Some sections of a future Applied Digital data center near Harwood, North Dakota, were enclosed on March 4, 2026, while other sections were ready for more concrete panels to form the walls. (Photo by Jeff Beach/North Dakota Monitor)
BISMARCK, N.D. (North Dakota Monitor) – Data center development is a growing area of concern in North Dakota and has become an issue in the election for two seats on the Public Service Commission, the agency that regulates energy infrastructure in the state.
One of the Republican candidates, Chris Olson, is calling for a moratorium on new data center development until the North Dakota Legislature has the opportunity to consider state-level regulations and safeguards during the 2027 legislative session.
“There should be, definitely, a moratorium put in place until we have a good framework or a system worked out on who is going to regulate this,” Olson said. “Unfortunately, the world is moving faster right now than the people of North Dakota can keep up with.”
Republican incumbent Sheri Haugen-Hoffart said she plans to keep a close eye on any utilities that serve data centers when they request rate increases in order to ensure any rise in energy costs is unrelated. But she said any moratorium on development should be a decision made at the local level.
“Right now we need to keep things local,” Haugen-Hoffart said.
There are two seats on the Public Service Commission, which regulates utilities, on the ballot in 2026. Olson is attempting to unseat Jill Kringstad, the former director of business operations for the agency who was appointed to replace Julie Fedorchak, for a two-year term in the June 9 Republican primary. Scot Kelsh was nominated by the Democratic Party and will face the winner in the general election.
Haugen-Hoffart is running for reelection to a six-year term. She is being challenged by Republican Deven Styczynski in the primary. Whomever comes out on top will face John Pederson, the Democratic nominee, in the general election.
The Public Service Commission does not have the authority to regulate data centers. But it does have jurisdiction over related energy infrastructure, like transmission lines or natural gas plants, that are often essential to such projects. It also has the legal authority to approve or reject rate increases proposed by investor-owned utilities like Otter Tail Power.
That could change in 2027. An interim legislative committee is studying the impact of large loads, like data centers, on the electrical grid and may recommend legislation on the subject.
“I feel that that committee will come up with recommendations regarding large loads and if we should have any additional regulatory oversight,” Haugen-Hoffart said.
Kringstad said those decisions have to be made by the Legislature.
“The PSC doesn’t make policy. We execute it. I think there needs to be a very serious look on the impacts of data centers to the communities, to the grid, how the costs are being borne,” Kringstad said. “But how, and who does it, I think is a policy decision that’s going to have to be done by the Legislature.”
Pederson said the Public Service Commission is the best agency to provide that oversight.
“It’s a logical extension of what the Public Service Commission’s charged to do on the public’s behalf,” Pederson said.
Those decisions are currently being made by county commissions across the state as data centers are proposed in Oliver, Mercer and other counties. Olson said he thinks there needs to be a moratorium until the state can establish a regulatory framework, albeit one that leaves most of the control in local hands.
“That would be my wish that we just take a pause, we take a breath, and we really get a good handle on what we’re dealing with because as of right now, I don’t believe we have that,” Olson said. “I’m not anti-industry. I’m not anti-development. However, just me, the scale of these projects is mind boggling.”
Styczynski wants to see some basic regulation, such as how energy will be prioritized when the grid is stretched thin on winter days when the temperature is 20 degrees below zero.
“I would expect some regulation where you would say that the homeowners and dwelling structures would get priority of power over the data center, just in terms of, you know, keeping heat on,” he said.
Kelsh said he is worried electricity costs could more than double as a result of the energy demand from data centers and suggested developers should build excess energy generation capacity so the extra power can go back onto the grid to help consumers.
“They should be more than paying their own way in terms of the amount of juice they’re using,” he said.
Kelsh said North Dakota, and the Public Service Commission in particular, should be proactive while there’s still time.
“They are literally new on the landscape, but they’re also new in the political landscape, and they’re new enough that we can get out in front of these before they start proliferating everywhere,” Kelsh said.
Pederson said he wants to see the Public Service Commission invested with some authority to oversee the location of data centers, like it already does for power plants. He said the commission has to be able to factor in a company’s support, or lack thereof, in a community.
“Are they working with and cooperating with the local community, or are they threatening to force their way through in asserting eminent domain?” Pederson said. “People who abuse their neighbors aren’t good neighbors, and I don’t think deserve to have the benefit of North Dakota resources, if that’s the way they choose to act.”
The Democratic nominee said data center developers should be required to participate in a structured series of hearings in the community before a project receives a green light.
“I want to insist on community hearings before projects proceed, and I would expect proposed data center projects to be required to have decommissioning plans. That is a plan for what happens when the life cycle of the new enterprise would come to an end,” Pederson said.
Styczynski said the regulatory decisions on data centers have to be made as locally as possible. But he said he suspects that decommissioning could occur sooner than the developers plan. He projects that an AI bubble could burst and have long-term consequences for the state.
“Now, whether that’s in the next decade or 15 years from now, that remains to be seen,” he said. “I’m hoping that the state isn’t being short-sighted and would be a little choosier on who they want to court for AI purposes, so that, you know, we don’t have a bunch of derelict businesses.”
Kelsh said many people in the state feel they are not being listened to when new development is proposed in their area. He’s promising to change that if elected.
“We’re dropping the ball. Landowners are getting angry. They’re upset,” Kelsh said.
Every candidate said the Public Service Commission needs to subject future rate increases to strict scrutiny to ensure utilities are not passing data center costs onto ratepayers.
“With the next rate increase, if they serve a data center, we will ensure that those costs are not part of the rate case. Those costs should be the obligation of the customer,” said Haugen-Hoffart, the customer being the data center. “There will be strong regulatory oversight.”
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