Microsoft Considering Iowa Data Center

Microsoft (MSFT) is considering a major data center project in Iowa, and state lawmakers are scrambling to fast-track tax breaks similar to the ones that lured Google to pick Council Bluffs for a $600 million data center last year.

"We are exploring the possibility of placing a data center in Iowa, as we are other states, but have not made any final decisions at this time," Microsoft spokeswoman Stacy Drake McCredy told The Des Moines Register today.

Des Moines Mayor Frank Cownie said he "was aware early this afternoon of the possibility that Microsoft would locate in Des Moines." Other state lawmakers were unsure which locations were being considered. It wasn't clear which other cities or states are under consideration for the Microsoft project.

Microsoft is in the midst of a major Microsoft's expansion of its Internet infrastructure as it battles Google (GOOG) and other major competitors in web-based services. In November the company announced a pair of $500 million data center projects, one in Northlake, Illinois and another in Dublin, Ireland. Microsoft has already completed a huge new data center in Quincy, Washington and is working on a facility in San Antonio, Texas.

Microsoft has developed a "heat map" of favored data center sites based on its analysis of 30 criteria. One of the most important is the cost of power and availability of renewable energy.

The Des Moines area is served by MidAmerican Energy, the same utility that supports Google's data center in Council Bluffs. MidAmerican has one of the largest wind power generation programs of any utility in the country. MidAmerican operates 323 wind turbines at three sites in Iowa, providing the capacity to generate 459.5 megawatts of electricity, enough to power approximately 144,000 homes. The utility recently sought approval to expand its wind generation capacity by another 540 megawatts.

Lawmakers in Iowa are trying to fast-track a set of tax breaks for Microsoft through the Iowa House, the Register reported, and similar action could follow in the Iowa Senate next week. The legislation would reportedly offer state sales and use tax exemptions on purchases of equipment and electricity necessary for use in a Web portal business with an investment of at least $200 million in Iowa.

Last June Google announced plans to build a $600 million data center in Council Bluffs. In November the company purchased an additional 1,000 acres of land in the area for possible further expansion of the project.

TechHermit and John Rath, who both track data center news in Iowa, also have coverage of the Microsoft reports.