Big Tech companies are moving fast behind the scenes to defang or kill many newly proposed regulations aimed at their booming data center operations in Washington.
At the start of this short legislative session, lawmakers sought to establish guardrails for the fast-growing sector. With an ambitious and sweeping set of regulations, largely contained within a single bill, they endeavored to place higher electricity rates on data centers, require them to build more clean energy, boost transparency and more.
Behind the scenes, lobbyists for tech companies and their allies jumped into action, arguing against any new laws meant to reel in these energy-intensive projects that fuel our increasingly online lifestyles. Emails and internal bill markup documents obtained by The Seattle Times show just how hard they’re pushing. And the strategy has been working.
For some lawmakers and energy experts, the maneuvering might contradict some of these companies’ deliberately curated public images as environmental stewards and good neighbors (though they don’t see it that way). The company's are advertising promises to pay their own way and build new sources of clean power, but here, they’re actively fighting legislation on those very topics.
Data centers are hiking energy rates for everyday customers, consuming vast quantities of water and electricity and driving demand for power so high that in the coming years, experts warn of blackout risks and supply gaps.
“This issue is not going away,” said Zach Baker, regional state and policy director for the nonprofit NW Energy Coalition, a clean-power advocacy group. “This is probably the largest power-sector issue we have right now.”
The sweeping data center package in Olympia remains in play during the dwindling weeks of the legislative session. But Big Tech lobbyists and allies knocked out many of the measure’s teeth along the way. Not only are they looking to whittle down House Bill 2515 even more in the coming days, but they’re also going for the throat, hoping to eliminate the bill entirely.
Battles like this are sure to play out across the country, at a time when public sentiment is shifting against the data centers. Some states, like Washington, are looking to rein in the industry, while others have proposed temporary moratoriums on all new projects.
All the while, tech giants are committing to an all-out lobbying blitz at the state and federal levels, carving up legislation aimed at their investments.
Lawmakers in Washington will continue to debate the data center package in the coming days. Even if it survives, the bill is sure to resemble a fraction of its former self.
House Bill 2515
Washington, like much of the country, must contend with a fast-dwindling energy supply and emerging cracks in the power grid’s reliability. All of this is further complicated by the growing number of data centers. The state ranks 10th in the number of facilities it hosts.
After a 2024 Seattle Times and ProPublica investigation on clean energy and economic impacts from the state’s data centers, Gov. Bob Ferguson convened a working group last year to scrutinize the industry’s ripple effect on Washington’s economy, tax revenue, energy use and environment.
House Bill 2515 (and a companion piece in the Senate) followed this year, including some of the working group’s recommended changes within the proposal.
As originally written, the bill would have required public and private utilities to propose a new set of tariffs for data centers, which would effectively translate to higher electricity rates for the facilities. The idea would be to ensure data centers pay for any new grid infrastructure they require to meet their massive energy demand and to offset any bill increases the industry’s rapid growth might otherwise thrust onto regular ratepayers.
In addition, the measure included a flat fee — half a penny for every kilowatt-hour of energy used — which data centers would pay toward low-income bill assistance, weatherization projects and artificial intelligence education programs. The bill also included transparency requirements, mandating sustainable reporting on water and chemical use. It would ensure data centers take power cuts during energy shortages before more critical customers like hospitals. And it would require 80% of their power to come from newly built clean energy sources.
These amount to simple and commonsense regulations to a rapidly growing industry with such an outside impact on Washington, Baker said.
Others, like Jeremy Takala, a council member with the Confederated Tribes and Bands of the Yakama Nation, support the measure because it moves to protect consumers on and off tribal lands, alongside the environment and species like salmon and steelhead.
Lobbying
On its face, much of the bill seems to coincide with Microsoft’s public position. Microsoft President Brad Smith wrote on social media earlier this year that the company will “pay our way” and ensure data centers don’t raise electricity prices. Among other things, Smith also promised to collaborate with utilities to add electricity that the company will need and to become more transparent about the resources it uses.
But privately, the company is lobbying against portions of the bill focused on these topics.
A copy of the bill obtained by The Times shows comments and suggested language from Microsoft lobbyist Lauren McDonald. She moved to strike or water down language that might lead to higher rates from utilities, citing a “fundamental concern” with the “prescriptive nature” of the requirements.
In her comments, McDonald argued utilities already have the authority to set rates and avoid rising costs for ratepayers. Specifically requiring new tariffs for data centers would remove flexibility and yield “unintended consequences” in the future.
The lobbyist also argued against the provision to require data centers to be largely powered with newly built renewable energy sources rather than drawing power from the limited grid supply. McDonald said this rule would effectively ban new data centers in the state.
Microsoft representatives don’t see much daylight between Smith’s promises and the actions of their lobbyists.
Microsoft agrees with the intention of this bill. We are committed to paying our way for new energy infrastructure, expanding clean electricity generation, replenishing more water than we use, and keeping datacenter communities informed," a company spokesperson said in an emailed statement. "But when it comes to the specific language within the bill, the details very much matter.
Another tech giant weighing in on the bill is Amazon Web Services, a lobbyist for which pushed hard for Republican lawmakers to propose a pair of amendments, according to an email between the groups obtained by The Times. Those amendments, accepted by the House committee, watered down portions of the bill enough for lawmakers to take them as a compromise and keep the bill alive. This also enabled the AWS lobbyist to withdraw his active opposition to the measure and change his stance to “neutral.”
But this lobbyist apparently didn’t communicate his strategy with allies or the rest of the Republican caucus. And his work kept the bill in play rather than allowing it to die on the vine, which many would have preferred.
This back and forth with AWS’s lobbyist so frustrated House Republicans that in the email, House Minority Leader Drew Stokesbary, R-Auburn, called the tactics “lobbying malpractice,” saying members of the caucus felt used. He refused to work with the organization further, adding that the lobbyist’s behavior even imperiled the party’s relationship with Amazon as a whole.
Amazon representatives did not provide a comment on the saga as of Friday evening.
Dan Diorio, vice president of state policy for the Data Center Coalition, said the legislation would amount to death by a thousand cuts.
Lawmakers behind this bill seem to want to constrain the industry’s growth or push it out of Washington entirely, Diorio said.
Tech companies and data center operators want to do the right thing, Diorio said. But they don’t want regulations mandating their actions, especially those the industry perceives as overly prescriptive or inflexible.
In essence, lawmakers will have better luck using the carrot rather than the stick (or “hammer,” as Diorio put it).
And these companies are going to heavily scrutinize whatever new regulations lawmakers propose now and in the years to come, he acknowledged. They want to maximize their investment.
“I mean, billions of dollars of capital, right?” Diorio said, referencing all the money tech companies are pouring into the data centers. “You’re going to be protective of it.”
What’s next?
So far in the negotiation process, lawmakers have agreed to cut out the per-kilowatt-hour fee and a section that would allow utilities to deny data centers service if their electricity demands would exceed supply, said Baker of the NW Energy Coalition.
Much remains in the crosshairs for data center groups, however. Heavy debate continues over requirements for data centers to cut power during energy shortages, build new electrical projects to fuel their demand, boost transparency for resources they use and buy greenhouse gas allowances under the state's Climate Commitment Act.
State Sen. Sharon Shewmake, D-Bellingham, who supports the measure, said she’s disappointed in the amount of text that has been removed from the bill, though much remains that would help regulate the industry and protect consumers and the environment.
The House passed the whittled-down bill earlier this month, and it’s now before committees in the Senate. For the legislation to survive, it must pass through the chamber by March 6.
Seattle Times staff reporter Shauna Sowersby contributed to this report.
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