The following is a transcript of the Sept. 8, 2025, episode of Public Power Now. Learn more about subscribing to Public Power Now at Publicpower.org/Podcasts. Some quotes may have been edited for clarity.
Paul Ciampoli
Welcome to the latest episode of Public Power Now. I'm Paul Ciampoli, APPA's News Director.
Our guest on this episode is Casey Crabtree, Director of Economic Development at Heartland Energy, a South Dakota-based joint action agency that provides wholesale electric energy to 29 cities and municipal electric systems in South Dakota, Minnesota, Iowa and Nebraska.
Casey is here to discuss Heartland Energy's Demand Adjusted Technology Advantage, or DATA, an interruptible data center rate policy customers can use to facilitate construction and operation of data centers, while also minimizing risk. DATA was launched in March of this year.
Casey, thanks for joining us.
Casey Crabtree
Paul, thanks for having us on. It's a pleasure to join you today and talk a little bit about our demand adjusted technology advantage or DATA rate.
Paul Ciampoli
Casey, one thing that struck me as I was preparing for this interview -- a question that occurred to me is why Heartland Energy decided to pursue the development of this rate policy as well as if you could provide additional details on the rate policy itself.
Casey Crabtree
A couple of reasons. We serve mostly rural customers. A lot of our customers are 2,000 people or less and we were starting to get a lot of inquiries about data centers, data center rates, some of these projects that you're familiar with in different parts of the country that's really starting to heat up here in the Midwest.
And so we needed to have something put together that we could help our customers with and really we've got some areas where I think this is just a fantastic fit for both our customers and Heartland where both can win and so we worked on this. It took us quite a while to be able to put this together, but we built out the DATA rate so that we'd have something that we could show those projects that are looking at our communities, what they could do and how we could partner with them.
Paul Ciampoli
One question that occurred to me…is there any flexibility built into this rate policy in terms of down the road as data centers are set up and running.
I would assume that there may be some tweaks you may want to make to the policy?
Casey Crabtree
Well, certainly. I think there's always those discussions as the market matures a little bit further. And really where we came up with this was studying some of those that have been successful with this in different parts of the country and those that have implemented this well here in the Midwest overall. So we do have some things that we built into that that make these projects eligible.
So it's not just a wide open deal…the load has to have a peak load of at least 5 megawatts, maintain an 80% load factor overall and it also has to have the capability of being interrupted.
And so that gives us a little bit of flexibility and really we're looking at communities and partnering with communities that have land available for this and that are excited about this kind of development and so it's been a fun process to kick that off and work with communities across our footprint to see which ones are the best fit for some of these projects.
Paul Ciampoli
What are the ways in which Heartland Energy is educating customers about the benefits of this rate policy?
Casey Crabtree
For our customers, we've spent a lot of time on that. I think it's a handful of different ways that we're approaching that. Of course, we reached out with some of that kind of mass communications by e-mail as we developed that looking for feedback.
We've also held in-person meetings in our home quarters or our headquarters here where we've invited them back and we went through that, went through the rate and how we developed that and the benefits of that for both the community and for Heartland as a whole.
And then we've also gone out to those communities that we think are probably the best fits for these types of projects based on transmission or other infrastructure restrictions that might exist out there, but the ones that fit best, we went out and we have met with community leaders.
We've met with City Councils, mayors, those that lead up the utilities and business folks as well, and the feedback has been extremely positive. And so we're excited about that and we continue to work with folks and make sure that these are a good fit for everybody, Paul.
And I think that's the key is it's got to be a good fit for the community, it's got to be a good fit for Heartland, it's got to be a good fit for the project as a whole and it's been a good discussion so far.
Paul Ciampoli
And correct me if I'm wrong, but I believe that at least some if not all of the states in terms of South Dakota, Minnesota, Iowa and Nebraska, those are all, I believe that there's been some discussion in the major media about how those are states that could potentially be attractive for data centers.
Casey Crabtree
Yeah, there's a lot of...traction here in the Upper Midwest on data centers as a whole, [the] climate is really attractive. Obviously, we're a little cooler than places in the South, especially in the winter and so we're seeing some advantages there.
We've also got, I think, some advantages just with what we're producing out of our tech schools and universities.
So from a talent wise [perspective], there's some good fits here in the Midwest overall and then of course our ability to produce and deliver reliable, cost effective energy and so that's been kind of exciting to piece that all together and begin to go down this path of delivering on these projects.
Paul Ciampoli
OK, great. Thanks, Casey. I think you touched upon this earlier in terms of the requirements for a customer to qualify for the rate.
Anything you wanted to add on that topic?
Casey Crabtree
You know, I think another piece of that whole thing -- we talked about an interruptible rate and we're really working with that. We want those customers to be able to monitor the market themselves and make adjustments themselves as well and so looking for folks that partner that way and I think the big thing is working with projects that understand how transmission works and some of the limitations that exist overall there and some of the studies that take place in the front end.
And so those are some things that we look at eligibility wise. Of course, they have to be an existing Heartland customer and inside our service territory to do this, but we found some really positive feedback not only from projects but from communities, both our largest community that we serve as well as some of our more rural areas where these would be a really good fit. So it's been exciting.
We went through this a couple of times at Heartland where we have crafted a specific kind of rate for economic development. We have an Energy One incentive that also exists that is for large customers like this. And so we've been through this path a couple of times.
And so as with anything, when you develop a new rate, you get better about communicating that with your customers and dialing that in when that comes out of the gate. And so we feel very positive about the reaction so far and the opportunities that exist in our communities.
Paul Ciampoli
One of the purposes of this podcast, at least from my perspective, is it is a potential learning opportunity in terms of peaking interest of other listeners on the relevant topic that we're discussing.
So against that backdrop, I wanted to get your thoughts in terms of if another joint action agency were to consider pursuing the development of a similar rate policy, what would you say are the key steps they would need to take in order to be successful in terms of implementation?
Casey Crabtree
Well, Paul, I would just say from somebody in South Dakota who listens regularly to this, I appreciate what you're doing and the ability for others to learn from this. And I think that's one thing that makes public power special is we can learn from each other. We definitely learned from others when we put this together.
We work quite a bit with another group called NIMECA [North Iowa Municipal Electric Cooperative Association] out of Iowa, and we've got a lot of feedback from them and some of their members on how this sets up, how this works in real life. As you're crafting your rate, you think you've got all these things figured out, but it's really good to go back and talk to those who put it into practice.
And so we were not afraid to reach out to others who went through this before and as they say, the school of hard knocks is always a really good educator.
And so we reached out to those groups like NIMECA and others to get feedback on that. And I think the big thing with that is you've got to be able to be willing to adjust based on that feedback. And so that was part of our process and I would suggest the same to anybody else who's working through that whether you call us or your neighbors that are working through this, I think it's worth really having lots of conversations to make sure that you've got this dialed in and also approach this with some flexibility. It's a changing market and a growing industry and so I think it's just worthwhile to look at it that way.
Paul Ciampoli
Casey, other than obviously this podcast episode, where else can APPA members go to learn more about the rate policy?
Casey Crabtree
Yeah, you can go to our website -- has lots of information on it. So go to Heartland Energy and you can look up the DATA rate there -- that has a lot of information on the specifics that we have with it. It's everything from our purpose, the eligibility, some of the demand response requirements that we have in place, the rate structure, how we agree to this and some of the monitoring that we will do back and forth with our customers and their ultimate customers.
Go check out that website, there's lots of details on that and we're excited about where things are headed.
Paul Ciampoli
Thanks so much for taking the time to speak with us today. We've had Russell Olson, Heartland Energy's CEO on the podcast as well, so both of you obviously have an open invitation at any point in time to join us again as guests on the podcast.
Casey Crabtree
Well, I appreciate that. I appreciate you guys putting this program together. It's a great learning tool for all of us spread across the country.
And so keep up the great work and we were glad to join you today and look forward to catching your next podcast soon.
Paul Ciampoli
OK, great. Thanks again, Casey.
Casey Crabtree
Thanks, Paul.
Paul Ciampoli
Thanks for listening to this episode of Public Power Now, which is produced by Julio Guerrero, Graphic and Digital Designer at APPA. I'm Paul Ciampoli, and we'll be back next week with more from the world of public power.
