Tech Firms Go Mining for Megawatts

Grand Coulee Dam is one of five along the Columbia River that generate more electricity than the area can use.
Grand Coulee Dam is one of five along the Columbia River that generate more electricity than the area can use. (By Elaine Thompson -- Associated Press)
By Blaine Harden
Washington Post Staff Writer
Sunday, July 9, 2006

QUINCY, Wash. -- Microsoft is pouring concrete in a bean field on the west end of town. Yahoo is digging up a field of alfalfa out on the east end. Google, which declines to comment, is said to be sniffing around for its own field of dreams here in the semi-desert outback of eastern Washington.

This small farm town, population 5,300, has become the Klondike of the wildly competitive Internet era. The gold in Quincy is electricity, which technology heavyweights need to operate ever-larger data centers as they fight for world domination.

Their data centers -- air-conditioned warehouses filled with thousands upon thousands of computer servers that talk to Internet users around the globe -- are extraordinary power hogs. Microsoft says electricity consumption at its data centers doubled over the past four years and will triple over the next five.

There is cheap electricity here and lots of it. That is because the Columbia, the premier hydroelectric river in North America, flows nearby. Three publicly owned, local utilities own five large dams on the river, and they produce much more electricity than the sparse local population can use. With power prices soaring, the three utilities have become the hydroelectric emirates of the Pacific Northwest.

Until now, they have been obligated under 50-year-old contracts to sell about two-thirds of their power -- without profit -- to major utilities serving millions of people in Seattle, Tacoma and Portland. The arrangement helped keep monthly electric bills in the Northwest far below the national average.

Those old contracts, though, are expiring -- a development that will help push up residential electricity rates across the region. And the mid-Columbia utilities are scurrying to sell their newly unleashed power to the corporate giants of the Internet -- if they are willing to plant "server farms" in two-stop-light towns such as Quincy.

They do seem uncommonly eager.

Out in the bean field, Microsoft is rushing to complete what it says will be the largest data center it has ever built. It is scheduled to go online in February. Downstream in The Dalles, Ore., Google is building a data center that will go online within the next year and is reported by local officials to be scouring the region looking for other sites. Upstream in Wenatchee, Wash., Yahoo is expected to go online with another data center in the fall and is in negotiations for still others.

"They are salivating," said Rufus Woods, publisher of the Wenatchee World, the dominant newspaper in this part of the state.

It was his grandfather, also named Rufus Woods, who was the principal booster and relentless propagandist behind federal construction of Grand Coulee Dam, completed in 1942 as the world's largest dam. It is still the largest hydroelectric plant in North America.

Grand Coulee, by creating a 151-mile-long reservoir behind the dam, ironed out the violent flow of the Columbia, ending early-summer floods and making it easier for local utilities downstream to build much less expensive dams that could milk significant amounts of power from the river.

The first Rufus Woods boasted noisily in the pages of his newspaper that electricity from the dams would lure major industry to Wenatchee and the Columbia Basin. But the federal government broke his heart by stringing wires across the Northwest and setting up rules requiring dams to sell most electricity at a postage stamp rate, meaning that power had to cost the same in Wenatchee as it did hundreds of miles away in Seattle, Tacoma or Portland.

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