Avista confirms negotiations with company seeking to build large data center

Editor’s note: Avista announced Friday afternoon that the utility is pausing negotiations with the data center developer. 

Avista Corp. confirmed Tuesday that a “large load” customer seeking a massive amount of electricity is planning to build a data center.

The utility last week announced that it had signed a nonbinding memorandum of understanding with a company seeking to build an operation that would draw 125 megawatts of power starting in 2029 with room to expand to 500 megawatts by 2032. That amount of electricity would be more than half of the power used by all current residential and business customers in Spokane County.

The filing dated May 29 with the federal Securities and Exchange Commission does not identify the company or where the proposed business would be located, other than within the company’s “Washington service territory.”

“At that point, there was uncertainty around what we could confirm publicly,” Avista spokesman Jared Webley said in an email. “Since then, we’ve had the opportunity to review the terms of the MOU more closely and confirm that it does not restrict us from identifying that this potential project is a data center development. As we move forward, we’ll continue to share information as appropriate, while respecting the broader context of ongoing discussions and agreements.”

Reached later Tuesday, Webley said because of the terms of the agreement, Avista would not identify the company or the location they seek to build the data center.

Avista leaders have said they won’t move forward with a deal with the firm hoping to build the data center if terms shift financial burdens to existing ratepayers.

“If we do enter into a contract with a large load customer it will be structured so that the large load customer pays for the added costs – things like new power supply, transmission upgrades, and any other infrastructure needed specifically to serve them,” Webley said in an email last week.

The company’s announcement came the same day a petition was launched on Change.org, seeking to oppose the project if it has designs on building in Spokane County.

“We oppose data centers being approved in Spokane. Data centers can consume enormous amounts of electricity and water, strain local infrastructure, increase utility costs, create noise pollution, rely on diesel backup generators, and put additional pressure on our aquifers, our critical drinking-water source,” the petition states. “Spokane should not become a data center hub at the expense of residents, ratepayers, neighborhoods, and our water supply.

“We urge Spokane officials, city planners, City Council, Avista, and all relevant agencies to oppose data center development in Spokane and prevent these projects from moving forward.”

Avista, according to its website, generates about 3,000 megawatts during peak demand for its entire service area, which includes Eastern Washington, North Idaho and parts of Oregon.

If approved, the new customer would eventually draw electricity equal to 16% of Avista’s current power load.

The company’s request of Avista comes during a proliferation of data centers across the country that use vast amounts of electricity and water to fuel the artificial intelligence boom.

Within minutes of the petition being posted online, two Spokane City Council members added their support to the effort to address a data center development.

Spokane city Councilman Paul Dillon wrote that he plans to introduce an ordinance concerning the facility.

“Thanks so much for your advocacy! I agree and fully support a moratorium on data centers and look forward to introducing an ordinance this week,” he wrote.

Sebastian Pedinielli, legislative assistant to Spokane City Councilwoman Sarah Dixit, wrote that she shares Dillon’s concerns about data centers.

“She and other (council members) are working with the administration to address this issue as soon as possible,” Pedinielli wrote.

Dixit and Dillon’s responses add to a growing political energy that is slowly beginning to catch up to voter anger, according to the Washington Post. Lawmakers in both parties are now taking different stances after earlier touting the centers as economic boons.

A Gallup poll released last month showed that 7 in 10 Americans oppose constructing data centers for artificial intelligence in their local area, including 48% who were strongly opposed.

Ohio Gov. Mike DeWine, a Republican, paused new tax breaks for the centers last month after an independent report estimated that they had cost the state more than $1 billion in lost revenue last year. And many candidates of both major political parties have campaigned on demands that AI companies offset electricity use to tame skyrocketing power bills.

But few national politicians are embracing grassroots demands for a pause or ban on data center construction.

Democrats are divided because some trade unions support the centers, which create construction jobs, and because the powerful industry behind them has poured millions into attacking political opponents.

Republicans, according to the Washington Post, have largely supported the centers, spurred by President Donald Trump’s enthusiastic backing, and have only recently been raising concerns as they hear from their enraged base.

The data centers’ footprint encompasses states that are midterm battlegrounds and will be crucial to determining which party controls the House and the Senate next year.

Ohio is home to more than 200 data centers, the sixth most of any state, according to data compiled by the industry group Data Center Map. Georgia, Virginia and Texas host even more of the centers.

A handful of progressive leaders, including Sen. Bernie Sanders, an independent of Vermont, and Rep. Alexandria Ocasio-Cortez, D-.N.Y., have pushed legislation to temporarily ban data center construction.

Local lawmakers in more than 10 states also introduced bills this year to pause construction.

Last week, residents of Monterey Park, California approved the nation’s first permanent ban on data centers, with more than 86% of voters supporting the prohibition.

The Washington Post contributed to this report.