Hermiston approves ASR well contract and water service deal with Amazon; city says Amazon will pay construction costs and same water rates

Hermiston city leaders on Feb. 24 approved two related measures to provide water to planned hyperscale data center campuses: a contract award to drill an aquifer storage and recovery (ASR) well and a water‑service agreement with Amazon Web Services.

Assistant City Manager Morgan told the council the agreements will allow the city to pump river water in winter, treat it, and inject it into a deep basalt aquifer for later seasonal use by data centers. Morgan said Amazon will pay for the construction and that the company will “pay the exact same water rates as all other customers within the community.” Councilor Hayward recused himself from the votes because he works for Amazon Web Services.

Phase 1 of the project — the subject of Resolution 23‑55 — authorizes award of a drilling contract for an ASR well to be drilled roughly 1,500 feet deep between two Amazon campuses now under construction. The staff report shown to council estimated a drilling contract award of about $6.1 million and total phase‑1 costs near $8.1 million, all to be paid by Amazon. The council voted to adopt the resolution (motion by Councilor Brown, second by Councilor McCarthy); the roll call recorded 6 yes, 0 no with 1 recusal.

Morgan described how the system would operate: roughly October through March the city would divert up to about 400 million gallons of Columbia River water in winter, treat it and inject it into the aquifer to build a subsurface “bubble.” During summer months, data centers would draw cooling water from that stored supply rather than taking additional summer river flows. Morgan said the agreement also requires Amazon to pay for at least 100 million gallons per year more than it uses; that extra volume, Morgan said, would be left in the aquifer for future community use.

The contract and agreement include technical and regulatory safeguards. Morgan said the city expects the Oregon Water Resources Department to approve the ASR limited license application and that the city will monitor the injected water. He said ASR is a widely used method in Oregon (Pendleton, Kennewick, The Dalles and Prineville were cited) and that injected potable water recovery rates are expected to be over 95%.

Council discussion addressed capacity, environmental effects and local benefit. Morgan said Hermiston’s regional water system already holds significant winter capacity and that the ASR arrangement would increase available summer potable supply: injecting roughly 100 million gallons a year for municipal use would increase peak‑month capacity materially — Morgan estimated an increase equivalent to roughly 40% of current peak monthly demand in extreme months. He also said that some treated discharge from Amazon could be routed to the Hermiston Irrigation District canals, which could help small local farmers and stretch reservoir releases.

Resolution 23‑56 approves the water service agreement that sets guaranteed instantaneous delivery rates (up to 4,500 gallons per minute for peak demand design), a guaranteed annual volumetric minimum of 105 million gallons for Amazon, and the broader commercial terms. That resolution also passed on a 6‑0 vote (one recusal).

Morgan said the ASR well is being tracked in two phases: Phase 1 (drill and create the bubble, then monitor for several years) and Phase 2 (build the storage and conveyance for ongoing delivery). Phase‑2 costs are more variable — staff estimated roughly $12 million in additional infrastructure depending on the well yield — and the agreement requires Amazon to fund those improvements as well. The company will be billed as the city incurs costs and will reimburse the city; staff said reimbursements will be near‑instantaneous and should not create a material budget exposure for the city.

Assistant City Manager Morgan and other staff emphasized that the project is regulated by state water authorities and will require monitoring, permitting and reporting. Councilors asked about aquifer migration and rights; Morgan said injected water will be tracked as credited water under OWRD procedures and the city’s municipal water rights will be expanded accordingly. The council adopted both resolutions during the Feb. 24 meeting; the ASR drilling contract (Resolution 23‑55) and the water service agreement (Resolution 23‑56) move the project into the construction and permitting phase.