In this Feb. 12 webinar, participants learned about the unique advantages Tribes bring to data center developers, the key elements required for successful data center development, the importance of the right partners in delivering maximum value to the community, and available sources of support for Tribes evaluating whether a data center may be a good fit.
ELISAH VANDENBUSSCHE: Thanks for joining, everyone. We'll just give everyone another minute or so to get connected and then we'll get started.
Alright. I know folks are trickling in still. We're going to go ahead and get started. We've got a lot to cover today. But this all, as you've hopefully seen in the chat and on the screen, this is being recorded. So anyone who misses anything will be available to you. But my name is Elisah VandenBussche. I'm on the strategic initiatives team here at the Office of Indian Energy at DOE. I'm thrilled to be here talking to you today. I'm joined by two incredible speakers who I will introduce shortly.
I'm going to start real quick with a few logistics. So Claire, if wouldn't mind going to the next slide. I want to start with a big, big thank you to Amy Skenes, who's running Zoom logistics today. Definitely could not do this without her. So if you need anything from the technical side, she's your person there. And then I also want to thank Claire Levesque, who's running our slides and has also been a major contributor to all this work here in the Office of Indian Energy. So really appreciate her as well.
We do have live captions available as you can see on the screen. Those are not automatically on. But there should be a “Show Captions” button at the bottom there where you can turn those on. You can submit any questions that you have into that Q&A box. So if you look at the bottom of your screen, there should be a Q&A box that's separate from the chat. We won't be able to chat or track both in parallel, so please do use that Q&A box if you have a question for the presenters.
And then this webinar is being recorded and will be posted, and the slides will be shared as well. So it's always a question we get. So that is the case. You will have access to this information.
And next slide, please Claire. Let's get to why we're here today. So we know obviously data centers are a huge topic of conversation. We folks are coming here with lots of different perspectives. Our main focus today is going to be sharing information aimed at Tribal government leaders, staff, and Tribal enterprises to help you consider whether a data center is the right fit for your economic development plans.
This administration really sees data centers as a big opportunity, but we also know here in IE that it doesn't help anyone for a Tribe to get partway down the line and then find out it's not the right fit for your area. So we want you to come away feeling like you have some tools or next steps to inform your own decisions for your Tribe.
So with that table setting, here's what we have planned for today. I'm going to give a short introduction on data centers from our office. And then I will cover a few of the ways that we support Tribes from our office. And then I'm going to hand it over to Ken Ahmann from Colusa Indian Energy, who will give an overview of their experience developing power plants—projects, excuse me—including how they're partnered with data centers.
And then we'll go to Ryan Brooks from Data Holdings, who will talk about his extensive experience running a successful Tribally owned data center. So lots of great information for you here today. Thanks both for being here. I'm really looking forward to this. And then after that, we'll use the rest of the time to answer as many of your questions as we can get to. I know there's a lot. Next slide, please Claire.
I am not going to spend too much time here on our office. Like I said, we have a lot of content, but I will drop some resources into the chat later if you want to learn more about the Office of Indian Energy. The most important thing for us to emphasize is that our mission is driven by our statute, which highlights Tribal self-determination and directs us to support federally recognized Tribes, including ANCSA corporations, to reach their energy goals. So you'll see that underlying everything we do.
Next slide. So now what we're all here to talk about. Data centers are getting a ton of attention in the news. And mostly they're talking about these huge AI data centers that can be very resource-intensive. But we want to start with a level set here that those are not the only data centers out there. There are opportunities all along the line here, even if they're not getting all the press. So those do exist. There are opportunities associated with them. But there's a lot of other options here as well.
So I won't go into a ton of detail about all of them. But the main point is that data centers can be modular and very small. They can be normal, midsized buildings. And then yes, there are those huge hyperscale AI data centers. So that whole range exists in this space. Next slide, please Claire.
The next main point I want to make is what kinds of opportunities can come with these data centers. And then also what kinds of considerations you want to be aware of if you're thinking about whether this is a good fit. Our panelists are going to expound on these. So this is just a brief overview. And all of these things really vary a lot based on data center size and design and location and all sorts of things like that.
So these do need to be considered on a case-by-case basis, but just to give you a bit of an overview. Some of the opportunities that come along, we want to start with—the first thing a lot of folks think of—revenue from leasing the land to a developer that builds and operates a data center on it. Many Tribes are really experienced in that type of business. Some have a big land base or a site that works really well for that. That's great.
But we called this webinar “Beyond Land Leases” because there are more options that might not be as obvious when it comes how to benefit from a data center. So a big one, of course, that we think about a lot in the Department of Energy is the power that's needed for a data center. They can use a lot of power. Sometimes that can be hard for a developer to access quickly. That might even impact things like local utility rates and all sorts of things like that.
So developers are often looking for a way to buy power directly to avoid those issues. And a Tribe can help with that by developing or expanding a power project and selling that power to a data center. And that can be much more lucrative than the land deal on its own. It also can be separated from a land deal if you are not siting a data center, but you do want to sell power to one. Those are separate options.
The third option is a little broader. Basically, there are a lot of infrastructure needs that come with a data center that might be helpful for a Tribe. Things like improved fiber infrastructure, distribution lines, substation upgrades, water treatment upgrades, even road construction. Some of these data center deals can come with investments in those things, especially if they're negotiated for. And so you can consider that as a way to potentially benefit from those types of deals.
And then, of course, there's the jobs aspect as well. There are construction jobs that come with that initial phase. For a really large data center that can even be thousands of those. Of course, those aren't long term, but they can be really impactful during that construction period. And then most data centers have somewhere in the range of a handful to a few dozen longer-term jobs, which do often require some specialized technical skills and can therefore be pretty lucrative. So if you're interested in taking those on, that could be worth looking into workforce as part of the strategy. I know some of our panelists will talk about that as well.
You can also look into securing an O&M contract for a data center nearby. Those are long term and can use a lot of skills that Tribal- and Native-owned businesses already have. So some various opportunities there. Now, of course, there are things that you want to take into account for whether something is a good fit. Not every data center is the right fit for every area.
First and foremost, a consideration is water. There's lots of news about water use, and it is true that hyperscale data centers can use a ton of water.Sometimes some of these are using millions of gallons a day in direct water use, which is a lot. There are caveats to that in terms of the ecosystem as a whole. One is that data center sizing, smaller data centers are going to be in a pretty different position. Ryan will talk a little bit more about that, especially.
Another is that there are different cooling technologies that really impact the water use. And so it's possible to use cooling technologies that don't use as much water. There can be trade-offs with those. There's really a lot to dig into there. So generally, you'll want to look into the options in your area so you can advocate for what makes sense in your area. I know we have a lot of questions about water, so we'll come back to that.I also want to touch on other local impacts, construction impacts, and noise. Some of these have been big community concerns or things to definitely think about like housing, sensitive areas nearby, like schools or hospitals, sensitive ecological areas. Those can also impact the siting choices here, whether a site is the right fit for a data center.
Access to a grid is a part of it as well. Even for data centers that are bringing their own power, most of them do still want to be grid connected. There are exceptions, but you want to think about transmission, access, interconnection, things like that as a potential consideration. And then similar with fiber connectivity, you can usually build out some fiber lines, but you'll want to have access to fiber in that general area for it to be cost-effective to put a data center.
So generally, if you have a site in mind or a power project in mind and you're interested in looking into this space, a really important thing to know is that data center developers are generally looking to move quite quickly, and they are running into situations already where a lot of the lowest-hanging fruit is already gone.
So if you, as a partner, are able to move quickly and provide some of those things that are needed, that access to transmission, land, power, things like that, you should know that that makes you a really desirable partner. So don't be afraid to think about what you're looking for in terms of the benefit to the Tribe if you're going into that partnership or considering that option. Next slide, please Claire.
So that was a lot of different topics. A lot of information there. We'll talk a little bit more in detail, as I mentioned. But I just want to highlight some of the things that our office, the Office of Indian Energy, can do to help. If this is raising questions for you, if you want to learn more, if you have some specific questions about what about my area, how does this apply to me, we have a lot of resources for that.
We can help you evaluate a site. We can introduce you to some partners in the data center space. We can give you lots of information, both from us and the subject matter experts across the DOE complex and the national labs. We can do early-stage technical analysis through our engineering TA program, and we also have a new legal technical assistance program that can help you think through things like regulations and deal structuring. So basically, if you are considering this and you have questions, let us know and we can see what resources we can bring to you to help. Thank you, Claire.
I will drop the information that's in the slide into the chat. So mostly it's just to say there are a lot of ways that you can reach out to us and let us know what you need. We are constantly thinking through new offerings and resources based on the feedback and questions we get. That's actually where this webinar came from. It was really driven by questions we were getting from folks. Especially when it comes to Tribal leaders, staff, and enterprises, those are where we're really basing our next steps off of. So please do feel free to come to us.
And with that, I will hand the mic over to Ken, COO of Colusa Indian Energy, to talk through his slides. Claire, I want to go to the next slide, please. Thanks. Thanks so much, Ken.
KEN AHMANN: Appreciate it. Thank you. Yeah next slide, please. And next slide. My name is Ken Ahmann, I'm the chief operating officer of Colusa Indian Energy. We are a 100% Tribally owned microgrid developer, a Section 17 corporation owned wholly by the Cachil DeHe Band of Wintun Indians of the Colusa Rancheria, which is about an hour north of Sacramento.
Got this separated into two parts. First part is really kind of history of Colusa Indian Energy. What we've done at our home microgrid, set the stage for how we have transitioned from a Tribal utility authority on reservation for this small Tribe in Northern California to a nationwide energy developer working primarily with other Tribes, but then also now with various data center clients as well. Next slide, please.
So like I said, Colusa is the only Tribally owned microgrid developer in the country. We've got decades of subject matter expertise that I will briefly explain in the following slides. Our mission is to promote Tribal economic development, Tribal member workforce mobilization, and energy independence across Indian Country. So where we started was really energy independence, focusing on community-scale power, helping Tribes do what we've done at Colusa for the last 22 years, which is supply 100% of the Tribe's power to all loads on reservation and all these assets being owned and operated by the Tribe directly.
And so using that as a model to go out into Indian Country and offer assistance to be able to use what we've done at Colusa as a template. That's where we started. What we're talking about today is really more about economic development, but they cross over in a couple of key ways, which I'll talk about shortly. Next slide, please.
A little bit about the Tribe that owns the company. It's a small Tribe of 115 members, with a total of 160 residents on reservation. Today, it's 290 acres of trust, but the Tribe has several thousand acres pending trust. The Tribe also owns nearly 16,000 acres of fee land, which is primarily used for agriculture. The Tribe owns and operates the Colusa Casino Resort, which is a modest gaming facility, powered, heated, and cooled completely by the Tribe's own cogeneration power plant. Our microgrid today has a 9.1-megawatt capacity. We've had no power interruptions in the last 14 years. Next slide, please.
This is an abridged version of a sales deck that we present to Tribes. So I will try to be less of a salesman and more of an infotainment for you. So real briefly, where we started in 2004, PG&E was averaging over 50 power interruptions per year to this little Tribe, which unfortunately is not super rare. Tribes across the country have an outage rate of 6.5 times higher than everybody else. And so instead of handing PG&E tens of millions of dollars to upgrade their own equipment, the Tribe decided to invest in their own energy sovereignty and build their own power plant. And that's when I showed up.
So 2005 is when this thing was commissioned. It was a 4-megawatt plant designed to power the bulk of the loads. We've operated this microgrid voluntarily off-grid for two decades now. And between '05 and 2012, our average annual power interruption rate fell to 3. And then the Tribe decided they'd really like that to be 0. And so we commissioned a backup power project which added a central UPS, some diesel backups. Long story short, since that moment of integration, we've had 0 power interruptions at all.
2014 we invested in some solar PV to green up our microgrid. 2018 we replaced our original engines and added two more. A key note about these engines and all engines and turbines that we supply to any project is that they're 100% hydrogen ready, meaning that you can convert to hydrogen without any significant hardware changes. We've got a lot of hydrogen projects I can talk about later if there's time.
2019 we finished our solar PV project. 2020 is—the 2020 and 2021 really the project that I'm most proud of is when we completely evicted PG&E from the entire reservation. And then '22, we had a couple of expansion projects. Next slide.
So all this led to the creation of Colusa Indian Energy officially as a for-profit Section 17 corporation in '23, with the mission of exporting these decades of microgrid expertise to any other Tribes that might be able to benefit from it, promote Tribal energy sovereignty, and try to act as some sort of a firewall between Tribes and non-Tribal entities in the energy space. Next slide, please.
A little bit about our services. We're a full turnkey EPC developing microgrids, all kinds of renewable energy projects as well. We're not just renewable. We have a lot of gas-fired generation projects as well. O&M, we can do long-term O&M, but we prioritize Tribal member workforce development with the Tribes that we're developing with so that we can train your Tribal members to operate and maintain these systems yourselves so that we can get out of your way.
We have a lot of funding options here specifically for the data center power projects. We bring all the capital with us, so we don't ever ask Tribes for any money for these projects. Tribal utility authority formation assistance. Consulting, we don't really like to consult. I think it's 1,000 to 1 consultants versus people who actually build stuff in Indian Country. But sometimes it's necessary. The rest of this is salesy. So yeah, next slide, please.
Partnerships. So this is a critical component to these data center power projects specifically is where are you going to get the equipment for this. So everybody on Earth is scrambling to try to secure the iron, the actual power generating equipment, to satisfy all of these new large loads that are coming online or in development.
And so we form some strategic global partnerships with companies like Baker Hughes in Italy, Caterpillar, Trane, Broad, Honeywell. The list is long. We—not only securing distributor-level pricing and lead times on this equipment, but we've also secured factory-level training access not just for ourselves, but for the Tribes that we're developing with. So your Tribal members can get the top-level factory training as an end user, which is not always common.
Baker Hughes specifically, Colusa has nearly $1 billion worth of gas-fired combined cycle turbines on order to deploy into these data center power projects specifically. The reason we chose Baker Hughes is because they're the only turbine on Earth that can blend between 0% and 100% hydrogen on the fly. So we want to prioritize being as environmentally conscious as possible. And I can talk a lot about how we get that hydrogen later if there's time. But anyway, yeah, I just want to point out that having access to the actual equipment is critical.
So we've got, I don't know, 30-some-odd turbines that we'll deliver end of '26, beginning of '27. If you place an order today for those turbines, they're not going to be delivered until 2029, 2030. So that market is significantly constrained on actually getting ahold of those critical pieces of equipment. Next slide.
Just to wrap up a little bit about who we are. We're a young company, but our leadership team has installed over 2,500 megawatts in over 130 countries collectively. We have a deep, deep bench of technical expertise. People who came from NASA, Lockheed Martin, Capstone microturbines. The list is long. So I was employee 1, but we have 83 salaried full-time staff across the country today. Next slide, please.
Well, I guess just to wrap it up even more, operational milestones, 22 years of operating a microgrid in voluntary island mode, completely disconnected from the grid. We power every single light switch across the entire reservation independently. Fourteen years without any power interruptions, making us a global leader in utility uptime. Next slide, please.
So now into the actual thing we're talking about, data center opportunities. Next slide, please. So where did all this start? Well, there is an unprecedented demand for electricity. It's a gold rush for a lot of people with powered land, including Tribes. The utilities transmission system nationwide is severely constrained, and data centers are coming online at an exponential rate at the same time that the entire country is trying to prioritize electrification of transportation, of almost all things.
And so the grid is many, many years behind where it should be for the actual demand that is sitting on deck. And so this opens an opportunity for lots of people, but Tribes uniquely, to be able to develop their own on-site energy assets. And that's what we do. So we're already building microgrids and developing these projects to where Tribes can generate their own power for their own communities’ needs.
But if you're able to also then generate power to attract other large energy consumers to your reservation, then it's not just a land lease. So where is the actual value for Tribes in attracting a data center to their sovereign lands? Is it just the same-old land lease that Tribes are used to, or is there more potential here?
So comparatively, you're looking at pennies versus real dollars from land lease to direct power sales, but you need to be able to provide that power. So some Tribes, not many, have access to the level of power capacity from their own utility companies or local utility companies to be able to buy low and sell higher to the data center. That's fantastic. That's probably the quickest way to make these things happen, as long as you're already in the interconnection queue, but that process in and of itself can take many years as well.
So we think that developing on-site power generating asset and then using that as a means of economic development to be able to sell that power directly to the data center or for that matter, manufacturer or cold storage or any large energy consumer directly on reservation, it offers the fastest way for Tribes to capitalize on these projects. So this slide says unprecedented power needs. Take a look at it after the presentation is complete and happy to answer any questions specifically on that.
Before I go to the next slide, HEARTH Act is mentioned here. Very critical. If you are going to attract a data center, especially hyperscaler, they're not going to want to sign a 7-year lease. They can't. In order to bring their capital to the table to be able to develop their project, they're going to need a long-term lease. So minimum 50 years, some of them are looking for 75, maybe 99. In order to be able to offer that, your Tribe needs to be HEARTH Act certified. Next slide, please.
What are microgrids? They address the power gaps without the need for transmission power. Basically, it's on-site power generation without needing the utility company and large transmission power to arrive on your reservation. Some Tribes have transmission power. The vast majority of them do not. They can operate independently or in parallel with the utility.
The key point here is you can develop an on-site power generation system much faster than most utilities are going to be able to deliver this size, this amount of electricity. So we're quoting 18 to 24 months to be able to develop at the gigawatt scale on your reservation. Whereas hopping in the interconnection queue could be 5, 10, 15 years or maybe never to be able to get that power from the utility companies. Next slide, please.
This is just a fancy infographic. You can take a look later. Next slide. Strategic advantages of Indian Country. Why Tribes are attractive. Well, the speed to permitting, hopefully, being self-permitting allows Tribes to move hopefully faster than everyone else. Being able to develop your own on-site, behind-the-meter power system, even in clean energy states. So where maybe you can't develop a large natural-gas-fired system in California at the gigawatt scale, you can on trust land.
That's not to say that want to develop a project that is intentionally dirty. All the projects that we design meet or beat the strictest air quality requirements on Earth. But being able to develop a project like that on your own ground gives you a significant advantage in key primary markets. Easy to pair data centers with solar storage, combined heat and power, district energy. Access to fiber routes, energy grids, gas markets, long-term partnerships.
Probably review this afterwards. I've been speaking for a long time. So let's go to the next slide. I want to give Ryan some space to speak. Benefits to Indian Country. This has the ability to inject potentially billions of dollars into the coffers of Tribes and real money. So if you're developing at the gigawatt scale, if you're selling a gigawatt of power on reservation directly to a large energy consumer, like a data center, you're looking at minimum $100 million a year off of those power sales.
There are some data center companies that will also offer revenue share from the data itself. So it could be even considerably higher. So the potential is phenomenal. Now, not everybody is a good candidate for gigawatt-scale power project, or will they have the ability to attract a hyperscaler to be able to consume that much power. But you could develop a data center project that's 5, 10, 50 megawatts and make significant difference in the bottom line of your Tribe. So it's not just all or nothing. There's a lot of in-between gray area here, very small operators all the way up to the hyperscalers.
Jobs. There aren't a lot of long-term jobs with data centers. There are many more long-term jobs with on-site power generation and distribution. Tribal control over energy costs. But now you have this behemoth of an energy infrastructure in your own backyard that now you can use—peel off a piece of that to power your entire community. So the actual infrastructure that's able to get developed and put in the hands of Tribes to own and operate, that's especially appealing to us. Next slide, please.
Minimum location requirements. You need some land. You need to be close to the fiber that the data centers are looking for. If you're going to develop a gas-fired system, you need to be relatively close to gas transmission. Or if you have electric transmission and available capacity, even better. Rare, but even better. If it's not natural gas, then you're going to need potentially thousands or tens of thousands of acres for solar PV and storage. Minimum 30 acres is what we're targeting for our projects. Next slide, please.
Again, typical land requirement. Well, for 400 megawatts, about 50 acres for the data center and for the power plant itself. Next slide. That's the end of my presentation. I just want to quickly reiterate Tribes should not be paying for any of this. So if we're bringing an offtaker to the table, whether it's Google or some mid-tier startup, they provide all the capital for their own infrastructure. And when they sign the PPA with the Tribe that's bankable to be able to go get the capital to build the energy project.
Zero dollars should come out of the Tribes' hands for any of these. So if you're dealing with people who are coming to you saying, we need $100 million from the Tribe and we'll get you a data center power project. Run the other way as quickly as humanly possible. Anyway, I'll stop talking here and let Ryan take over and happy to answer any questions after everybody's done. Thank you.
ELISAH VANDENBUSSCHE: Thanks, Ken. Go ahead, Ryan.
RYAN BROOKS: Hey. Thanks, Ken. I think you're going to see a lot of the same things, just from a different perspective. So appreciate what Colusa is doing. A little introduction for me. My name is Ryan Brooks. I'm very fortunate to be with a company called Data Holdings. I'm the general manager and CTO here. I'm thankful to be able to talk about this today. This is a topic that I care about.
I'm really here to tell a story. So what we've been doing over the last 15 years or so as a data center, and I think it will answer some of the questions that were submitted prior to this presentation. And any other ones that come up, feel free to reach out. I will share my email on the last slide here as well.
Thanks also to the DOE folks. We're setting this up. Like I said, this is an important topic. I'm passionate about doing business like this that is in a manner that's not exploitative of people or the land or environment. And I think that the story I'll tell today will talk a little bit about how the Tribe here has done that. So next slide, please. Next slide.So who we are. We're a data center called Data Holdings. We're a subsidiary of a company called Potawatomi Ventures, which is the business development or business diversification arm of the Forest County Potawatomi here in Wisconsin. We're 100% Tribally owned. And something very unique about this is that we're located both in an urban center and on trust land. We're in the near west side of Milwaukee, so I think it's a very urban area and the Tribe owns a nice chunk of land here.
The business here with Data Holdings is that we're a public or, like the DOE slide, we're a colocation data center. So we're not a hyperscale data center. We have multiple tenants, multiple users where we're competing out in the commercial market for that business. And we were commissioned or turned on for the very first time about 13 years ago. And I want to—I've been here about 4 years, and the credit should go to the Tribe here for making a lot of decisions prior to my time here, prior to other people's times here, that made us have 13 years of uptime. So we have a similar track record of zero outages that Colusa talked about.
The entire impetus for the data center here was that the Tribe took ownership of otherwise unused area of land that was a university campus. It was part of a larger deal. The state of Wisconsin wanted someone with the resources that could really uplift the whole area and make investments. And that's certainly what the Forest County Potawatomi has done here.
I'm here, again, to tell this story and to share some of both the mistakes and the learnings that we've had along the ways. But the message I want to give you is that the data center business here has been successful. We've been profitable for a long time and we're producing a very good return on investment for the Tribe here. So next slide.
So we're a public data center. We're built for enterprise. As I said, that means not hyperscale. When we first started, really the type of customers that we were looking for were very large enterprise. Someone who could rent what we consider a suite, a significant portion of the data center, and then have a few tenants in the data center, each paying us like they'd pay a landlord. Imagine a big white box of a room with a lot of computer cabinets, a lot of computer equipment, that's where we started.
Since that time, we've also expanded offerings down to an individual server cabinet. Even people can move in and consume resources here on a virtual basis. So it might even be someone that we don't meet. We continue to operate this way today. The operation of the data center is completely in-house now. So when it was first commissioned, the O&M was done externally, even sales was done externally and we've brought that in.
So this is another learning for us. When the data center was outsourced, that decreased margins and they just didn't have the same incentives and philosophy that the Tribe had. And bringing things in-house, running the business ourselves, improve the business and yield a better product for our customers as well.
Again, we're not one of these hyperscale or cloud data centers. We're not hundreds of megawatts. We're designed and built to uplift businesses in the area, existing organizations, governments. So not unlike other investments that a Tribe might make in the area, sponsorships, things like that. The data center has largely been a wonderful gift to the region. It's in my backyard. I like working here. And it's improved the performance of just business that we go out and compete for on a level playing field on a day-to-day basis.
So we're 50,000 square feet. We have room in our urban location to double this. Another thing that we do is we do twice yearly audits with a third party. This is part of our value proposition here. And this is also a learning. The audits say that we're operating the data center like we should be. And then we share that information with our customers, and that helps them with their compliance and governance requirements versus just doing it themselves.
As Ken mentioned, data centers don't have a lot of long-term jobs. We're seven people here at the data center on a day-to-day basis that supports the data center 24 by 7. That's the core operations team and sales. So small group of people. That being said, we get support from what I call our mothership Potawatomi Ventures for things like HR, legal, marketing, things like that. And we have campus security also that patrols and, again, help uplift the area. But the message I tell people is the amount of revenue per person here is something that you'd see akin to an Apple or Nvidia or someone like that. So next slide, please.
Since we're talking about energy, a little bit of information about Data Holdings here. We're a 17-megawatt site. We buy that energy from our local producer, who is We Energies. And we buy that at what's called primary rate. What that means is we're receiving high voltage or what Ken would call medium voltage, many kilovolts. And then we're stepping that down to 480 volts on premises and we maintain the transformers.
What that means is that we have a very low cost per kilowatt-hour. And combining that with the fact that we're on trust land, so no taxes and also the investments initially made by the Tribe to make this all sustainable, we have some of the lowest possible costs in the area per kilowatt-hour, which then means ultimately commercially that we have a premium product at a very low cost. And that's why we've had success in the market.
The power is supported by 6 UPS systems or uninterruptible power systems. We use diesel backup generators. Again, no tax helps here as well. And another learning I wanted to share was one of our early customers—we don't often talk about our customers because people don't want other folks to know where they are for critical infrastructure.
But the state of Wisconsin was an early win here. And so the state of Wisconsin has quite a bit of their IT load here in our data center. And what that means is we get priority refueling. So although we have a very large amount of diesel on-site, we get fuel refilled very early in the process. Not long after the military and National Guard, we can get a refill. So we can run indefinitely on diesel. Let's see. Next slide, please.
So it's a lot of power, at least from my perspective. Ken deals with some bigger numbers. But we do operate the data center in what I would consider an ethical way that is compatible and both supportive of the Tribe's philosophy. One thing, we're here in Wisconsin, it's cold. Although I did see there was a guy in shorts, got above 20 degrees here. So you see some weird folks in shorts at times. But the message here is that half the year it's cool in Milwaukee and we get free cooling as a result versus something built in a more warm climate.
The Tribe was not mandated to do this, but they invested in free cooling. So meaning for 50% of the time, we're not paying to reject heat or we're not paying much anyway to reject heat out of the building. So that's a big thing. That was not mandated by law or code or anything else at the time. That was something they decided, hey, we're going to spend more money now. It turns out it's a sustainable decision and it also means our costs are lower in the long term.
Another thing, the building was purpose-built. It's never wise to try to convert an existing building, in my opinion, to a data center. This building is a bunker and that's part of our value proposition. Again, we're going to stay online regardless of any sort of environmental issue, civil unrest, pandemic, anything else.
We used many recycled materials when we built the building. Floor heights or distance from floor to ceiling is very high, so we can have very large plenums to move air and that chilled water around. And that all yields a very low what's called a power use efficiency, or PUE number. Meaning when we use a lot of energy, it doesn't take us very much to move that heat back out of the building, again, because of the investments that the Tribe made and the decisions they made.
This resulted in a LEED Gold rating for the building. That is very unusual for a data center. It makes me feel good that we're not like a hyperscaler that is just burning energy to get market share and maybe some payback many, many years from now. We're providing money back to the Tribe on a day-to-day basis.
The other thing that's important and everyone's brought this up for me, water usage. I think it's very valid for local folks to be asking about water usage of data centers that are coming into all sorts of places that haven't had data centers before. The Tribe chose here, the Forest County Potawatomi chose to use no municipal water, except for sink and toilet, just domestic type things.
We have a closed-loop system, a truly closed-loop system. We're recirculating the same water and we're using mechanical chilling to reject that heat. And we still have a very low PUE. So we're not damaging the water resource here in the area to have a data center. And again, anytime it's below 40 degrees here, free cooling. So a really great investment in decision made by Tribal leaders on day one.
The other thing is you have to measure all of this. So a learning for us was make sure that the building is heavily sensored, meaning that we have tons and tons of data points throughout the building that we can draw on to see if we're making the right decisions. Otherwise, we're just guessing and making assumptions. And we've continued to add sensoring for everything you can imagine. There's about 10,000 data points that we get from the operation of the building that tells us if we're doing the right thing and makes us able to prove that we're taking good care of the environment as we operate the business. Next slide, please.
So some more learnings I want to mention is I consider it like operating anything that's critical, probably like a power plant or flying a plane. A data center is something where you want everything operationalized, meaning measure, like I just spoke about, use automation to run the data center. Do only things that are reproducible.
We write processes and procedures that tolerate human error. Assume that humans will make mistakes in your operation, plan for it. And when they do, don't be punitive about it. Be transparent. And I think this and some of the other things I've talked about have a really been large contributors to our 100% uptime record so far.
Another thing I'd say don't let a large company come in and just use your land and take away all the margins. There's a rule here that I call moving up the stack. If you're just doing a land lease—and Ken spoke about this too—you might make pennies on the dollar.
As you move closer to the actual source of revenue for the data center, you'll get a larger share of that revenue. And as I said, we're now doing virtual services here. We are our own internet service provider in the building that provides a highly available internet that keeps people connected. And as you bring on those other services, your margin increases.
Now, you don't want to necessarily compete with folks. No one's going to compete with a Google or Microsoft really at this point. But my point here is don't just let a third party in to exploit your land and then you receive the lowest margin. Move up the stack from that physical layer. It's getting closer and closer to the application and the customer. At Data Holdings, we actually purchased infrastructure as a service provider a long way to help with this effort.
Another thing that we've learned as we've gotten closer to customers is to find partners, managed service providers, telecommunication carriers to the point about fiber, and other tech organizations can be the source of deals if you're going after multi-tenancy play and colocation play. The well-designed and -built data center that you made will help their business and they can bring customers to use, their investment can be used—or your investment can be used to increase their business, which is a rising tide for everyone.
Another thing I want to mention, a data center becomes a very important part of local infrastructure, and you need to keep this in mind. As I said, in the case of Data Holdings here in Milwaukee, it's become an extremely important part of the local infrastructure. There is a huge amount of business and transactions that take place within the four walls here.
It took us—it was a long—it's a long trip. It took us 10 years to get the internet exchange, a peering point for the internet, to move from a building that was over 100 years old in downtown Milwaukee. The reason it was there was it was an old telegraph center. So the first telegraphs landed there, and it was sort of an incumbent center for connecting networks. Well, through our good service and good performance and partnership with customers, we've had the Milwaukee Internet Exchange move into our facility. So again, it ties into the community there. Next slide, please.
So some more things I'd like to pass along. I hope that Tribes consider this a business and not just a transaction. This is a long-term recurring revenue source. And I would love Tribes, as the Forest County Potawatomi had done with Data Holdings, consider this a revenue source and also a really big opportunity. There were, yes, construction jobs. The Tribe has a construction management company called Greenfire that managed to build.
There are operational jobs. There's not a ton. There's IT sector work. You can support startups with your data center. There's education, training, obviously lots of trades. This also means you can use the data center yourself. One thing that always bothers me a bit is when a Tribe goes out and uses something—non-Tribal lands for their data and applications. We have a number of Tribal governments in our data center. We have some Tribal health care organizations.
And I think there's something to be said around data sovereignty here that, hey, we're on Tribal land. We're on trust land. That's also where your data should be so it's not exploited by a third party. And that's been a selling point for us as well.
Another thing that I'll mention that Ken mentioned as well, be wary of some of these large deals. When we've had hyperscalers come, we do do some limited AI here. What we've seen is that there are lots of brokers out in the market. They insert themselves into deals. And the thing is you'll often hear—we've had this happen—you'll hear about the same deal slightly differently from two different people. You think it's two deals. You think there's more opportunity than there is. They're actually the same one. So do your research, especially when there's a broker involved, I would say.
This is a long play. It took Data Holdings quite a while to figure out how to enjoy a greater and greater margin year over year, but these revenue sources are long term. When you get an organization to move in and become a customer of your data center, again, whether that's virtual or physical, they're unlikely to move. We called it a very sticky relationship, and folks will stay with you. And it's low turnover, it's predictable.
Last thing I'll mention here as a bullet point is stick to your values. I think here a big part of our success is that the philosophy and the ethics, looking at things from a seven-generation view, the environmental stewardship is so core to Tribal philosophy. It can be expressed in a data center, especially the data centers owned and operated and continues to be so by the Tribe. Ultimately, it's a better product as a result. And that's what I want the message to be from my talk today. Next slide, please.
Here is my contact info. The URL there, dataholdings.com, we actually have a tour of the data center that you can see on the site. And I want to encourage you to feel free to send me an email. That's my email. Ask any questions if you're concerned about a deal. We're not playing in the space. I want to see more Tribally owned data centers because it means more data sovereignty. It means more partnerships out there. We're serving a region, but there's not a lot of this going on elsewhere. So feel free to reach out.
I'll also be—we have a booth at RES, which is coming up and not too long. Stop on by. I'll be there. But thanks again. Thanks again to the DOE team. Thanks again to Ken for this. Appreciate it.
ELISAH VANDENBUSSCHE: Thank you both. Yes. Let's get right to questions. I know we have a ton of questions, and we can probably stop the slide share. Thank you so much for doing that, Claire. We'll try and rapid fire a few of these. Thanks so much to some of the folks who have been replying to the questions already in the chat. So please do check those out if you're not seeing them. We will take note of those and disseminate them.
A couple of questions around life expectancy as it relates to data centers. Do they have a life expectancy, require upgrades or maintenance that might increase the impact? Longevity in terms of the value of the investment, concerns from community about an AI bubble. In that general space, can you talk a little bit about that?
RYAN BROOKS: Sure. Ken will have something to say here as well. It's likely that we are in some form of a bubble. However, that's why I wanted to make some of this talk about a more traditional data center. Longevity of equipment, it has a huge deal about how to understand and appreciate this thing. We do a ton of maintenance, and that maintenance schedule really determines the lifetime. More so, Ken mentioned this when he was talking about turbines, it's very hard to get in line for some of these things. We have over 1 year lead time on things like breakers for some of our equipment.
So data centers tend to last long. Right now they're appreciating in value. They're not depreciating. So you do have to keep that in mind. And you mentioned this also your ability to move and execute on a new data center, the time to market is probably the most valuable piece. You both brought that up. Ken, I'll go over to you for comment on the power side.
KEN AHMANN: Yeah, sure. Well, completely agree with everything you just said, I think. I'm not the data center guy, but from what I've learned, dealing with these offtakers for a while now is that the shells themselves, the buildings, it's now much different than a typical commercial building. So the life expectancy of that or the maintenance requirements of that aren't that much different than what you're used to. It's the equipment inside of this data center.
And oftentimes every few years, this equipment can get cycled out for whatever the latest and greatest is. So I think insisting that e-waste, significant amount of e-waste is being handled and disposed of in a way that aligns with your Tribe's values is critical to set that precedent in writing to begin with. So hopefully that addresses the question.
ELISAH VANDENBUSSCHE: Absolutely. Thank you. We've also got—I'm kind of bundling questions here to try to get to as many as possible, a bunch about the impact of a Tribe's location, land base, capacity to take on things like utility projects, questions from Tribes in remote areas. I saw you started to address there, Ken. So do you want to talk a little bit more about the impact of those specific requirements and as they relate to the specific Tribes?
KEN AHMANN: Yeah, I can start there anyway. Even the biggest offtakers in the world have abandoned their primary markets. They're out in the secondary markets, in the tertiary markets because they are desperately panning for the gold of powered land. Now, being adjacent to long-haul or dark fiber sure helps. But where it doesn't exist, there are other options. Being adjacent to transmission gas and/or power, critical. You have to be able to either—you have to be able to provide the power to these guys one way or another.
So we have overlaid basically all of this infrastructure, these infrastructure maps across the entire country. And then looked at where Tribes are located within the points of interconnection and identified several dozen Tribes that right out of the gate are excellent candidates for these projects. And then along the way, we have been surprised by several other dozen Tribes that offtakers are more than happy to develop with.
So just because you're rural, for one offtaker that may be a real bad, negative thing. But for another offtaker, that may be a benefit, a positive for them. So hopefully, yeah, I don't know if that answers that question or not. But Ryan, do you have anything to add to that?
RYAN BROOKS: I come from a telecommunications background, and I wouldn't say that fiber access is a deal killer any longer because people are just building their own fiber, because you're in those secondary markets or more or less, I should say, people are often building fiber. So the power, the space, time to market are all important. If it's a hyperscale and they're doing training, you don't need a ton of bandwidth anyway.
If it's colocation and you're serving enterprise, then it needs to be well connected and that's a little bit different. But I've seen Tribes bring up their own businesses putting fiber in the ground. And I think it's great because then they end up also wiring the reservation and bringing better quality internet to someplace that didn't have it in the first place.
ELISAH VANDENBUSSCHE: Awesome. I know we're coming right up on time here, so maybe I'll bundle one more question and I'll also ask you to share one key takeaway that you'd like folks to come away from today with. And then we'll also ask you to weigh in on what partnerships might be helpful for Tribes to leverage as they're starting to think about these opportunities. It's a twofer.
RYAN BROOKS: I would say the understanding the local market, if it's a local place or if it's a data center in one of your first three categories, you do need some knowledge of that market that you're trying to address. And maybe it's a regional thing and a geographic play. Maybe it's a vertical that you're going after like health care or if it's AI.
I do hope that Tribes aren't taken advantage of in this process because it's a bit of a gold rush. There's a way to move forward cautiously. And if it's a quick, hey, you're going to make a ton of money thing, it's not. I want to be clear about that. This requires some thoughtfulness. And if you stick to your ethics and the core values of your Tribe, you're going to be OK.
KEN AHMANN: I agree with that. I think the only addition I would make is you—I think this is a moment in time. This is a window that is going to close. I think there's a good 10-year window out in front of us, runway. And after that, a lot of these holes are going to be filled by the utilities. SMRs are going to be driven online all across the country, I think.
And not to say that Tribes couldn't benefit from that as well, but the last comment was agreed, a lot of actors in this industry. That's exactly it. Yeah. And I think I've met all of them along the way. There are a lot of tire kickers and a lot of people trying to be experts in this space, either on the data side or on the power side. And that just comes—I mean, it happens all the time with any type of gold rush like this.
But it's not going to last forever. Speed to market is really the Tribes' critical advantage here and the ability to develop their own power assets or lever the access to the utility power that they already have. Being self-permitting, self-regulating, and doing all of this in a way that, like Ryan said, isn't sacrificing the Tribe's core values. All of this can be aligned. And I think just finding the right partner is hard in this space and it seems to be getting harder every day.
And so as Colusa, we're doing our absolute best to be that right partner. And we do our—well, this is another important point is that for just the site diligence, there are people operating in this space that are charging six, even seven figures to consult to do what we're doing for Tribes for free. And not to be just a complete sales pitch here—and there are other good actors in this space, a lot of good actors in this space.
But there are so many bad actors in this space that—definitely do your homework, do your diligence, don't sign anything without high-quality legal representation, of course. And don't fork over sovereignty if you don't have to. There's a lot of ways to navigate this process where everybody wins. Just be really cautious in who you're dealing with I think is my major takeaway.
ELISAH VANDENBUSSCHE: All right. Now we're out of time. We have so many more questions. As I said, we're saving these and we'll continue to put out resources, make use of our technical assistance and all of our resources at the Office of Indian Energy. And we're also happy to connect you with these folks. You saw some emails on the slides and that sort of thing. So please do make use of your resources to do that homework as Ken and Ryan both pointed out.
With that, we'll let you all get back to your day. And thank you all so much for taking the time today and good luck with everything and let us know how we can help.
RYAN BROOKS: Thank you.