Chelan PUD Mulling Plans For Heavy Use Customers, Data Centers

Chelan PUD is looking at results from a public comment period over how it should deal with a growing number of large load customers, such as a new Microsoft Data Center in Malaga. 

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PUD Staff Attorney Charles von Reis says public interest has been strong. 

"We've had a good amount of public comment, really happy to see the public engagement," von Reis said. "The last presentation and the public comment was well publicized."  

Public comments were taken between July 15 and August 1. 

The biggest concern expressed by the public was a need to preserve reliability and affordable rates for existing customers in Chelan County. 

Among the other comments received were concerns about the priority of service in the event of an energy shortfall, and about relationships with large-load companies changing over time. 

The responses also revealed that customers highly value low rates. 

In addition, there was interest in requiring rooftop solar to be implemented by data centers and large load customers. 

Staff received 13 total comments, including five through emails, four through phone calls and four comments made at the July 15 PUD board meeting. 

Chelan PUD staff has developed five guiding principles to shape the discussions between the PUD and large load companies that want to locate in Chelan County. Those principals are: 

• Ensuring the addition of a large load customer will not have a negative impact on other PUD customers 
• Maintaining reliability, and stable and predictable rates 
• Preserving local control of power generation 
• Achieving a comprehensive and durable framework that treats large-load customers comparably and consistently 
• Protecting the existing practice of selling excess hydropower on the open market 

The PUD is looking at several options to supply power to large load customers, with the utility’s staff favoring the use of an outside third party as a source of electricity for them. 

von Reis says doing so will protect existing customers.  

"We believe that it will preserve the reliability and stability of rates for other customers by tying the large load service to additional imported power," said von Reis. "This partitions, effectively, the consequences for other customers by separating the finances and power supply." 

PUD staff has offered three options for supplying power to heavy load customers.  

• In one option, the PUD would find an outside source of power on the open market and resell that power to the large load customer.  
• In a second option, the large-load customer would identify a third-party wholesale energy source. The PUD would then purchase the power from that source and resell it to the large load customer.  
• In the third option, the PUD would actually supply the power from its own generation and negotiate a contract with the large load customer.  

In all three options, Chelan PUD infrastructure and power lines would be used to deliver the power directly to the customer.  

Also, any arrangement under all three options with a large-load customer would be presented to the PUD Board for approval.  

The utility says it continues to receive more large load requests, which is consistent with a national trend of significant data center growth. 

Microsoft is currently building a data center in Malaga that will house three to six buildings. 

Next month, Chelan PUD commissioners will review a staff proposal for how to supply Microsoft with electricity. Commissioners will also consider updates to the PUD’s rate schedule 4 for large load customers.