Microsoft is pushing for major changes to Washington’s data center laws as the bill nears a final vote
The race to control the intelligence infrastructure has come to a crossroads in Washington state.
A few weeks later, Microsoft publicly announced its opposition to a controversial state bill that aims to tighten the environmental and economic impacts of the big data centers powering the AI boom.
Labeling the proposed rules “extremely anti-competitive,” Microsoft’s executive director of Washington state government affairs, Lauren McDonald, urged Senate leaders Friday evening to reconsider key aspects of House Bill 2515.
“We respectfully urge the committee not to advance the bill without significant changes,” McDonald said in testimony before the Senate Ways & Means Committee.
The bill’s goals would require utilities and data center companies to enter into agreements that protect ratepayers from rising electricity costs and disclose the facilities’ environmental impacts.
Microsoft, which operates about 30 data centers in Washington alone, plans to spend up to $140 billion on global infrastructure this year, while Amazon has committed to spending $200 billion this year on global capital expenditures, particularly on its Amazon Web Services cloud business.
Elected officials, community and tribal leaders across the country are increasingly concerned about the deployment of data centers that drive up electricity prices with their energy-hungry electricity and use a lot of water to cool the equipment. President Trump and other officials are pursuing commitments to ensure that technology companies protect taxpayers from price increases.
Technology companies, labor unions and municipalities that saw the job creation and tax benefits the facilities generated pushed back the regulations. Microsoft President Brad Smith last month unveiled a community-focused program promising to cover electricity costs and stressing its support for local taxes.
At the same time, the Seattle Times reported today that Microsoft and Amazon have been working hard behind the scenes to weaken HB 2515, and that Amazon is currently “neutral” on the bill. The company, which has historically focused on its Pacific Northwest data center in Oregon, has not publicly testified about the rule.
The law
HB 2515 has passed the House and is moving closer to a vote from the full Senate — although opposition from the tech sector may slow the measure. The bill is changing and evolving with various amendments and new language being considered. The main parts of the law include:
- Taxpayer protection: Utilities must create pricing or policies that protect ratepayers from short-term and long-term financial risks associated with data center energy use.
- Transparency: Data centers must publish annual reports on water, energy, refrigerant use, and air pollution, and a comprehensive sustainability report every three years.
- Forecasting Equipment: Data centers must coordinate with regulators and utilities on energy load forecasting.
- Carbon Credits: The availability of free carbon credits to meet national regulations will be limited.
- Clean Energy Certificate: Utilities that open or expand after July 1, 2026, must ensure their use of new clean energy, using 80% clean energy by 2030 and all clean energy by 2045.
MacDonald raised concerns at the hearing about a law preventing a data center in Malaga, Wash., under construction in 2023 from opening later this year, possibly because of clean energy needs.
One particularly controversial piece — which was not included in the version of the bill that passed the House but is still being debated — requires data centers to reduce or stop drawing power from the grid during power emergencies. Opponents say the law could cripple agencies that support critical operations such as access to electronic medical records or technology to dispatch first responders.
Looking for national standards
Supporters of HB 2515 cast the measure as a necessary regulatory step in a rapidly growing environment, fueled by the growing use of artificial intelligence.
“The game is changing for data centers before our eyes,” Zach Baker, policy director for the nonprofit NW Energy Coalition, told lawmakers. “The general safeguards in this bill are necessary to protect affordability, grid reliability and the environment.”
Washington is currently home to approximately 126 data centers and related facilities. Microsoft has the most data centers in the state of any company, while Sabey Data Centers has eight locations, according to research firm Baxtel.
Rep. Beth Doglio, D-Olympia, the lead sponsor of the legislation, testified earlier this month that 16 new data center projects are planned for Walla Walla and the ongoing expansion at Vantage involves new gas-fired power.
The bill would create a statewide standard for facilities that place new facilities in their communities, he said. “I just hope we can make sure we do data centers in this state.”
Related:
- Washington state has embraced data centers — but now it’s looking to set interoperability goals
- ‘Aimless’ theatre? As tech giants pledge to protect taxpayers in DC, some question real-world impact
- Microsoft reacts to AI data center revolt, vows to pay full energy costs and reject property tax break
