Friday, September 8, 2000, 12:00 a.m. Pacific

Power demand could lead to surge in rates

by Jim Brunner Seattle Times staff reporter Will Seattle's high-tech boom lead to higher electric bills?

Seattle City Light, faced with a sudden surge in demand for electricity because of power-hungry Internet operations, is wrestling with that question. The utility has already proposed a rate increase of about 8 percent for next year and might have to levy even higher rates as it buys more power to serve the new demand.

The challenge comes from new facilities called Internet data centers or server farms - basically huge buildings jammed full of computers and other equipment needed to keep the new high-speed Internet humming. The power demand from the computers, and the air conditioning needed to keep them cool, is enormous.

Utility officials now want to charge these operations, dubbed "new large loads," higher rates to pay for new substations needed to serve them. The steps are aimed at ensuring that City Light's current customers won't have to subsidize the new drain on the system. But at a hearing before a City Council committee yesterday, some representatives of the high-tech companies claimed City Light's idea could throttle their operations.

"You have your hands around the neck of the golden goose of the new economy," said Jay Garthwaite, managing director for InfoAge Services Group, a Bellevue-based developer of data centers.

Garthwaite's company is developing 10 of the high-tech facilities in the Puget Sound area, including three in Seattle City Light's territory. The facilities, between 100,000 and 500,000 square feet, are in varying stages of development.

Each will eventually be jammed with computers, routers and other equipment, plus air conditioning needed to keep everything cool all year around. Each will consume at least 20 megawatts of electricity 24 hours a day, he said.

Seattle City Light estimates that several similar "new large loads" are due to come online in the next few years. It is estimated that projects already in the works will add at least 200 megawatts to City Light's power load, which hovers around 1,200 megawatts.

One of the new Internet operations - City Light won't reveal which one - will consume 105 megawatts by 2002. That's enough to power more than 85,000 homes, or about a dozen 60-story office towers.

The facilities typically do not provide many jobs, but Garthwaite argued that they support many jobs because they keep the high-tech economy humming. That promotes direct employment by Internet companies as well as allowing other office workers to work from home, arguably reducing traffic congestion.

Perhaps the largest example of a data center is Tukwila's Intergate facility, housed in a former Boeing military-aircraft complex that is expected to provide 1.5 million square feet of space for high-tech tenants.

While developers of some Internet data centers worry that they'll be treated unfairly by City Light, some representatives of more-traditional industries said yesterday they didn't want to be forced to pay higher rates to subsidize the high-techs.

"We will not be competitive if the rates increase to support these new large-load costs," said Ray Lepp, plant manager for Birmingham Steel's Seattle division, a local manufacturer with 300 workers.

The dilemma for the city will be to balance the needs of its new power customers with its established ones.

"We want to encourage and support economic development," said Councilwoman Heidi Wills, who chairs the Energy and Environmental Policy Committee. "At the same time, we want to protect our residential and small-business customers from the added demand."

City Light has different rates for residential, business and industrial, and "new large loads" would be a new classification.

The committee postponed a vote on the new rates and will conduct an additional public hearing before making its decision.

http://seattletimes.nwsource.com/news/local/html98/powr08m_20000908.html

-- Martin Thompson (mthom1927@aol.com), September 08, 2000