Five large data centers eyed for Seattle

The data center boom fueling artificial intelligence’s rise could be coming to Seattle proper, which the city utility says could make its job of providing power to residents more difficult.

Four companies have approached Seattle City Light about building five large-scale data centers with a combined maximum demand of 369 megawatts – roughly one-third of what the city uses on an average day.

City Light said it could not share which companies were involved or the proposed locations due to nondisclosure agreements.

While Seattle has long been home to data centers, most are relatively small. The five proposed data centers would be the first at this scale and, at full capacity, could consume nearly 10 times more power than the 30 existing facilities – though customers rarely operate at maximum load.

That kind of demand could cut into the resources the utility has to serve its existing customers, according to Andy Strong, environmental, engineering and project delivery officer at Seattle City Light.

“We only have so many engineers. We only have so many project managers,” Strong said. “It’s going to have an impact.”

Interest in building large-scale facilities in Seattle comes as the world’s largest technology companies, including Microsoft and Amazon, have been spending hundreds of billions of dollars in the last few years building data centers to rapidly scale up artificial intelligence.

Developers have typically built them where land and electricity are cheap, often away from urban areas. But they’ve run out of power in many places, making access to electricity the main bottleneck, according to industry experts.

“Cost is always going to be important, but availability is equally as important now,” said Pat Lynch, who leads the data center team at CBRE, one of the world’s largest real estate services firms.

Seattle is in a unique position as a major city; it owns dams on the Skagit and Pend Oreille rivers that often generate more hydropower than the city needs. However, in recent years of low snowpack and drought, that hasn’t always been the case, and City Light has burned through its savings buying power on the wholesale market, which has contributed to higher rates for customers.

Plus, the city’s utility already faces the daunting task of needing to nearly double its maximum electricity generation by 2033 due to increasing power demand from building electrification, electric vehicles and population growth.

In response to the proposed data centers, City Light is rewriting its contract terms for “large load” customers that use a lot of electricity. Strong said the new policy would likely require the data centers to find their own power generation outside of the city’s supply and have them pay for any infrastructure upgrades they need so residents’ rates don’t increase as a result.

“This cannot go back to the ratepayer,” Strong said.

City Light recently sent the companies proposing the data centers cost estimates for the grid infrastructure upgrades that are needed to support them. And it plans to send the updated large load contracts to the mayor’s office for review soon.

Depending on how the companies feel about those terms, they may or may not follow through on their proposed projects. Data center operators are proposing many more projects than they actually build, market analysts say, likely in search of the most favorable terms.

“It’s still somewhat speculation whether they’ll be customers of ours or not,” Strong said.

The companies involved are expected to decide in the next two or three months whether to formally apply for service.