ELLENDALE, N.D. — Don Flaherty admits the future of his hometown keeps him up at night. The mayor of Ellendale has spent four years watching Dallas-based Applied Digital transform the prairie community into one of the Upper Midwest’s fastest-growing data center hubs — a change that brings both opportunity and uncertainty.
If the industry falters, he knows the consequences could be severe.
“Could it blow up in my face?” Flaherty said. “Absolutely.”
Yet, for now, optimism outweighs fear.
“I have faith we’re on the right track,” he added, predicting the town of roughly 1,100 could add 500 to 700 residents as the campus expands to three facilities and as many as 350 permanent jobs. The project represents an estimated $5 billion investment and an energy demand of up to 530 megawatts.
Applied Digital chose Ellendale in 2021 because of its proximity to a substation collecting electricity from regional wind farms. The first facility hired 35 workers, a major boost for a community that had been steadily shrinking. Expansion plans soon followed.
A center running at 530 megawatts nearly around the clock would use as much electricity as about 370,000 South Dakota homes, according to Public Utilities Commission analyst Darren Kearney.
To prepare, North Dakota helped finance 20 new homes through a partnership involving the company and a private developer. Additional builders have purchased land, anticipating further demand. Flaherty said Applied Digital’s annexation into the city has “nearly doubles” the local tax base.
Electric customers have even seen savings. Because large users increase utility revenue, Montana-Dakota Utilities has issued bill credits known as transmission riders.
Electrical rates have remained steady, and “there is ‘more than enough power in our area to absorb what they’re taking,’” Flaherty said.
North Dakota customers received $7.6 million in credits in 2023, $9.8 million in 2024 and $7.4 million in 2025, along with $13 million more through fuel-related adjustments. The average customer saved about $70 last year.
Applied Digital vice president Nick Phillips said the company is currently using 312 megawatts of its planned capacity and expects benefits to grow.
“Because we’re located where the power is generated, we’re consuming power that wouldn’t have been consumed otherwise,” Phillips said. “We’re generating more revenue for the utility, causing us to pay parts of the transmission fees, costs and overhead fees.”
Regional impacts are already visible. More than 1,000 construction workers are living temporarily in nearby Aberdeen, boosting hotel and restaurant sales, said economic development leader Mike Bockorny.
Not everyone is celebrating. Former resident and property manager Jamie Walker said rents have skyrocketed since construction began.
She watched one-bedroom apartments climb from about $600 a month to more than $1,200.
“The regular Ellendale local is not winning as big as, say, Casey’s or Cenex or the local bars,” Walker said. “The money from this is going to be very short-term and one-sided.”
Some families have left town because they can no longer afford housing, she said, even as businesses enjoy new customers.
Flaherty acknowledges concerns about traffic, daycare access and noise from the first air-cooled facility, which emits a low hum on the edge of town. The next two centers will be water-cooled using a closed-loop system expected to be quieter and to use only about “one household’s worth of water,” Phillips said.
Despite the headaches, the mayor remains convinced.
“Even though some things are a headache, I can see how they’ll benefit our community ultimately,” Flaherty said. “The growth will help us survive so we’ll be a thriving community well into the next century.”
Ellendale’s experience is shaping debate across the border. South Dakota has only one major facility — a 30-megawatt site near Onida — but multiple proposals are emerging.
Applied Digital hopes to build a 430-megawatt campus in Deuel County near Toronto, a project that could bring 250 jobs and more than $10 million a year in state sales taxes. The company has not yet purchased land and is waiting on a potential sales-tax exemption from the Legislature.
“They’re not going to roll into Deuel County, invest $5 billion and walk away in three or four years,” said Rep. Kent Roe. “I think we need to pull the future to us.”
Phillips said the company is exploring housing that could serve construction workers first and later be converted for seniors.
“Construction workers and seniors kind of need the same thing: relatively small living quarters with community spaces,” he said. “Perhaps there’s a way for us and the county to work together.”
Other developments are advancing in Sioux Falls and Madison, while Lincoln County is considering a one-year moratorium to study impacts.
For towns like Ellendale, the experiment is already underway — a test of whether the digital economy can revive rural America without leaving longtime residents behind.
Originally reported by KVRR Staff in KVRR.
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