A new data center coming to Iola isn’t even online yet, but Iola City Council members are looking at what may need to happen if the center expands.
Council members approved Monday the purchase of another 2-megawatt diesel generator, to be added to three other generators the city acquired in October, to be placed in Iola’s north industrial substation.
The cost, about $524,000, will be recouped in short order — perhaps in as little as three years — as the city’s electric sales increase with the new data center, and as Iola receives capacity credits for having excess generation.
But there’s a new wrinkle to consider, Power Plant Superintendent Mike Phillips said Monday.
After speaking with executives from Vine Energy, which is building a 3-megawatt data center at the northwest edge of town, Phillips expects the company will quickly expand.
A full-scale expansion would put the data center’s usage at 10 megawatts, “and we’d be quite a bit short” of meeting that capacity, Phillips said.
The 10-megawatt projection “caught everyone off guard,” City Administrator Matt Rehder told the Register.
Vine Energy purchased 10 acres of land from the city last August for the data center, with the company holding an option to purchase an additional 10 acres within the next year.
Monday’s action, to add the 2-megawatt generator, still keeps Iola “ahead of the game,” Phillips said.
But he also noted the data center could grow much more rapidly than the city’s ability to get added generation capacity.
Iola’s generating capacity, which will increase to about 36 megawatt hours once the new generators are online, would come up about 3 megawatts short if the data center expands, Phillips said.
There are two options to consider in that case.
The first, and most preferable, is to find more generation somewhere.
“I haven’t found any more good deals yet,” Phillips said. “We’re keeping our eyes out for good prices.”
The city could also purchase added electric capacity through the Southwest Power Pool, but that is substantially less cost effective, Phillips said.
One of the wild cards to consider, Rehder noted after the meeting, was the closure of one of Gates Corporation’s major production lines in Iola. The plant formerly used about 3 megawatts of power.
