The City of Lebanon has received unsolicited inquiries about a 10-to-15-acre data center in city limits. City Administrator Troy Schulte sat down with the Record on Thursday for an interview disclosing the inquiry and preliminary information about the proposal.
Because the project is “in the very early stages of the conversation,” it “may fall apart for 40 reasons,” Schulte said. If it succeeds, it could be six months before the data center is operational.
Acknowledging concerns
Schulte is well aware of the vocal public opposition to data centers in general. The day of the interview, he mentioned receiving an email from an individual urging the city to avoid data centers completely. Whether the email was from a resident or community stakeholder, he cannot be sure, he said. There was no address. Opposition to data centers in public meetings have also come largely from outside the city, coinciding with the recent development of a data center in nearby Webster County.
Schulte’s purpose in giving the interview, he explained, is to include the public in the decision-making process from the very beginning.
What it’s not
Schulte cannot say at this early stage exactly what the proposal is, but he was specific about what it is not.
The inquiry is not from Facebook/Meta or Google, Schulte said. Beyond that, he would not confirm the identity of the interested party.
As for the facility itself, it is not a hyperscale data center like the ones found in Kansas City or Warrenton, Mo., he said. An article from IBM Think says size is the difference between a “hyperscale data center” or otherwise.
“A hyperscale data center differs primarily from traditional data centers by virtue of its sheer size. A hyperscale data center requires a physical site large enough to house all associated equipment—including at least 5,000 servers and quite possibly miles of connection equipment. As such, hyperscale data centers can easily encompass millions of square feet of space,” according to the article by Phill Powell and Ian Smalley.
By comparison, Schulte reports Lebanon’s proposed data center would be 10-to-15 acres, or 435,600 to 653,400 square feet.
The proposed facility would not threaten the water table but is planned to be air-cooled, Schulte said.
“More water would be used at a [Yellowjackets] football game,” Schulte compared, “but it does use power.”
Power usage
The expected power usage from the data center is a point in favor of proceeding with the proposal, Schulte thinks.
“As the owner of a municipal electricity provider, we are always looking for a large-scale industrial customer,” he said. “It takes pressure off residential utility customers.”
The City of Lebanon uses a tiered-rate structure for utility customers, with residential customers paying $0.107 per kilowatt hour and a service availability fee of $28, according to a rate schedule provided by city hall. Large-scale industrial customers pay a service availability fee of $715 and $ 0.0784 per kilowatt hour up to 1.4 million kwh. Demand rates for these industrial accounts for times of peak usage are $ 12.20 kilowatt demand (kwd)
Though utility rates must increase to keep up with the six-figure cost of qualified lineman salaries, Schulte says more industrial customers on the city’s power grid will temper the effect to residential customers.
“Rates will go up a lot less with one [a data center on the grid], than without,” he said.
Whether or not the city’s existing electrical infrastructure makes Lebanon an attractive location for the inquiring party remains to be seen. The next step in the planning process is a load study by the city’s wholesale electricity supplier, Show-Me Power. The city may need to upgrade or replace transformers or possibly add a substation.
Costs of upgrading the infrastructure would be paid by the developer, Schulte confirmed. “This may cause the deal to collapse if they can find existing capacity in another location,” he said.
“We have a duty to look at it,” Schulte said in the interview. He also mentioned potential benefits to the school district.
“It’s an industrial customer, but it’s not bringing a lot of jobs. It is a larger property-tax payer, without adding many students,” he said.
Planned location
The developer is considering both city-owned and privately owned locations within the city of Lebanon for a potential site for the data center. If they move forward with city-owned property, Schulte confirmed the developer will pay full market value for the real estate and that any action pertaining to the sale will happen in open meetings, and details of the deal could become public, “theoretically as early as this month.”
If the developer decides to proceed with privately held land, the details about location could potentially remain out of the public record longer until the sale is final and duly recorded with the county.
As of now, there are no ordinances govern data centers within the city of Lebanon. If the deal moves forward, the city will set rules that reflect the values and economic development goals of the city, Schulte says.
One existing planned zone, light industrial, would permit data centers in Lebanon and require them to be separated from residences and otherwise regulated by the city. It is Schulte’s opinion that a data center should be within the city, an area with zoning rules, instead of in unregulated, unincorporated areas in the county.
“We build stuff in Lebanon…The technology is changing so fast as these things scale…In a scale that makes sense for Lebanon that will not create long-term issues…we’d be making a mistake by not participating,” Schulte said, “if they pay full freight and it makes financial sense for the city.”
“We want to avoid environmental impacts or anything that changes the nature of the city. Big-scale changes will change the nature of the city in the wrong way.”
The city is making this announcement in the early planning stages in the interest of full transparency, Schulte said. If the proposal moves forward, he plans to keep the public involved and informed every step of the way including, not only frank disclosures in public meetings, but participating in a public forum to be hosted and moderated by the Record.
