City Council Minutes 10-12-2026 SpecialMINUTES
MONTICELLO CITY COUNCIL SPECIAL MEETING
Monday, October 12, 2026 — 5:00 p.m.
Monticello Community Center
Present: Lloyd Hilgart, Charlotte Gabler, Kip Christianson, Tracy Hinz, Lee Martie
Absent: None
Staff: Rachel Leonard, Sarah Rathlisberger, Angela Schumann, Matt Leonard, Tom
Pawelk, Sara Cahill, Jim Thares, and Jennifer Schreiber
1. Call to Order
Mayor Lloyd Hilgart called the special meeting to order at 5:00 p.m.
2. Discussion with Xcel Energy on Data Centers
City Administrator Rachel Leonard outlined the purpose of the meeting, explaining that
Xcel Energy was asked to provide information about electric power studies and
regulation prior to City Council consideration of land use applications related to data
center development. In public meetings about data center development there have
been recurring questions about power needs and the potential impacts on existing
customers. It was noted that the City of Monticello doesn't have authority to regulate
electrical power, but the City Council should have a clear understanding of how these
areas are regulated in order to make decisions within its authority.
Ms. Leonard introduced Xcel Energy representatives Jake Andre and Scott Johnson, who
provided an overview of electrical infrastructure planning, regulatory requirements, and
customer protections associated with large-scale development, particularly data
centers. The presentation addressed concerns raised by the public regarding electrical
demand, infrastructure needs, and potential impacts on existing utility customers.
Mr. Andre and Mr. Johnson discussed Minnesota's 2025 legislation establishing
protections for large electrical users, including data centers requiring 100 megawatts or
more. Xcel's proposed tariff, subsequently approved by the Public Utilities Commission
(PUC) in May 2026 with modifications, includes protections. These proposed protections
include:
• Requiring developers to pay all direct electrical interconnection costs.
• Establishing a minimum 15-year service commitment.
• Requiring payment based on at least 80% of contracted demand.
• Imposing exit fees for customers terminating agreements early.
• Requiring financial security to protect against unpaid bills.
City Council Special Meeting Minutes — October 12, 2026
These measures are intended to ensure that large electrical users are responsible for the
costs associated with their projects and minimize financial impacts on existing
customers.
Council members asked several questions regarding electrical capacity, reliability, utility
rates, infrastructure improvements, and the regulatory process for large-scale
developments. Xcel Energy representatives provided the following clarifications:
Utility Rates and Customer Protections: Minnesota's approved large -load tariff
requires data centers and other large electrical users to pay costs associated with their
projects. The tariff includes minimum service commitments, financial security, and early
termination fees to protect existing customers from additional costs.
Electrical Capacity and Reliability: Large-scale developments generally require
additional electrical generation and transmission infrastructure. Xcel indicated that
extensive planning and regulatory oversight are intended to ensure these developments
do not negatively impact electrical reliability or existing customers.
Determining Power Needs: Electrical requirements are initially estimated based
on the developer's proposed development and anticipated demand. These estimates
are refined as projects advance. Requests for additional capacity beyond approved
levels require further evaluation.
Monticello Tech Project: Xcel indicated that the proposed development was in
the Facility Study phase, with preliminary infrastructure costs, design information, and
timelines anticipated by the end of 2026.
Transmission Lines and Property Impacts: Xcel evaluates potential transmission
routes based on existing infrastructure, environmental considerations, and impacts to
property owners. The PUC oversees the permitting process, which includes a public
comment component, and ultimately decides the location of the transmission lines.
Development Timelines: Staff explained that the City's ordinances establish
timelines for development approvals and allow developers to request extensions, which
the City considers based on applicable requirements and circumstances.
Potential Benefits to Existing Customers: Xcel explained that large customers
may help reduce overall utility costs by contributing revenue toward shared
infrastructure expenses. Infrastructure improvements associated with these
developments may also benefit the broader electrical system.
Overall, the discussion focused on ensuring that large-scale developments have
adequate electrical infrastructure, that existing utility customers are protected from
City Council Special Meeting Minutes — October 12, 2026
additional costs and reliability impacts, and that opportunities exist for public input
throughout the regulatory process.
3. Adjournment
By consensus, the meeting was adjourned at 6:30 p.m.
Recorder: Jennifer Schreibe'G I, /viol
t
City Admini trator IV
City Council Special Meeting Minutes — October 12, 2026