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Washington Utility District OKs $4M Investment in Microsoft Substation

Chelan County PUD commissioners voted in favor of buying seven capacitor banks at about $4 million total for the upcoming Microsoft data center. The banks will ensure more efficient power delivery to the facility, officials say.

An abstract view of a data center with motion blur and light trails.
(TNS) — The Chelan County PUD took a big step on an $86 million Malaga substation, which will power the planned Microsoft data campus.

PUD commissioners July 24 voted to buy seven capacitor banks at about $4 million total for the Microsoft data center, on which contractors in June began demolishing buildings.

"Generally speaking, capacitors provide power factor compensation which leads to more efficient power delivery," wrote Rachel Hansen, PUD spokesperson, in an email. "We can't give specifics beyond what's listed in the resolution as a matter of substation security."

According to Hansen, Jumpoff Ridge Substation will sit on the Microsoft campus, on the 5300 block of Malaga Alcoa Highway, with groundbreaking expected in the fall. The substation's expected completion is the end of 2025. PUD documents show the capacitors were ordered early due to long lead times to ensure their arrival in time.

Microsoft has already paid for "costs associated with the substation, including equipment and contractor resources," Hansen wrote. "... contracts for purchase of significant substation equipment have been placed."

The substation, dubbed Jumpoff Ridge, was named after the nearby rock formation, Hansen said.

"Chelan PUD is building the equipment needed to bring power on the site, but where the power is coming from and how much power is yet to be determined," said Shawn Smith, Chelan County PUD managing director of energy resources, at a March event. "I can assure everybody throughout the county that the agreement with Microsoft will not increase your rates."

The metal-enclosed capacitors will help power 360 megawatts to Microsoft's data center, comprised of at least three buildings on roughly 105 acres, according to the State Environmental Protection Act (SEPA) application.

The new substation includes a 115-kilovolt and a 230-kilovolt section, to be completed in phases, the application stated, with the PUD's lines feeding into them. The project also includes reconductoring about 1.5 miles of line from the McKenzie Substation, at 6200 Malaga Alcoa Highway, to Jumpoff Ridge Substation to increase capacity and support the new load demand, among other things.

"The transmission project requires installation of 25 new structures and removal of 20 existing structures," the application stated, as well as about "310 cubic yards of excavation, 100 cubic yards of fill, and 240 cubic yards of concrete." The fill's source "will be determined by the contractor from local approved sources."

Microsoft declined to answer any specific questions but released a statement from an unnamed "spokesperson":

"Microsoft is committed to supporting local business growth and innovation. We don't have anything definitive to share at this time but can confirm we are committed to supporting Washington's digital transformation with the Microsoft cloud."

The data center campus is currently in the first phase of development, clearing, and demolishing buildings, and is expected to be complete in early 2026, but not necessarily operable, according to Microsoft's website.

Demolition includes about 12 structures, including an approximately 2,000-square-foot storage/maintenance building, a single-family home, a Quonset hut, seven mobile homes, and several outbuildings (storage sheds, carports), according to the SEPA application.

Construction of one building will start in May 2024 and end in early 2026, the website stated. "The timing of construction of the other two datacenter buildings will be driven by customer demand for Microsoft cloud services.".

Each of Microsoft's three buildings is slated to house an administrative area with data halls for "climatized storage of computer servers," according to the SEPA application. Each building will be about 30 feet high, have employee parking, a loading dock, and exterior equipment yards for mechanical and backup electrical equipment. Four private on-site water storage tanks less than 60 feet high will "help provide adequate backup water and fire flow storage."

Sixty-five emergency diesel-powered generators, roughly 21 for each of the three buildings, will sit on-site in case of power outages.

©2023 The Wenatchee World, Distributed by Tribune Content Agency, LLC.