North Dakota Public Service Commission Clarifies Data Center Regulatory Authority

The North Dakota Public Service Commission (PSC) has clarified its limited direct regulatory authority over data centers, despite their rapid growth and significant electricity demand in the state. Sheri Haugen-Hoffart explained that the PSC's jurisdiction primarily extends to the utilities and power infrastructure serving data centers, rather than the facilities themselves. The PSC is responsible for reviewing and approving large energy infrastructure projects, substations, and transmission lines, and regulates investor-owned utilities such as Montana-Dakota Utilities, Otter Tail Power, and Xcel Energy. This oversight includes evaluating impacts on grid reliability and cost, ensuring that specific data center infrastructure costs are borne by the customer. However, the PSC does not regulate aspects like noise, water usage, property taxes, or the construction and operation of data centers. North Dakota's existing regulatory framework was established long before the advent of major data center development. A proposed measure, House Bill No. 1579, which would have granted the PSC direct authority over data center siting during the 2025 Legislative Session, was ultimately withdrawn. Currently, the state's legislative management is conducting a study on the impacts of large energy consumers, including data centers, on the electrical grid, regulatory structure, and economic development during the 2025-26 interim.