Data Centers in Rural Washington State Gobble Power

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The New York Times
Monday, September 24, 2012

Data Centers in Rural Washington State Gobble Power

By JAMES GLANZ

QUINCY, Wash. — Set in the dry hills and irrigated farmland of Central Washington, Grant County is known for its robust harvest of apples, potatoes, cherries and beans. But for Microsoft, a prime lure was the region’s other valuable resource: cheap electrical power.

The technology giant created a stir here in 2006 when it bought about 75 acres of bean fields to build a giant data center, a digital warehouse to support various Internet services. Its voracious appetite for electricity would be fed by hydroelectric generators that work off the flow of the nearby Columbia River, and Microsoft officials pledged to operate their new enterprise with a focus on energy efficiency and environmental sensitivity.

“You’re talking about one of the largest corporations,” said Tim Culbertson, who was the general manager of the local utility at the time. “You’re talking Microsoft and Bill Gates. Wow!”

But for some in Quincy, the gee-whiz factor of such a prominent high-tech neighbor wore off quickly. First, a citizens group initiated a legal challenge over pollution from some of nearly 40 giant diesel generators that Microsoft’s facility — near an elementary school — is allowed to use for backup power.

Then came a showdown late last year between the utility and Microsoft, whose hardball tactics shocked some local officials.

In an attempt to erase a $210,000 penalty the utility said the company owed for underestimating its power use, Microsoft proceeded to simply waste millions of watts of electricity, records show. Then it threatened to continue burning power in what it acknowledged was an “unnecessarily wasteful” way until the fine was substantially cut, according to documents obtained by The New York Times.

“For a company of that size and that nature, and with all the ‘green’ things they advertised to me, that was an insult,” said Randall Allred, a utility commissioner and local farmer.

A Microsoft spokeswoman said the episode was “a one-time event that was quickly resolved.”

Internet-based industries have honed a reputation for sleek, clean convenience based on the magic they deliver to screens everywhere. At the heart of every Internet enterprise are data centers, which have become more sprawling and ubiquitous as the amount of stored information explodes, sprouting in community after community.

But the Microsoft experience in Quincy shows that when these Internet factories come to town, they can feel a bit more like old-time manufacturing than modern magic.

In Santa Clara, Calif., a hub of technology facilities in Silicon Valley, diesel emissions from generators at a Microsoft data center caught the attention of regulators for potentially threatening the health of workers at nearby businesses. Microsoft, which was notified by state regulators last year, says it has reduced its emissions.

Over the last few years, Quincy has become an unlikely technology outpost, with five data centers and a sixth under construction. Far from the software meccas of Northern California or Seattle, Quincy has barely 6,900 residents, two hardware stores, two supermarkets, no movie theater and a main drag, State Route 28, whose largest buildings are mostly food packers and processors. Its tallest building is a grain elevator.

“A farming community in the middle of a desert,” said Warren Morgan, the president of Double Diamond Fruit.

The remarkable scale of the Quincy data centers, and their power demands, have made this town something of a test tube for studying the planet’s exploding need to house and process digital information.

The data centers, which include Yahoo and Dell facilities, wound up in Quincy by way of the Columbia. The river flows 1,200 miles from the mountains of British Columbia to the spectacular gorge between Oregon and Washington, where the water crashes into the Pacific Ocean.

Along the way, about a dozen large hydroelectric dams tame the river, providing irrigation for farms and the cheap, plentiful power that has become a magnet for large agricultural operations and heavy industries like aluminum, steel, paper and chemical plants.

When Microsoft was searching the country for a location for its new installation, the Grant County Public Utility District, which owns two of the dams, says it offered the company rates that would range from 2.5 cents to 3.8 cents per kilowatt-hour in its first five years — far below the national industrial average of 6 cents to 7 cents, according to analysis based on federal figures by the Electric Power Research Institute. The power from dams is also highly reliable, a critical factor for data centers, which can crash with the slightest interruption.

Beyond power, Washington State has awarded the industry lucrative tax breaks, ostensibly to promote growth in rural areas. Although the initial expectations that private fortunes would be made on land sales and housing developments were quickly dashed, Quincy’s revenue from property taxes, which data centers do pay, has risen from $815,250 in 2005 to a projected $3.6 million this year, paying for a library and repaved streets, among other benefits, according to Tim Snead, the city administrator.

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