Officials tout population growth, larger tax base, other benefits of data centers in North Dakota

Data centers grow communities’ property tax base, add more people to the local population and are an opportunity for North Dakota’s energy resources, according to a panel discussion Wednesday at the Lignite Energy Council’s annual conference.

Rainbow Energy Center CEO Stacy Tschider, Applied Digital Director of Local & Regional Affairs Dave Nehring and Ellendale Mayor Don Flaherty discussed benefits, best practices and misconceptions they see related to data centers, which have generated intense public scrutiny.

Data centers, which are huge facilities housing computers to handle financial transactions, email, artificial intelligence and other purposes, have drawn growing pushback from critics related to their size, noise, proximity to homes, water usage and other factors. 

The panelists cited the city of Ellendale’s experience with Applied Digital, a company that built a data center campus near the small town. The mayor said Applied Digital will ultimately bring in 300 to 350 full-time data center employees, many living in Ellendale or commuting from outside. He predicted a population growth of 400 to 600 people over the next five years for the city of about 1,100 people.

He acknowledged strains from the project on the small town but encouraged communities to get to know new residents, to become “good Ellendalites” in his town’s case.

“We have to befriend them, get to know them, build relationships with them, welcome them to our community, not as a threat but as someone who is going to strengthen our community,” Flaherty said. 

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The city of Ellendale annexed Applied Digital’s property in early 2025. At the end of that year, the city’s taxable value was $3.5 million, expected to ultimately grow more than tenfold over the next several years, the mayor said.

“That is a huge shift,” he said. The city is able to freeze utility rates and create special assessment “holidays” covered by the city’s general fund – indirect ways to help people save money, the mayor said.

Applied Digital feels “as though we should pay our property taxes just like any other industrial user, and help prop up the communities that we’re in,” said Nehring, a former state lawmaker. 

Applied Digital is projected to be the largest property taxpayer in North Dakota by 2028 or 2029, at more than $25 million a year, he said. The company has data centers or planned projects in or near Ellendale, Harwood, Jamestown and Oliver County.

Data centers and local communities should work together as a partnership between government and business, Nehring and the Ellendale mayor said. 

“I don’t see them as a corporate giant that tells us what to do. I don’t think that they see us as a small, little community that is backwater and going to listen and hang on their every word,” Flaherty said.

Community town halls have been “contentious” at times, but they foster open honest, “fact-based” discussion, Nehring said. 

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“I think what we’re building west of Center is going to be a pretty phenomenal thing for Oliver County,” he added.

Data centers are job creators and present an opportunity for North Dakota’s coal, gas and all energy resources within the state, Tschider said. The No. 1 consideration in where to build a data center is power, Nehring said. 

Tschider said, “For us, we should be laying out the red carpet. We shouldn’t be fighting the data centers. We should be welcoming them to our communities,” he said. Rainbow owns Coal Creek Station, the largest coal-fired power plant in North Dakota.

Tschider and Nehring hit back at criticisms about data centers’ water usage and noise. Nehring said misinformation and disinformation comes from social media users. 

The Ellendale mayor said he’s been accused online of “dancing with the devil” because of his community’s data center relationship.

“That’s the biggest joke in the world. This is a partnership, and it’s a purposeful partnership,” Flaherty said.

Reach North Dakota Monitor reporter Jack Dura at [email protected].