After Peabody Energy hinted last month that its future in Wyoming could be building power plants to fuel data centers, the nation’s largest coal producer has put a price and location on its plan to pair Powder River Basin coal with data centers.
The company is offering Campbell County $13 million for the 5,289-acre Spaeth Ranch just southeast of Gillette and near the 1,100-acre Cam-plex campus, where it would build a power plant and develop two data centers.
Kat Halverson, a 48-year resident of Gillette who lives close to the ranch, attended Wednesday's county commission meeting expecting to oppose putting data centers near her property.
She came out of the meeting with a changed mind.
“I was afraid when this place came up for sale that somebody was going to come in with one of those giant hyperscale data centers,” Halverson said. “That’s why I went to the meeting, because I wanted to see what the proposals were.”
After hearing all three proposals, Halverson said she wouldn’t mind having Peabody’s planned site as a neighbor and believes it would be a great benefit to the county.
“Peabody has been around here for 50 years,” Halverson said. “They are a good company and they have a good plan for that area.”
‘Proof Of Concept'
Peabody’s Spaeth Ranch offer follows 18 months of work on a plan to build mine-mouth coal generation and the power demand to go with it in the Powder River Basin, Patrick Forkin, the company’s executive vice president of global strategy and development, told Campbell County commissioners in a Nov. 2 letter.
“The successful development of the Peabody Energy & Technology Park would be a valuable ‘proof of concept’ to begin to realize this vision,” Forkin said in the letter.
Peabody’s proposal calls for building the tech park on the eastern part of the ranch, with advanced manufacturing, data centers and other industrial users.
The western side would hold homes, workforce housing and about 775 acres of green space dedicated to the county. The company estimates the park would bring more than $2.5 billion in capital investment.
Two other companies, Central Southwest Texas Development and Range Sustain Grange, also submitted proposals to the county for the property, and all three involve some aspect of data center development.
Two Data Centers
Though Peabody’s plans includes two data centers, Halverson said she thinks they have been placed thoughtfully, with open land between them and the neighborhoods nearby.
“They’ve got a huge greenspace and parkland slated for the area that’s near where my house is,” Halverson said. “I thought that would be great as a buffer zone between the residential area and whatever they’re going to build.”
The proposal does not say how many homes would be built, but the company estimates every 100 homes would add about $34 million in residential value to the local tax base and generate roughly $202,000 a year in property taxes.
Halverson said she sees a second benefit in the housing, since homes built alongside the data centers could help keep out the noise and pollution that so often worry nearby residents.
“I can’t believe that Peabody would build 100 houses right next to a giant, noisy data center,” Halverson said. “Nobody’s going to want to live there if it’s obnoxious noise and pollution.”
‘Win-Win’
Halverson said the part of Peabody’s proposal that turns Powder River Basin coal into power for customers in Campbell County is something she has been waiting decades to see.
“I’ve always thought that these mines should have had a power plant built next to them so they could burn their own coal and ship the electricity out,” Halverson said.
In the proposal, Peabody said the park would initially get electricity from Powder River Energy Corp. Mine-mouth generation at the company’s existing mines would follow, with the power carried to the ranch over two transmission corridors.
Peabody estimated one plant would burn 1.3 million to 1.5 million tons of coal a year, in a basin where production has fallen by more than half since 2008.
Pairing mine-mouth power with data center demand is a new idea for the Powder River Basin’s coal industry.
Travis Deti, executive director of the Wyoming Mining Association, said the concept is not only realistic, but could open a new chapter for the region’s coal.
“It would be a new use for that coal resource up there,” Deti told Cowboy State Daily. “It really looks to be a win-win.”
Deti said generating power near the mines would cut out the need to haul coal away by rail, and it could also open the door to building newer plants.
“What remains to be seen, but what I think would probably look different is the type of generating facility,” Deti said. “I think there’s an opportunity to build a state-of-the-art generating facility.”
‘Questions That Need To Be Answered’
The Peabody Energy & Technology Park is far from a done deal, Campbell County Commissioner Scott Clem told Cowboy State Daily.
“Any future activity will have it’s own process,” Clem said. “It’ll have to go through zoning. There will have to be a lot of scrutiny and questions that need to be answered.”
In addition to Peabody’s offer, commissioners will consider two other proposals for the ranch.
Central Southwest Texas Development, an Austin-based company, offered $15 million for a technology energy park that would include a data center campus, power generation and battery storage, along with industrial land and sites for a fire station and community park.
Range Sustain Grange, an early-stage Gillette company, offered $10.5 million and proposed keeping the ranch in cattle production while adding a small data center that would start with Bitcoin mining. The proposal does not claim to have financing secured.
Peabody’s $13 million offer falls between the other two, and all three top the $10 million the county paid for the ranch.
While all three proposals involve data centers, Clem said that all three ideas are very different and that the county was open to any proposal that used the land for some sort of economic development.
“We did not solicit any particular project or even any particular use for the property,” Clem said. “This was open to anyone and everyone.”
A public hearing on Nov. 18 will give residents a chance to question each bidder. At their Dec. 2 meeting, commissioners will then ask the chosen bidder to enter into a real estate purchase agreement.
Emma Jane Jackson can be reached at emma@cowboystatedaily.com.
