Xcel Energy CEO: Data centers won’t impact your electric bill

MINNEAPOLIS (FOX 9) - Bob Frenzel, the CEO of Xcel Energy, calls electricity "the most consequential product I think man has ever made."

But to a crowd of listeners at the University of Minnesota, as part of the Carlson School’s "First Tuesday" series, he said Artificial Intelligence promises to be just as transformational to the world.

He believes the data centers that power AI, with the huge energy demands they bring, may actually lower costs for everyone.

Data center power concerns

What we know:

A number of large-scale data centers are now in the planning stages across Minnesota.

With them have come serious concerns from communities, grappling with questions of environmental impacts and the costs to build and supply the power they require.

"Super question. I get it all the time," said Frenzel, when asked if data centers will push up the price of power. "And if done correctly, actually, hyper-scalers, data center development and data centers in general should actually, all things being equal, help bring the cost of electricity down for all of our customers."

Make tech companies foot the bill

How it works:

Frenzel pointed to a deal with Google, announced in late February, to power a data center planned near Pine Island, north of Rochester.

It’ll take an enormous amount of power. But Frenzel says the existing power grid is large enough to handle the load, so there’s no additional costs there to pass on to consumers.

And Google, per the deal, pays for the rest of the infrastructure required to generate the power, so that is also not something other customers will be on the hook for.

"In this case I have to build four new power plants for them to power the 1,900 megawatts of renewable energy that they’re going to get powered with. But they’re going to pay for all of that new generation themselves."

‘We don’t need a whole new grid’

What else to know:

Frenzel believes AI is a world-changing technology that must be supported with the development of data centers.

In his own business, for example, he says AI holds the promise to make electrical grids far more efficient. He said the current grid can take the capacity needs of the exploding demands of data centers, but improvements are also crucial.

"We don’t need a whole new grid. We need to make the grid that we have more efficient, which we can do through technology."

He also pointed to the advancements in wind and solar power to meet the goals of becoming carbon-free in the next several decades, as well as high-capacity battery development to store clean energy longer.

Frenzel, a former nuclear engineer in the U.S. Navy, also advocates for developing new nuclear technologies, which face far more opposition and controversy around the safety of radioactive waste.

"If we want to be carbon free, if we want to serve large, high energy intensive loads, I think nuclear has to play a role in the future, because of its carbon free nature," he said. "And I think that’s a down payment I think we should be making as a country."