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Substitute bill would force data centers to shoulder grid, water and cost risks amid sharp debate
Summary
The substitute for HB 25‑15 would require utilities to adopt tariffs or policies to avoid cost shifts from large data centers (20 MW+), mandate reporting on water and energy use, impose clean‑energy targets and create an annual fee; testimony split between environmental and community‑aid advocates supporting the bill and utilities, business groups and labor warning about costs and competitiveness.
Megan McFadden, staff to the House Environment & Energy Committee, briefed lawmakers on the proposed substitute to House Bill 25‑15, which defines an emerging large energy use facility (ELEUF) as a facility with a maximum aggregate contract demand of 20 megawatts or more that is primarily engaged in data‑center services or virtual currency mining under NAICS codes. The substitute would require utilities to adopt tariffs or policies (or demonstrate why an element is unnecessary) that include long‑term contract provisions (including a 10‑year contract option), charges that cover at least the full cost of serving the facility, curtailment provisions for energy emergencies, and participation in or funding of demand‑response programs.
The bill would require ELEUFs to file projected and annual water and energy use reports, provide evidence of adequate water supply, report effluent discharges, air pollutant emissions and regulated‑refrigerant use. It directs the Utilities and Transportation Commission (UTC) and the Department of Commerce to develop reporting standards and facilitate utility workgroups on readiness criteria for interconnection. The substitute also bars Ecology from distributing no‑cost allowances under the state’s cap‑and‑invest program to utilities to mitigate costs of serving an ELEUF, and it creates an annual energy‑use fee paid to the Department of Revenue with revenues split (40 percent energy‑related uses, 60 percent higher‑education/technology workforce purposes in the bill text as presented).
Sponsor Representative Beth D'Oleo said the bill protects ratepayers and grid reliability, defends clean‑energy goals, and prevents cost shifting to households by ensuring new data centers pay the full cost of growth while supporting labor standards and workforce training. She cited work by a governor's data‑center task force and noted PUDs in Grant, Chelan and Douglas counties as examples of local approaches.
Testimony was sharply divided. Climate and conservation groups (Climate Solutions, Northwest Energy Coalition, Washington Conservation Action, Sightline Institute, NRDC) and community‑action agencies supported the bill for ratepayer protections, transparency and funding for energy assistance. Tribal testimony from the Yakama Nation urged clarifying pricing mechanisms and requiring reports to demonstrate projects would not harm watershed conditions or fisheries. Several public utilities (Tacoma Power, Snohomish PUD, Grant PUD, Avista) and labor and construction groups urged caution or opposed the bill in its current form, warning about prescriptive tariff language, the removal of no‑cost allowances under the Climate Commitment Act and potential impacts on local jobs and regional competitiveness.
Industry groups and ports said the proposed language could make Washington an outlier, risk discouraging investment and should be broadened to address other large industrial loads rather than single out data centers. The Department of Ecology supported greater transparency and argued the substitute could reduce allowances going to utilities; Ecology also cautioned that interruptible‑service provisions might encourage diesel backup usage that would harm air quality.
On revenue, staff cited a preliminary Department of Revenue fiscal estimate of about $46.4 million in the FY27‑29 biennium and $67.7 million in FY29‑31 from the proposed annual fee; staff noted the fiscal note was not final.
The committee closed testimony after extensive panels, moved to executive session and then took roll‑call and voice votes on unrelated bills (HB 2,272 and HB 23‑67) before adjourning. The substitute itself was not voted on at this meeting.
