Chelan PUD Explores Energy Supply for Microsoft Data Centers

Chelan PUD is exploring ways to keep energy affordable to their customers despite increased load to Microsoft's new data center campus in Malaga.

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According to a release, PUD commissioners considered contract terms supplying power to the campus while protecting reliability and stable rates for existing customers.

“Chelan PUD has a long history of managing local hydropower in the best interest of customer-owners,” said General Manager Kirk Hudson. “We’re continuing that legacy by preserving what’s most important to our customer-owners - reliability and low rates."
The Microsoft data center is considered a large load, which covers a range of power-intensive industries. Some ideas include a short-term supply, customer choice, and a negotiated contract which may include surplus hydropower.

As for Microsoft, there is a five-month term where Chelan PUD supplies surplus hydropower at market-based pricing. Commissioners will consider authorizing the proposed contract June 16.

From 2026-2040, the PUD has not determined the power supply for Microsoft's data center, and the PUD is not obligated to serve electricity from its hydropower resources.

"Microsoft will continue to be a responsible neighbor and one that gives back to Central Washington. Our agreement with the Chelan County PUD will ensure ratepayers are protected as we develop and operate our Malaga facilities,” said Irene Plenefisch, Senior Director of Government Affairs at Microsoft. “We are committed to working with the PUD with integrity, developing additional sources of energy and water for our facilities, and paying our own way.”

Microsoft may choose to source power from the wholesale energy market, or negotiate a contract with Chelan PUD at the Board's discretion.