PUD Commissioners Consider Powering Data Center in a Way that Protects Reliability, Rates

Chelan PUD commissioners are negotiating power supply contracts for Microsoft's new data center in Malaga, focusing on customer reliability and stable rates. General Manager Kirk Hudson affirmed the utility's commitment to its customer-owners while managing local hydropower resources. The established framework offers large-load customers, including Microsoft, three options for energy procurement. Microsoft has already invested in infrastructure, including an $86. 5 million substation, to support its energy needs.

The initial contract allows for up to 18 megawatts of surplus hydropower at market-based pricing, enabling the data center to begin operations in August. The Board will review the proposed contract on June 16. Power supply arrangements for Microsoft from 2026 to 2040 remain uncertain, as Chelan PUD is not obligated to provide hydropower. Microsoft may negotiate future contracts or source from the wholesale market, demonstrating its commitment to being a responsible neighbor and ensuring ratepayer protection.