Eagan council considering moratorium on data centers, crypto mining operations

Data centers in Minnesota: Why so many?

A growing debate in recent years has been the growing number of data centers needed with an increase in AI applications, and pushback from local communities who don’t want them in their area. FOX 9’s All Day spoke with Haley Chinander, a Minneapolis Federal Reserve analyst, to talk about the data center emergence and what it could mean in Minnesota.

EAGAN, Minn. (FOX 9) - The Eagan City Council is set to vote on a one-year moratorium on new data centers and cryptocurrency mining operations in the city this week.

Eagan moratorium on data centers

What we know:

The Eagan City Council is set to consider the moratorium during its meeting this Tuesday.

If approved, the moratorium would last until February 17, 2027, and prevent the city from approving applications for any new data center or crypto mining operation, or any expansions to any centers.

While the moratorium is in place, the city will conduct a study to determine the best regulatory approach moving forward for data centers.

The backstory:

Data centers have become controversial projects in recent years. Projects in Hermantown and Farmington were met with resistance from local residents when they were proposed.

Critics often raise issues with the vast amount of resources data centers draw from local communities, like electricity and water, and the potential to contribute to global warming. However, developers will say that data centers are the backbone of the digital world and critical for life in modern America.

Many of the same concerns are held for cryptocurrency mining, as it consumes a vast amount of processing power to perform financial transactions. Some cryptocurrencies, like Ethereum, have moved to a new type of mining known as "proof of stake" which uses less processing power, but some argue isn't truly decentralized – which is a major selling point of cryptocurrency over traditional fiat currency. However, any commercial cryptocurrency mining operation would be a traditional "proof of work" set-up.

What's next:

The council will take public comment on the moratorium during their Tuesday meeting before their vote.