data Center, a cryptocurrency mining facility in north central South Dakota, recently secured a crucial step towards its development by obtaining approval from the state Public Utilities Commission (PUC) to be served electricity by Montana-Dakota Utilities (MDU).
This decision came after a settlement allowed MDU to provide power, despite FEM Electric typically servicing the area. PUC Chairman Chris Nelson clarified that the commission's approval pertains solely to the electric provider and does not constitute a permit for the data center's construction. The project is estimated to occupy nine acres and consume 50 Megawatts of energy, with its proponents highlighting significant financial contributions, including $159,000 annually in property taxes, an initial $2 million to EMS and first responders (plus $200,000 annually thereafter), and $1 million to public schools.
However, the project still faces significant local hurdles, as McPherson County recently deferred action on its conditional use permit. This deferral follows broader political discussions in South Dakota, where some candidates have advocated for a moratorium on data center projects. Although moratorium and tax incentive bills were proposed in the state Legislature, they ultimately failed to pass. The Legislature did, however, enact a law requiring data centers of 10 MW or higher to cover any electricity rate increases they cause for residential customers.