The Abridged version:
- A former military depot in southeast Sacramento is being considered for a 300-megawatt data center, newly acquired records show.
- When the Sacramento Municipal Utility District pitched the federal government for funding earlier this year, the utility described Sacramento as a “premier destination” for data centers.
- Opposition is mounting from members of the Sacramento City Council and locals concerned about environmental ramifications.
Developers are gearing up plans for a 300-megawatt data center in southeast Sacramento, newly acquired public records describe.
At 300 megawatts, the project would have power needs that are six times greater than the size initially described by the Sacramento Municipal Utility District, and enter into a class described by the industry as “hyperscale” in size. In statements to the media and the public, SMUD has described a pair of data center inquires as “exceeding 50 megawatts.”
Hyperscale data center facilities make up the backbone of artificial intelligence companies and large-language models like ChatGPT, Claude and Google Gemini. These large-scale sites have also become the face of political backlash amid land-use and environmental concerns.
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SMUD has been in talks with Link Logistics since February about the company’s proposed data center project at a former military depot in southeast Sacramento, Abridged by PBS KVIE previously reported.
The plans include “a potential 300-megawatt large load customer planned for installation on a former military site in Sacramento known as Depot Park,” notes a grant application written by SMUD staffers.
The application was acquired by Abridged by PBS KVIE through the California Public Records Act.
Public records also describe the developer, Link Logistics, as a “committed large load customer” focused on “rapidly scaling AI data compute capacity.” Link Logistics is a subsidiary of Blackstone Inc., the world’s largest owner of commercial real estate and data centers.
Local cities and counties would be tasked with most of the approvals for a data center project. SMUD handles the infrastructure and would be “obligated to provide electric service” if a project was approved, according to the utility.
The city of Sacramento has not received a formal application for the Depot Park site yet, but at least two elected officials have met with Link Logistics in recent months.
Representatives from Link Logistics declined to answer questions about impacts on residents, the local economy or what kind of tech services the site would be dedicated to.
In a statement, Link Logistics spokesperson Paul Frankle said the company has owned and operated Depot Park for “many years” and is “proud to be part of the Sacramento community.”
“We regularly evaluate opportunities to make the best long-term use of the property in ways that support jobs and economic growth in the community, and that includes early conversations with SMUD about the site’s potential,” the spokesperson said.
Largest data center in the region
The Link Logistics project would be the single biggest electrical customer in SMUD territory, and the largest data center in the Sacramento region. The utility previously stated that it does not have any single customers over 50 megawatts.
Generally, 1 megawatt can power between 750 to 1,000 homes per year, depending on the weather, according to the California Energy Commission.
Much of Downtown Sacramento is fueled by a 60-megawatt substation. The city of Roseville says its peak electrical demand is 370 megawatts for its entire population of 167,000 residents.
The Sacramento region has been home to smaller data centers dating back to 2000, with sites that provide data storage for hospitals, banks and small businesses.
The largest projects currently on the ground include the Prime Data Centers near McClellan Park, which has a 44-megawatt campus between two buildings. NTT Data centers has a 52.7-megawatt campus in North Sacramento between three buildings.
A ‘premier destination’ for data centers
SMUD pitched the Sacramento region as a new hub for AI data centers as it sought funding from the U.S. Department of Energy, records show.
In March, the utility applied for up to $122.7 million to support the Link Logistics data center site. The grant proposal included up to $60.1 million in federal funding and $62.6 million in matching funds from Link Logistics.
“Sacramento is uniquely positioned to become a premier destination for data center investment,” SMUD staffers wrote in the grant application.
The grant describes that the utility’s affordable and reliable power makes “SMUD service territory a natural destination for hyperscale AI compute facilities.”
The grant application was ultimately not chosen for Department of Energy funding, but the paperwork described the changes being considered for Depot Park.
The project would see SMUD add a new power substation near the project site, and increase the power capacity of the neighborhood around the location from its current 499 megawatts to 973 megawatts. The application also states that there could be some “on-site” power generation. The Depot Park site currently has solar panels on one portion of the industrial park.
The grant, and its impending policy for large load customers, are part of SMUDs efforts to “plan ahead to serve a growing region,” SMUD spokesperson Gamaliel Ortiz said in a statement.
“The proposal was not about assisting a single customer and would have created additional capacity to support regional economic development,” Ortiz added.
“Our role is to evaluate system needs, plan responsibly and, if a project is approved, serve that load in a way that protects affordability, reliability and sustainability for our customers.”
Big gains projected for SMUD and Sacramento
SMUD and the city of Sacramento are also projected to see significant financial gains from the Link Logistics development, the grant application describes.
SMUD’s revenue earned from the area including the project site would double, rising from $168 million to $356 million, between 2017 and 2032, according to a concept paper that SMUD staff wrote to accompany the grant application. The city of Sacramento would see another $26 million in utility user taxes during that same time frame. SMUD has said the company and other commercial customers would pick up the bulk of the cost.
The concept paper also shows that over the course of decades about $256 million could be generated for “public good” programs. Those programs could provide funding for renewable energy resources and low-income assistance programs, records show.
The data center conversation is brewing as SMUD recently stepped back from its 2030 zero carbon goal. The move was made as the utility is trying to keep its electric rates affordable, the Sacramento Business Journal reported. Increasing costs of solar and wind energy sources, and changes in federal funding have created headwinds for the effort.
Large load projects to ‘pay their own way,’ SMUD says
With at least two data center projects in the pipeline, SMUD is shaping up its approach to how it processes data center projects.
On Wednesday night, the SMUD board’s policy committee will weigh in on a six-point set of “principles” dictating how to navigate rate costs and environmental concerns around data centers.
“Large load customers to pay their own way,” states the first principle, adding that data center customers would bear that costs and risks of their service.
Another principle states that “existing customers are held harmless” and that customers will not bear adverse financial impacts. The policies also lay out priorities for clean energy goals and seeking community benefits from large load customers.
City leaders debate data centers
The city of Sacramento is also taking on the topic of data centers. The Sacramento City Council is likely to hold a workshop on data centers in February 2027, considering options to craft a more direct policy, city spokesperson Gabby Miller said.
Mayor Kevin McCarty met with representatives from Link Logistics “several months ago,” he told Abridged.
“It was quick,” McCarty said, adding that he told the company, “We don’t have these in the city of Sacramento.”
When asked if he supports SMUD’s efforts to boost data centers in Sacramento, McCarty said, “You’ll have to ask that to SMUD … we don’t have any in the city of Sacramento … I look forward to our early 2027 discussion.”
Councilmember Eric Guerra also met with the data center company in April, public records show.
Guerra later posted on social media that “Data centers are not permitted in Sacramento and I strongly oppose allowing them in the city when there are too many unanswered questions surrounding impacts to our water and air.”
While the city of Sacramento does not currently have any large data centers within the city limits, Councilmember Lisa Kaplan believes that the lack of zoning code could still allow a project to be proposed.
Kaplan called for a moratorium on data center projects in September.
“They can bring in income, but at what cost?” Kaplan said.
The council workshop slated for early next year is set to dive into the possible air quality, water and land use concerns surrounding the topic of data centers. McCarty said that he wants the workshop to explain the value, if any, of having data centers near urban areas like Sacramento.
