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Revolutionary data center planned for Pueblo

Posted at 8:18 PM, May 08, 2019
and last updated 2019-05-09 12:59:32-04

PUEBLO – Executives with a high tech start-up from Denver plan to build a $100 million data center in Pueblo as long state officials approve of an incentive package offered by Black Hills Energy to sell them discounted electricity. The CEO of AX 2 (pronounced A-X squared) says the facility will be the first of its kind because it will use liquid immersion cooling systems to boost capacity.

Alax von Hell is a civil and electrical engineer with a background building and designing corporate data centers. She calls Pueblo a “perfect location” for her new facility.

“They’ve got the robust fiber network which is very important,” she says. “We’re able to get our energy prices down to where we needed them to be.”

Denver start-up AX2 has ambitious plans to build a first-of-its-kind data center in Pueblo

Data centers are like warehouses for computer servers. In our modern internet-connected world, there is a growing demand for facilities that can securely process and store large quantities of digital files.

Traditional data centers contain multiple rows of rack-mounted computer hard drives which consume large amounts of electricity and generate large amounts of heat. Sophisticated heating and cooling systems are necessary to keep all the computers all running at optimal temperatures.

Von Hell’s liquid immersion design would dunk all of those racks in a specially engineered non-toxic liquid. She says the concept has been proven on a smaller scale. She successfully tested it using antiquated (and inefficient) servers from a cryptocurrency mining company.

“We’ve since been able to work with some of the very large computer manufacturers to warranty their servers for use in this fluid because the fluid doesn’t damage it, it actually prolongs the life of the servers,” she says.

That efficiency will allow her to install three to four times the number of servers in each rack compared to traditional designs. Von Hell says the data center will serve multiple clients for a variety of high-density applications ranging from blockchain to artificial intelligence, to gaming, and even super-computing.

The facility will still be power hungry. It’s estimated to need approximately 50 megawatts of electricity.

Steve Andrews of the advocacy group Pueblo’s Energy Future says that level of demand is about one-eighth of Black Hills Energy’s total production capacity. He suspects the utility company will need to buy electricity from the grid in order to supply AX2.

“When they purchase that power on the wholesale market, they can get it at a bit of a discount,” he says.

“In fact, it’s a substantial discount compared to what they charge customers currently in their own service territory.”

His group is leading the effort to convince City Hall to cut ties with Black Hills Energy in favor of creating a municipally owned utility. He thinks this incentive highlights the inequity of electric rates paid by customers here.

“We hope it succeeds, but we have some doubts,” he says.

The development is a bit of risk for Pueblo. Von Hell admits that many companies are, “reluctant to go large scale on this”  because it is a new design and building methods for traditional data centers have shorter construction times.

At a Public Utilities Commission hearing on April 2, Administrative Law Judge Robert Garvey pressed Black Hills Energy CEO Vance Crocker for information about the company. Crocker had to admit he didn’t know how many employees worked their Denver headquarters.

A Linked page lists just von Hell and Braeden Criddle as the current employees. Criddle’s profile indicates he is the CEO of a Calgary-based company named Crypto Resources Inc.

The PUC commissioners voted 2-to-1 on April 25 to give preliminary approval to Black Hills for expedited processing of the electricity discount, formally called an Economic Development Rate Tariff. A final written decision is expected later this month.

Von Hell expects to hire around 40 employees to work at the data center with an average salary of roughly $50,000. She wants to open the facility later in 2019 and says AX2 could hire up to 80 employees if they are able to expand and build a second facility at a later date.

UPDATE: Von Hell says, “Braeden Criddle is not associated with this build and is not an employee of AX2.”