Two ‘large electrical load’ data centers considered for Sacramento region, SMUD says

The Abridged version:

• A second data center project is now in the works within the Sacramento Municipal Utility District’s territory, according to the utility district.
• The utility currently is handling inquiries for five different data center projects, but declined to state where the projects are under consideration, citing customer privacy needs.
• Both projects are estimated to be over 50 megawatts in size, which would require more electrical demand than any other single project in SMUD’s territory, according to the utility.

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A second “large electrical load” data center proposal is in the works within the Sacramento Municipal Utility District’s service area, the utility confirmed.

In September, Abridged by PBS KVIE published findings that SMUD has been in talks since February about a “large load” data center planned in southeast Sacramento. Email communications acquired by Abridged indicated that Link Logistics, a subsidiary of Blackstone Inc., is shaping up plans for a data center of at least 50 megawatts.

Now SMUD has a second large load project progressing and under consideration.

“We now have 2 large electrical load inquiries in the early feasibility stage, each exceeding 50 megawatts in capacity,” states a fact sheet published by SMUD in late September.

With a size greater than 50 megawatts, either project would amount to the largest data center in the Sacramento region to date, according to the utility.

Largest data center in the Sacramento area

Dozens of data centers are already based in the Sacramento area, with some dating back to 2000.

Most of those data centers have smaller energy requirements, sized between 2.8 megawatts and 8 megawatts. Currently, one of the region’s largest data centers is a 52.7 megawatt campus, across three data center buildings operated by NTT Data Centers in Natomas.

SMUD is currently working with a total of five different potential projects that include data center components, spokesperson Gamaliel Ortiz said. In terms of planning phases, the proposals range from “basic inquiries” to early feasibility studies.

The two projects over 50 megawatts are currently at the transmission study stage, which is an “early feasibility step” in understanding the potential power and grid needs, Ortiz said.

Eventual approval of any projects would first have to go before a local city or county government.

“Once a project is approved, we’re obligated to provide electric service,” states the recent fact sheet from SMUD.

SMUD declined to detail the exact size and location of the data center projects. The utility cited portions of the California Public Utilities Code that require utilities to keep customer information confidential, unless that information is under a court order or subpoena.

Local opposition begins to brew

Over three dozen people filled SMUD headquarters on Wednesday night, many of them eager to speak out about the prospect of more data centers in the Sacramento region.

Residents arrived at the meeting after a flyer circulated online purporting that data centers would be discussed. The meeting saw the SMUD board’s Energy Resources and Customer Services Committee weigh in on updates to its electrical procurement policies, or its Integrated Resource Plan.

“Large load data centers present many unknowns, yet they’re pushed on us with little to no input,” said KC Schuft, a resident who lives in southeast Sacramento.

Others voiced concerns over the greenhouse gas emissions associated with data centers, or the noises and air quality issues that could be felt in neighborhoods.

A more full discussion on data centers is planned for the SMUD board’s Nov. 11 meeting.

Build large load centers to avoid rate increases?

SMUD no longer expects to meet it’s 2030 zero carbon goal, the utility confirmed in a statement.

The plan was adopted in 2021 alongside promises to fight climate change and remove all carbon emissions from the utility’s power supply by 2030.

Currently the utility expects to meet about 80% of that goal by 2030, with SMUD staff citing increasing costs of solar and wind energy sources, as well as changes in federal funding and grants.

With a new Integrated Resource Plan in the works, the board is currently weighing whether to meet it’s zero carbon goals, or raise costs for electricity rates.

Board Director Nancy Bui-Thompson described it as a difficult decision, especially as most of the operational efficiencies have already been found in SMUD’s system. Large load projects, like a data center or manufacturing plant, could provide extra funding, she said.

“We don’t have a lot of levers,” Bui-Thompson said. “It’s grants, loans, large load and rates, basically.”

Would data center companies ‘pay for the cost’?

SMUD officials plan to keep utility rates “low” and “ensure the costs tied to these projects and related grid upgrades are assigned fairly to those customers and do not shift to existing customers,” according to a SMUD statement.

“We are committed to making sure new large electrical load customers pay for the cost of the infrastructure needed to serve them so those costs are not shifted to existing customers,” Ortiz said.

The utility is also pursuing grant funding to offset the cost of infrastructure upgrades that would come with any large project.

Abridged previously reported that the utility quickly assembled a $122 million grant for federal funding to help cover the cost of infrastructure upgrades near the proposed southeast Sacramento data center site.

SMUD was not selected for the federal grant funds, but the utility said it will continue to apply for grant funding to offset the cost of infrastructure needs that would come with a large project.