OLYMPIA [By: Ayeda Masood] – A proposal to impose new regulations on large energy-using data centers died in the Washington Legislature Monday after failing to advance in the Senate.
If passed, HB 2515 would have required electric utilities serving emerging large energy use facilities (ELEUFs) to impose special tariffs or policies designed to prevent cost shifts to other customers and avoid long-term financial risks.
ELEUFs are defined as facilities with a maximum demand of 20 megawatts or more that primarily provide data processing, hosting and related services, meaning the bill would have significantly affected AI infrastructure and large data center campuses.
The bill, which passed the House earlier this session, would have imposed new cost-recovery and clean energy requirements on those facilities as electricity demand rises across Washington. The bill would have required ELEUF owners to report energy and water use, established clean-energy standards for new or expanding facilities, and prevented the Department of Ecology from issuing no-cost allowances under the state’s carbon Cap-and-Invest program to those customers.
Rep. Beth Doglio, D-Olympia, said the proposal responded to rapid growth in the sector that was not anticipated in Washington’s 2021 energy strategy.
During the bill’s most recent hearing, Doglio referenced a 2025 blog post by OpenAI CEO Sam Altman outlining plans to rapidly expand AI infrastructure.
“Our vision is simple. We want to create a factory that can produce a gigawatt of new AI infrastructure every week,” Altman wrote.
Doglio said, “These goals are ambitious, just like Washington state’s clean energy and climate laws.”
Under the bill, utilities would have been required to structure rates and contracts to recover the full cost of serving large data centers, including infrastructure investments and climate-compliance costs tied to state energy policies. Facilities would also have been required to agree to curtail electricity use during certain energy emergency events.
Supporters argued those guardrails were necessary to protect Washington’s power grid and environmental resources.
Tribal leaders and environmental advocates testified that curtailment provisions could help prevent emergency operations at Columbia River hydroelectric dams that can harm migrating salmon during electricity shortages.
“We saw this during the 2001 energy crisis when an emergency hydro system operation killed tens of millions of juvenile fish,” said Anna Allen, regional government affairs director for the Columbia River Inter-Tribal Fish Commission. “Data centers rely on shared public resources — our power system and our rivers. With that comes a responsibility to protect them.”
Opponents warned the curtailment requirement could threaten critical digital infrastructure during emergencies such as wildfires, when communication systems and cloud services are heavily relied upon.
Lauren McDonald, a lobbyist for Microsoft, testified against the bill, noting that data centers support hospitals, emergency responders and other essential services. She also said backup systems rely on diesel generators, which can increase emissions during outages.
“Some think that there’s this ability to shift [workloads] from one data center to another instantaneously,” McDonald said. “That does not exist.”
Critics also opposed a provision that would have required new or expanding data centers operating after Jan. 1, 2026, to meet 80% of their annual energy and capacity needs with renewable or non-emitting generation beginning in 2030.
Some labor and utility representatives argued Washington is not building clean energy projects fast enough to meet existing deadlines and warned the requirement could slow development.
Republicans framed the proposal as a threat to rural economies that have benefited from data center expansion.
In a statement after the House approved the measure, House Republicans said it would discourage new construction and weaken economic opportunity in communities such as Quincy.
“The data centers have proved that they pay their fair share for their infrastructure on the grid, and most importantly, they offer the opportunity for family-wage jobs,” said Rep. Mary Dye, R-Pomeroy, calling the growth of the industry the “Quincy miracle.”
Supporters maintained the bill would not have banned data centers but instead set guardrails to prevent electricity costs from shifting to other ratepayers and to align the industry’s growth with the state’s climate commitments.
Doglio suggested she plans to continue working on the legislation in next year’s session.
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Author: Washington State Journal
