The “Unbundled” Rate Strategy
Grant County PUD’s new rate strategy, approved in November 2025, creates a two-tier system:
- Core customers (residential, small business, agriculture) retain preferential access to the lowest-cost power generated by the PUD’s Priest Rapids and Wanapum dams — some of the cheapest electricity in the United States.
- Non-core customers (data centers, large industrial) must pay for power sourced from new, more expensive generation: solar, wind, and wholesale market purchases. The PUD projects total demand will exceed dam capacity by 2026.
This “unbundled” approach is unprecedented among public utility districts and directly targets the economic model that attracted data centers to Moses Lake in the first place: access to ultra-cheap Columbia Basin hydropower.
Why Moses Lake Became a Data Center Hub
Grant County has been one of the most attractive data center locations in North America due to three factors:
- Ultra-low electricity costs: BPA hydropower delivered through Grant PUD at rates far below market. Data centers were paying roughly 3–4¢/kWh — half the national industrial average.
- Cool climate: Eastern Washington’s dry, cool air reduces cooling costs for data centers.
- Water access: Columbia River water supply for cooling systems.
Microsoft, Yahoo, and other major operators built massive facilities around Moses Lake, transforming the agricultural community into a tech infrastructure hub. But the data centers’ insatiable demand is now outstripping the PUD’s generation capacity.
The National Data Center Rate Reckoning
Moses Lake is not alone. Across the US, utilities and regulators are creating targeted rate structures for data centers:
- APS in Arizona is proposing 30–45% data center surcharges.
- Dominion Energy in Virginia is creating a new GS-5 rate class with 85% minimum demand charges.
- Oregon’s POWER Act creates a dedicated data center rate class with 10-year contracts.
- Washington state legislature is considering legislation requiring data centers to pay full grid connection and infrastructure upgrade costs.
What This Means for Moses Lake Operations
- Budget for compounding increases: The 9.5% annual projection means electricity costs could roughly double within 8 years for non-core customers.
- On-site generation viability: Solar PPAs and behind-the-meter battery storage become increasingly attractive as PUD rates rise — especially given central Washington’s strong solar resource.
- Negotiate directly with BPA: Some large data centers may explore direct BPA contracts to bypass the PUD rate structure, though this typically requires building dedicated transmission infrastructure.
- Monitor legislative risk: Washington’s data center infrastructure cost allocation legislation could add further costs beyond the PUD rate increases.
Source: Grant County PUD Rate Resolution (November 2025); Columbia Basin Herald; GCJ News (Grant County Journal); GovTech; Grant PUD Financial Planning Documents.