First agreement under large-load framework protects reliability, rates for existing customers

WENATCHEE – Chelan PUD commissioners Monday approved contract terms to power Microsoft’s data center campus in Malaga. The contract includes several provisions to ensure continued reliability and stable, predictable rates for existing customers.

“Chelan PUD has a long history of managing local hydropower in the best interest of customer-owners,” said General Manager Kirk Hudson. “We’re continuing that legacy by preserving what’s most important to our customer-owners -- reliability and low rates.”

Microsoft plans to begin commissioning the data center in August. Chelan PUD negotiated a short-term contract for up to 18 megawatts of surplus hydropower at market-based pricing through December. From 2026 to 2040, the power source has not yet been determined.

Chelan PUD’s large-load framework offers three options for the supply of energy:

• Short-term supply: Chelan PUD procures wholesale energy from the market and resells to the large-load customer.
• Customer choice: Large-load customer identifies wholesale energy, which Chelan PUD purchases and re-sells to them.
• Negotiated contract: At the Board’s discretion, Chelan PUD negotiates a contract which may include surplus hydropower, consistent with the PUD’s wholesale energy marketing strategy.

Under all three supply options, the energy must meet all requirements set by Chelan PUD and applicable laws, including carbon-free, capacity, and renewable standards.

“We’re proud of the contract that’s before the commission now. It makes good on our commitment to pay our own way for the energy that’s required to power our data centers,” said Irene Plenefisch, Senior Director of Government Affairs at Microsoft. “Under the large load contract, we will receive energy from a third-party supplier. That means we will be bringing in new, clean power from outside the region.”

Microsoft paid up front to build the $86.5 million Jumpoff Ridge substation and other infrastructure improvements that were needed to serve the data center.

The Microsoft data center is considered a large load, which covers a range of power-intensive industries, including manufacturing and industrial plants. Supported by customer feedback, Chelan PUD developed a large-load contract template that ensures costs and risks are covered by large-load customers.


View of Jumpoff Ridge Substation 

In other news, commissioners:

• Approved a lease agreement with Helion One, LLC, for 80 acres on Chelan PUD’s Rock Island Dam property in Malaga. The lease terms include land improvements, water rights, decommissioning provisions, and preferential access for Chelan PUD to purchase potential excess electricity on the site. Full site development is pending regulatory approvals and additional agreements with Chelan PUD, including power supply and transmission interconnection.

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