Chelan PUD commissioners on June 16 approved contract terms to power a Microsoft data center campus in Washington State.
The contract includes several provisions to ensure continued reliability and stable, predictable rates for existing customers, the Washington State PUD said.
“Chelan PUD has a long history of managing local hydropower in the best interest of customer-owners,” said Chelan PUD General Manager Kirk Hudson. “We’re continuing that legacy by preserving what’s most important to our customer-owners -- reliability and low rates.”
Microsoft plans to begin commissioning the data center in August. Chelan PUD negotiated a short-term contract for up to 18 megawatts of surplus hydropower at market-based pricing through December.
From 2026 to 2040, the power source has not yet been determined.
Chelan PUD’s large-load framework offers three options for the supply of energy:
• Short-term supply: Chelan PUD procures wholesale energy from the market and resells to the large-load customer.
• Customer choice: Large-load customer identifies wholesale energy, which Chelan PUD purchases and re-sells to them.
• Negotiated contract: At the Board’s discretion, Chelan PUD negotiates a contract which may include surplus hydropower, consistent with the PUD’s wholesale energy marketing strategy.
Under all three supply options, the energy must meet all requirements set by Chelan PUD and applicable laws, including carbon-free, capacity, and renewable standards.
Microsoft paid up front to build the $86.5 million Jumpoff Ridge substation and other infrastructure improvements that were needed to serve the data center.
The Microsoft data center is considered a large load, which covers a range of power-intensive industries, including manufacturing and industrial plants.
Supported by customer feedback, Chelan PUD developed a large-load contract template that ensures costs and risks are covered by large-load customers.
