Here’s a suggestion for a new City Council motto: Opacity is Us! And no, I’m not talking about Council’s stumbling attempts to delegitimize/criminalize/effectively ban the demon weed from Colorado Springs. Nor am I fuming over the sit/lie/Po’ People Get Out Of Town ordinance.
Instead, let’s consider Council’s decision at yesterday’s meeting to give a fat package of tax breaks to … well, to a company to be named later.
The anonymous beneficiary of city largess, referred to only as “DC West,” is considering Colorado Springs as a site for a couple of $40 million data centers. So sensitive is the company to publicity that it insisted that it not be publicly identified while it makes up its corporate mind — and Council obligingly went along with the request.
Such shenanigans are SOP for certain kinds of eco-devo deals. Others, like the panting pursuit of Tesla’s multi-billion dollar ‘giga-factory’, are far more transparent.
But when the city signed this particular blank check, it seems clear that many councilors didn’t consider the deeper implications of the deal. Or if they did, it would have been in executive session during Monday’s work session when the suitor was identified to Council. That seems inappropriate, but I’ve never much liked the whole Secret Santa thing anyway, so, oh well…
On the surface, the agreement seems to make sense. The city partially waives sales and use taxes for the projects in return for a bunch of construction jobs and a handful of permanent positions. Colorado Springs Utilities gets a reliable customer with steady, 24/7 power consumption requirements.
Why Colorado Springs? Because our commercial/industrial electrical rates are well below national averages.
But to guarantee continuing rate stability, CSU may have to keep its downtown Drake power plant in commission indefinitely. That would suit certain sooty-fingered climate deniers, but it might displease downtown advocates and other who believe that we should begin the transition t natural gas and renewables.
We don’t know how large the two facilities will be, or how much electricity they may require. At present, CSU has approximately 100 MW of “surplus” generating capacity. Electric demand is seasonal, peaking on hot summer days, so there’s reserve capacity during the rest of the year. It’s difficult to store electric power, so steady customers like data centers are particularly attractive.
So in some sense it’s a no-brainer for CSU. The data centers will pay for electricity that now literally disappears into the void. And if the deal preserves Drake for a few more years, that’s just fine by them — Drake is an inexpensive base load generator.
But will it be a good deal for the community? It’s not clear that Council even debated that subject.
A few more facts would have been helpful – for example:
- What will be the total electric demand of the two facilities? As the Natural Resources Defense Council points out, disclosure of energy and carbon performance is an important analytical tool. “Public disclosure is a powerful mechanism for demonstrating leadership and driving behavior change across an entire sector. In their corporate and social responsibility reports, industry leaders in data center efficiency should voluntarily disclose operational performance metrics (such as fleet-wide server utilization levels) and organizational performance (e.g., how they address split incentive issues internally and externally).”
- What about water? According to the NRDC, a medium-sized data center uses as much water annually as two 18-hole golf courses.
- Will the operators want a guaranteed long-term rate from CSU?
And finally, what impact will this deal have on the long-term development of downtown and near-downtown? By guaranteeing Drake’s operation for the next 10, 15, even 20 years, are we forfeiting thousands of jobs and billions of dollars in future economic development?
As the deal moves along, let’s hope that our elected officials take a closer look at its longer term implications.