Microsoft, Chelan enter power supply deal, broadband MOU

Microsoft Corp. on April 12 unveiled agreements with Chelan County Public Utility District under which Microsoft will receive carbon-free electricity to power its Puget Sound campuses and partner with the PUD on broadband connectivity in Chelan County, Wash.

Through a five-year power supply agreement, Microsoft will receive hydropower from Chelan PUD.

The power supply agreement directly enables this work, as revenues from the power sales will be used to fund hydropower reinvestment, broadband expansion and other benefits for Chelan County. Microsoft will bring technical assistance to this effort, supporting Chelan PUD’s desire to expand technology access to remote parts of Chelan County.

According to PUD Managing Director for Energy Trading Gregg Carrington, the pricing of the Microsoft sale is market-based and includes the value of environmental attributes.

Discussions between Chelan and Microsoft were initiated following a new contact, approved by the Washington State Utilities and Transportation Commission, between Microsoft and Puget Sound Energy. It enabled the technology company to go to the open market to buy 100 percent carbon-free energy to power most of its Puget Sound operations, Chelan noted in a fact sheet.

Microsoft has committed to buying renewable energy at levels substantially higher than Washington state law targets.

Chelan said that successful energy conservation by PUD customers over the past decade has helped save about 20 average-megawatts, which provides surplus energy to help make the Microsoft sale possible. In recent years, PUD conservation programs have achieved results nearly double the level of state mandated requirements, Chelan noted.

Chelan also said wholesale revenue from this agreement and others also will support reinvestment in hydropower assets in order to retain the economic and environmental benefits for the long-term.

Most hydropower in Washington was built between the 1930s and the 1970s and will require new investment to maintain and enhance project capability, the PUD said. (The National Hydropower Association and Chelan recently released a report advocating for public policy changes that could “unleash capabilities of hydropower for the next 30 years.”)

No additional infrastructure will be required in Chelan’s service area to be able to send power from Chelan PUD to Microsoft.  Chelan PUD will work with Vancouver-based Powerex Corp., which will provide real-time forecasting scheduling, and transmission services to assist the PUD in transmitting its carbon-free power from Chelan County to Microsoft’s headquarters. 

Broadband MOU

Microsoft and Chelan also signed a memorandum of understanding to collaborate on efforts to expand broadband service in the most challenging, most rural parts of Chelan County. 

“Connectivity is a shared goal of the two organizations, as demonstrated by the PUD’s success in currently providing broadband access to about three-quarters of the county, and Microsoft’s Airband Initiative, which aims to bring broadband to three million people in rural America by 2022,” a news release related to the agreements noted.

The fiber and wireless partnership includes collaboration to evaluate technology options and strategies that are cost-effective in rural areas, focusing on the last and most difficult 10-15% of Chelan County.

Within the next 12 months, the PUD and Microsoft expect to complete their initial evaluations of expanded fiber buildout in order to identify the most viable solutions. Continued collaboration is expected over the next five years.