Data Centers & the Co-op Difference
Lately, I have frequently been asked the same question about data centers. Before I reveal the question and hopefully answer it, let me say this: Nothing in this article should be considered an endorsement of a data center. Whether Douglas County wants 1 is a much bigger community discussion involving land use, water, jobs, taxes, and environmental impacts. Those are important conversations, but they aren’t my lanes.
The question I keep getting is simple: “If a data center came to Douglas Electric Cooperative, would it make our electric rates go up?”
My honest belief is no, and here’s why.
A data center would operate under a long-term contract. We would know exactly how much electricity it plans to use, and we would buy that power specifically to serve that load. We would receive the bill for that power, and the data center would pay it.
It wouldn’t reduce the Bonneville Power Administration’s allocation that serves our existing members. They would continue to receive the same affordable, reliable BPA power they receive today.
The data center would pay for any new infrastructure needed to serve it and pay its fair share of operating the cooperative. Our members wouldn’t subsidize those costs.
Another advantage is that Douglas Electric has a lot of fixed costs. We have poles, wires, substations, transformers, trucks, equipment, and the employees who keep the lights on. Those costs don’t change much whether we sell a little electricity or a lot.
Right now, the cost of running Douglas Electric is spread across the electricity our members use. A moderately sized data center could add a significant amount of new electricity sales it pays for. Those additional energy sales help pay for the same poles, wires, substations, trucks, and employees we already have. That means more of the cooperative’s fixed costs are being shared instead of being paid only by our existing members.
In fact, several Oregon electric cooperatives that serve data centers have lower electric rates than cooperatives that don’t. That’s not an opinion. It’s simply a fact.
Again, this isn’t an endorsement of data centers. It’s simply my answer to a question about electric rates.
If a large new customer ever comes to Douglas Electric, my responsibility is to make sure it pays the full cost of serving it and doesn’t shift those costs onto the members who own this cooperative.
That’s the cooperative difference.
Sincerely,
General Manager Keith Brooks