Internet data gain is a major power drain on local utilities Server farms' voracious appetite for electricity sparks several concerns

Tuesday, September 5, 2000

By JOHN COOK SEATTLE POST-INTELLIGENCER REPORTER

In 1997, a little-known Silicon Valley company called Exodus Communications opened a 15,000-square-foot data center in Tukwila.

The mission was to handle the Internet traffic and computer servers for the region's growing number of dot-coms.

Fast-forward to summer 2000. Exodus is now wrapping up construction on a new 13-acre, 576,000-square-foot data center less than a mile from its original facility. Sitting at the confluence of several fiber optic backbones, the Exodus plant will consume enough power for a small town and eventually house Internet servers for firms such as Avenue A, Microsoft and Onvia.com.

Exodus is not the only company building massive data centers near Seattle. More than a dozen companies -- with names like AboveNet, Globix and HostPro -- are looking for facilities here that will house the networking equipment of the Internet economy.

It is a big business that could have an effect on everything from your monthly electric bill to the ease with which you access your favorite Web sites.

Data centers, also known as co-location facilities and server farms, are sprouting at such a furious pace in Tukwila and the Kent Valley that some have expressed concern over whether Seattle City Light and Puget Sound Energy can handle the power necessary to run these 24-hour, high-security facilities.

"We are talking to about half a dozen customers that are requesting 445 megawatts of power in a little area near Southcenter Mall," said Karl Karzmar, manager of revenue requirements for Puget Sound Energy. "That is the equivalent of six oil refineries."

A relatively new phenomenon in the utility business, the rise of the Internet data center has some utility veterans scratching their heads.

Puget Sound Energy last week asked the Washington Utilities and Transportation Commission to accept a tariff on the new data centers. The tariff is designed to protect the company's existing residential and business customers from footing the bill for the new base stations necessary to support the projects. Those base stations could cost as much as $20 million each, Karzmar said.

Not to be left behind, Seattle City Light plans to bring up the data center issue on Thursday at the Seattle City Council meeting.

For the utilities that provide power to homes, businesses and schools in the region, this is a new and complex issue.

On one hand, the data centers -- with their amazing appetite for power -- represent potentially lucrative business customers. The facilities run 24 hours a day, seven days a week, and therefore could become a constant revenue stream. On the other hand, they require so much energy that they could potentially flood the utilities with exorbitant capital expenditures.

Who will pay for those expenditures and what it will mean for power rates in the area is still open to debate.

"These facilities are what we call extremely dense loads," said Bob Royer, director of communications and public affairs at Seattle City Light.

"The entire University of Washington, from stadium lights at the football game to the Medical School, averages 31 megawatts per day. We have data center projects in front of us that are asking for 30, 40 and 50 megawatts."

With more than 1.5 million square feet, the Intergate complex in Tukwila is one of the biggest data centers. Sabey Corp. re-purchased the 1.35 million square-foot Intergate East facility last September from Boeing Space & Defense. In less than 12 months, the developer has leased 92 percent of the six-building complex to seven different co-location companies.

"It is probably the largest data center park in the country," boasts Laurent Poole, chief operating officer at Sabey. Exodus, ICG Communications, NetStream Communications, Pac West Telecomm and Zama Networks all lease space in the office park.

After building Exodus' first Tukwila facility in 1997, Sabey has become an expert in the arena and now has facilities either under management or development in Los Angeles, Spokane and Denver. Poole claims his firm is one of the top four builders of Internet data centers in the country.

As more people access the Internet and conduct bandwidth-heavy tasks such as listening to online music, Poole said the need for co-location space in Seattle continues to escalate.

But it is not just Seattle. The need for data center space is growing at a rapid clip at many technology hubs throughout the country, causing similar concerns among utilities in places such as Texas and California.

Exodus, one of the largest providers of co-location space, plans to nearly double the amount of space it has by the end of the year. While companies such as Amazon.com run their own server farms, many high-tech companies have decided to outsource the operations to companies such as Exodus that may be better prepared for dealing with Internet traffic management.

"We have 2 million square feet of space under construction and we plan to double our size in the next nine months, yet there is more demand right now than data center space," said Steve Porter, an account executive at Exodus in Seattle.

The booming market for co-location space has left some in the local utility industry perplexed.

"It accelerates in a quantum way what you have to do to serve the growth," said Seattle City Light's Royer. "The utility industry is almost stunned by this, in a way."

http://seattlep-i.nwsource.com/business/data05.shtml

-- Martin Thompson (mthom1927@aol.com), September 06, 2000

Answers

Stunned, they should be. The growth of hi-tech in Seattle has been exponential. This puts a new additional drain and strain on the utilities.

-- JackW (jpayne@webtv.com), September 06, 2000.

I've heard that, even though there is much hydro-power in Seattle, much of the residential heating is by home heating oil and natural gas imported from Canada, two fuels which will soon be in very short supply.

I wonder what the Jr. Silicon Valley boys up there will do to keep their operations running.

-- QMan (qman@c-zone.net), September 06, 2000.

Yes, I've heard that Seattle is not too far behind Silicon Valley now as a hi-tech center.

-- Wellesley (wellesley@freeport.net), September 06, 2000.

With rents of $10,000 a month being charged now in Palo Alto for three-bedroom, two-bath homes, don't you suppose this factor has something to do with driving people northward, too?

-- Nancy7 (nancy7@Hotmail.com), September 06, 2000.

Real estate in the Seattle area are not exactly cheap these days either. If you were to buy a 3-bedroom, 2-bath house in the Seattle area now, you could expect to pay around a half million.

-- JackW (jpayne@webtv.net), September 06, 2000.

Once upon a time Seattle was a Boeing company town. No longer. The Gates revolution in that area changed everything.

-- Wayward (wayward@webtv.com), September 06, 2000.