Questions swirl around Xcel/Amazon land deal in Becker

The Minnesota Star Tribune headline sums it up:

Xcel said a nearly $8M land sale was a good deal for ratepayers. The buyer flipped the land to Amazon for $73M.

The land in question is an undeveloped 348-acre parcel near Xcel’s massive Sherco power plant complex in Becker. The land is expected to host a huge new Amazon data center, expected to require 600 MW of electric power. That amount is roughly equivalent to the output of Xcel’s nearby Monticello nuclear power plant.

I mentioned these real estate transactions in a post a few weeks ago, after running across this account in Finance & Commerce published back in November.

Both Finance & Commerce and the Star Tribune‘s Walker Orenstein outline the history of the deal:

In April 2024, Xcel sold the land to a company named Elk River Technologies, LLC. According to records maintained by the MN Secretary of State’s office, the company was incorporated in August 2023. The company’s address matches that of a law firm located in the IDS Center in downtown Minneapolis.

The $7.7 million land sale from Xcel to Elk River Technologies was a no-bid deal. The transaction was so unique it required separate approval by the state Public Utilities Commission (PUC).

The PUC approved the deal under the belief that a bidding process could have produced a higher bidder who would use the property for some purpose other than the building of a massive, power-hungry data center.

Who is Elk River Technologies? Orenstein reports:

Only later did Elk River Technologies reveal it was a subsidiary of Kansas-based engineering and construction firm Black & Veatch, which has also consulted in the past for Xcel on operations at the Sherco coal plant.

Black and Veatch (B&V) is a multi-billion-dollar engineering and construction behemoth headquartered in Overland Park, Kansas. So, a consultant doing work for Xcel — consulting work paid for by Xcel’s monopoly customer base — purchases land from Xcel at a below-market price.

B&V/Elk River Technologies then turned around, six months later, and flipped the land for $73 million to Amazon, the world’s 5th largest corporation measured by market capitalization.

Xcel’s ratepayers didn’t see a dime from B&V’s more than $65 million windfall. That works out to more than $10 million in profit for every month B&V held the property on its books.

Needless to say, consumer advocates, the PUC itself, and many others are now raising questions about the transactions, and what B&V did, if anything, to earn this ratepayer-subsidized windfall.

We’ve written frequently about data centers because of their potential to completely transform the electric utility industry.

We’re still in the early, literal land-rush days of the phenomenon. Minnesota has chosen to rely on state regulators, rather than a free-market, to protect consumers from government-granted monopoly providers, and the opportunists who feed upon them. Perhaps the regulators could start doing their jobs as Xcel seeks another massive rate increase this year.