ORIGINAL REPORTING: All About The Microsoft-Black Hills Energy Data Center Tariff
How Microsoft and a Wyoming utility designed a data center tariff that works for everyone; Collaboration on corporate rate design makes Black Hills Energy 'a banner for what utilities should be,' software execs say
Herman K. Trabish, Dec. 20, 2016 (Utility Dive)
Editor’s note: Deals between utilities, corporate offtakers, and state regulators to create pathways for more renewables continues to accelerate.
Utilities’ big corporate customers, and especially data centers, are getting more of what they want by respecting one of their utilities' most important concerns: Do no harm to other customers. An example is the new tariff collaboratively designed by Microsoft and Wyoming utility Black Hills Energy. As approved by the Public Service Commission of Wyoming, the Large Power Contract Service (LPCS) (Record Number 14242) will save the company money, save the utility’s customers on their electricity bills, and deliver the power Microsoft wants at its data center in Cheyenne. It's not a "green" or renewable energy tariff, as tech companies often seek, but it could be a template for utility-customer partnerships in other parts of the nation and end up helping wind and solar all the same.
Microsoft Director of Energy Strategy Brian Janous worked closely with the utility. He said the challenge was to design it to address one Microsoft’s growth on the system in a way that would protect the rest of the ratepayers. Microsoft always builds a megawatt of onsite backup generation for every megawatt of grid-supplied electricity consumed at its data centers. Growing power needs from anticipated expansion at its Cheyenne facility led both the utility and the tech giant to begin thinking about the need for new generation. Black Hills Energy President and Chief Operation Officer Linn Evans made the solution seem simple. It was an agreement that gives the utility access to Microsoft’s backup to meet utility peak demand needs and allows the utility to purchase power from the market on Microsoft’s behalf at a firm price to meet their energy needs… click here for more