WA wants to help keep electricity prices from rising
Washington's Utilities and Transportation Commission is developing guidelines for data centers' electricity use to prevent increased costs for other customers, following a failed legislative bill. This effort comes amidst widespread concerns about data centers straining the electrical grid and driving up energy prices, with several local jurisdictions in Washington having already enacted temporary moratoriums. The guidelines will address rates, contracts, and potentially influence future state legislation, with tech giants like Amazon and Microsoft participating in the debate.
After a state bill regulating data centers' electricity use failed, Washington's Utilities and Transportation Commission (UTC) has taken up the task of drafting guidelines. The UTC aims to ensure that large power users, particularly AI data centers, do not burden other customers with increased costs or risks associated with their massive electricity consumption. These guidelines will inform the UTC's expectations for rates and contracts that investor-owned utilities present for approval and may influence future state legislation.
The regulatory discussions are unfolding amid growing concerns across Washington regarding data centers' potential strain on the electrical grid. Several local areas, including Seattle, Spokane, Renton, Burien, Federal Way, Marysville, Moses Lake, and Skagit and Snohomish counties, have already implemented temporary moratoriums on large data centers. The article notes that data center demand has already driven up capacity costs significantly in regions like Northern Virginia, a major data center hub, according to Joseph Bowring of Monitoring Analytics for PJM.
During a recent UTC workshop, various stakeholders including utilities, tech companies, consumer advocates, and environmental groups debated proposals such as requiring data centers to cut power during shortages, pay surcharges for hard-to-measure costs, and commit to longer contracts. While Amazon and Microsoft agree to pay for infrastructure built specifically for them, they have resisted stricter proposals, with Amazon warning against "punitive, opaque, or overly restrictive" requirements. Utilities and advocates, including Malcolm McCulloch of Puget Sound Energy and the Columbia River Inter-Tribal Fish Commission, highlighted indirect costs like increased competition for clean energy, with Amazon having outbid PSE for a large solar farm in Oregon. UTC Commissioner Ann Rendahl acknowledged these indirect impacts as a "real issue" that is difficult to quantify.
Another point of contention is whether data centers should be mandated to reduce power during energy shortages, especially given the Northwest's potential for winter shortages. While some advocates argue for cutting large loads before residential or commercial customers, Amazon maintains its data centers support essential services for hospitals, financial institutions, and governments, deeming them not "interruptible loads." The UTC plans to release a draft policy statement this fall and a final statement by year-end, addressing various aspects from upfront payments to transparency of project information.