Cheap hydro dries up

| Print |  Email
Thursday, July 23, 2009

The days of the Googles and Amazons of the world rushing to The Dalles and Boardman to cash in on cheap federal hydropower for secretive new server farms are officially over.

As part of an exhaustive process to negotiate new 20-year contracts with its key electricity customers, the Bonneville Power Administration has closed the loophole that convinced Google, Amazon, Microsoft and Yahoo to build high-energy data centers jam-packed with servers and powered by subsidized Columbia River hydropower.

Previously these companies were allowed to partner with local governments and public utility districts (PUDs) to negotiate bargain-basement power rates with the BPA of around 2.5 cents per kilowatt-hour in exchange for new jobs and guaranteed power purchases. But under the new rules, any new user of electricity will have to pay a fair market price rather than the historically low wholesale rate paid to PUDs.

“We are going to serve at the historic low rate for the current load, but for load growth, they will pay for the cost of the added supply,” says BPA administrator Stephen Wright. “The load server farms that got in before now, good for them. From this point forward, everyone is going to see basically the same price.”

The new policy will not sour the sweetheart deals that are already in place for Google in The Dalles or Amazon in Boardman. Nor will it slow the demand for new server farms to support the cloud computing boom. It just moves them out of the region. In July Microsoft opened new data centers in Ireland and Chicago, and Apple recently announced that it will invest more than a billion dollars in a data center in North Carolina.

BEN JACKLET
 

Comments   

 
thinking forward
0 #1 thinking forward 2009-08-05 14:43:50
Do you remember the FAKE Power Shortage that KILLED the Aluminum Plants? Here we go again!! Jobs Jobs we need Jobs!!!
Quote | Report to administrator
 
 
Ben J
0 #2 Ben J 2009-08-06 11:36:50
The subsidized power for the aluminum plants could not last forever. Neither could the cheap power for the server farms. Power costs are going up, not down. That will kill some jobs, while creating others.
Quote | Report to administrator
 

More Articles

The Carbon Calculus

February 2015
Friday, January 23, 2015
BY KIM MOORE | OB RESEARCH EDITOR

Carbon pricing is gaining momentum in Oregon, sparking concern for energy-intensive businesses — but also opportunity to expand a homespun green economy.


Read more...

Raising the Stakes

February 2015
Monday, January 26, 2015
BY LINDA BAKER

The 2014 Bend Venture Conference set a record for the most cash, investments and prizes awarded at an angel conference in the Pacific Northwest. Investments in the six winning companies exceeded $1 million. The 11th annual conference was hosted by Economic Development of Central Oregon.


Read more...

LEED for weed

News
Wednesday, January 28, 2015
012815-potcarbon-thumbBY LINDA BAKER | OB EDITOR

What is the impact of the legal pot industry on carbon emissions? An NEBC energy forum breakfast makes the case for taking the new industry’s emissions impacts seriously.


Read more...

Which Way to Chinatown?

February 2015
Monday, January 26, 2015
BY AMY MILSHTEIN | PHOTOS BY JASON E. KAPLAN

The Jade International District, already Portland's center of Asian life, is poised for rejuvenation. Where does that leave the westside's historic Chinatown?


Read more...

The short list: Holiday habits of six Oregon CEOs

The Latest
Thursday, December 11, 2014
121214-xmaslist1BY JACOB PALMER | OB DIGITAL NEWS EDITOR

We ask business and nonprofit leaders how they survive the season.


Read more...

Political theater

News
Wednesday, January 07, 2015
0107-orbizplansum14-thumbBY LINDA BAKER | OB EDITOR

The Oregon Business Plan Leadership Summit drew more than 1,000 people to the Oregon Convention Center yesterday.


Read more...

Top stories in 2014

The Latest
Thursday, December 18, 2014
10-listthumb

2014 was a year of wild contradictions, fast-paced growth and unexpected revelations.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS