Bismarck, ND — Data centers are positioned to significantly grow communities’ property tax bases and add to local populations, according to a panel discussion held Wednesday at the Lignite Energy Council’s annual conference. Panelists emphasized the opportunity data centers present for North Dakota’s energy resources, despite ongoing public scrutiny.
Stacy Tschider, CEO of Rainbow Energy Center, Dave Nehring, Director of Local & Regional Affairs for Applied Digital, and Ellendale Mayor Don Flaherty, discussed the benefits, best practices, and common misconceptions surrounding data centers. These large facilities house computers for financial transactions, email, artificial intelligence, and other uses, and have drawn criticism related to their size, noise, proximity to homes, and water usage.
The city of Ellendale’s experience with Applied Digital, which built a data center campus nearby, was cited as a prime example. Mayor Flaherty stated that Applied Digital is expected to bring 300 to 350 full-time data center employees, many of whom will reside in Ellendale or commute from nearby areas. He projected a population growth of 400 to 600 people over the next five years for the city, which currently has approximately 1,100 residents.
Flaherty acknowledged the strains this project placed on the small town but encouraged communities to welcome new residents. He noted that Ellendale annexed Applied Digital’s property in early 2025, and by the end of that year, the city’s taxable value reached $3.5 million. This value is anticipated to grow more than tenfold over the coming years. This significant shift has allowed the city to freeze utility rates and establish special assessment “holidays” covered by the city’s general fund, which Flaherty described as indirect ways to help residents save money.
Nehring, a former state lawmaker, affirmed Applied Digital’s commitment, stating the company 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.” He projected that Applied Digital will become the largest property taxpayer in North Dakota by 2028 or 2029, contributing over $25 million annually. Applied Digital currently has data centers or planned projects in or near Ellendale, Harwood, Jamestown, and Oliver County, including a project west of Center which Nehring called a "pretty phenomenal thing for Oliver County."
Panelists stressed the importance of collaboration between data centers and local communities, viewing it as a partnership between government and business. Mayor Flaherty remarked, “This is a partnership, and it’s a purposeful partnership,” countering online accusations against him of "dancing with the devil" due to his community's relationship with the data center. Nehring also noted that while community town halls have been contentious at times, they foster open and fact-based discussions.
Tschider highlighted data centers as job creators and an opportunity for all of North Dakota’s energy resources, including coal and gas. Nehring added that power availability is the number one consideration when deciding where to build a data center. Tschider urged, “we should be laying out the red carpet” for data centers. Rainbow Energy Center owns Coal Creek Station, North Dakota’s largest coal-fired power plant.
Both Tschider and Nehring addressed criticisms regarding data centers’ water usage and noise, with Nehring attributing misinformation and disinformation to social media users. A data center nondisclosure bill recently failed in a North Dakota Senate vote.
