By Chris Post / Editor-In-Chief

Marshall officials are beginning to consider how the city should handle a potential data center before a developer formally comes asking for permission to build one.

With Mayor Craig Thompson absent and Mayor Pro Tem Harold Simmons presiding over the Marshall City Council meeting, Marshall Municipal Utilities General Manager Jeff Bergstrom updated council members on the growing interest in large-scale data centers and the steps the utility has already taken to prepare.

The discussion comes after The Missouri Valley Delta previously reported that MMU is in early talks with an artificial intelligence developer about a possible data center in Marshall.

Bergstrom previously told the Board of Public Works that he had met with the developer to discuss the project and the utility infrastructure that would be necessary to support it.

That could include an estimated $2.5 million addition to a substation. Bergstrom also discussed requiring the developer to provide a deposit tied to its utility use. The identity of the developer, a potential location and a construction timeline have not been disclosed.

The latest council discussion provided a clearer picture of how MMU would handle such a large customer and how far the proposal still has to go.

Bergstrom told council members Marshall is far from alone in attracting attention from data center developers.

MMU purchases its power as part of a power pool with 34 other members, and Bergstrom said all 35 members have been approached by data center developers.

“They’re knocking on everybody’s door,” Bergstrom previously told the Board of Public Works.

Because MMU operates under a full-requirements contract through the power pool, Bergstrom said planning for a large data center has to begin there.

A services and rates committee spent about six months developing guidelines for what the industry calls “computational load,” a category that includes data centers and other facilities requiring unusually large amounts of electricity.

The policy was completed in June.

Bergstrom said electricity for a data center would be treated separately from the power MMU purchases for its existing customers.

Rather than simply adding the new electrical demand to the same system used to serve homes and businesses, the power pool would purchase additional capacity and energy on the wholesale market specifically for the computational load.

A separate retail rate would then have to be developed for the customer.

That distinction could be important for existing MMU customers as officials consider whether a project that consumes enormous amounts of electricity could benefit Marshall without shifting financial risk to other ratepayers.

Bergstrom said the guidelines developed by the power pool place that risk on the developer.

“They pay for everything,” Bergstrom told the council.

He said the financial requirements have deliberately been set high and acknowledged they may be enough to cause some developers to walk away.

But interest remains.

Bergstrom said if one developer loses interest, others are already looking for opportunities.

That interest is still a long way from an approved project.

Bergstrom repeatedly stressed that MMU remains in what he called the “research phase.”

No agreement has been signed, and Bergstrom said there are currently no nondisclosure agreements related to the discussions.

“We’re gathering information and learning as much as we can,” he said.

If discussions reach the point where a project appears likely, Bergstrom said he would first take the proposal to the Board of Public Works.

The matter would then ultimately reach the City Council.

He also said public meetings would be appropriate if discussions begin gaining momentum so residents could ask questions and learn more about the proposal.

Ward 2 Councilman Jim Papreck said the city should begin preparing its own rules before a developer reaches that stage.

Papreck asked city staff to review existing ordinances and consider whether Marshall should adopt regulations addressing noise, setbacks, visual screening and public hearing requirements for large data centers.

He also suggested limiting potential data centers to areas zoned for heavy industrial use in an effort to keep them away from residential neighborhoods.

Papreck also urged the city to make a commitment against nondisclosure agreements.

“I would also like to suggest that we pledge to the community that there will be no NDAs,” Papreck said.

He said Marshall has an advantage in addressing the issue before a project reaches the approval stage and can look at the experiences of communities that have already dealt with data center development.

“We’re not the first community that’s faced this prospect,” Papreck said. “We can probably learn from what hasn’t worked elsewhere.”

Papreck stressed that he was not taking a position for or against bringing a data center to Marshall.

Instead, he argued the city should establish expectations before it finds itself reacting to a specific proposal.

“There’s still time,” Papreck said. “But I would like us to be proactive.”

Bergstrom has also stopped short of endorsing a project.

During the earlier Board of Public Works discussion, he said a data center “would definitely be a benefit for the community if done right,” but said the board could eventually have to make the more fundamental decision of whether it wants that type of development in Marshall.

For now, no such decision is being asked of either the board or the council.

But the latest discussion moved the conversation beyond whether developers are interested in Marshall.

Officials are now beginning to consider what conditions they would require if one of those developers decides it is interested enough to stay.