Core Scientific has broken ground on the next phase of its cryptocurrency data center near Denton Municipal Electric’s Jim Christal Substation.
Three data halls and one technology building totaling 140,400 square feet are under construction on a portion of the crypto mining company’s leased 31 acres, according to a commercial building application submitted to Denton’s Department of Development Services. Records of building permits issued in March show the site would also include a guard station.
The build was valued at $37.4 million on the initial commercial application filed by contractor Hill & Wilkinson in November 2021, but the permits issued in March list the cost as $16.4 million.
The Denton City Council passed an ordinance approving a seven-year lease and a power purchase agreement with Core Scientific in August 2021. Though financial details of the deal were not made public, the city could earn up to $4 million per year from sales tax and franchise fees, while DME is expected to earn up to an additional $8 million in unspecified fees. The revenue will help keep rates stable for utility customers following debt the city incurred after the February freeze, city officials say.
The crypto center has been operating since February of this year, though public records show the facility’s capacity was just 22 megawatts, a fraction of the projected 300 megawatts the company expects to operate at by the end of 2022. The city council in March also authorized a five-year agreement allowing the company to use Denton’s dark fiber internet facilities.
The site is expected to use as much electricity as DME itself already sells, doubling usage. During initial consideration of the deal, city council members questioned the environmental impact of the proposed center, but city staff said the plant’s predictable usage would add to the electrical grid’s stability and it could shut down during times of high statewide grid usage.
Core Scientific operates data centers in Georgia, North Carolina, Kentucky and North Dakota, and is currently developing another center in Oklahoma. The company’s revenue was estimated between $515 and $545 million in 2021, according to February filings submitted to the Securities and Exchange Commission.