(The Center Square) – The Spokane City Council imposed a one-year moratorium on new data centers on Monday after Avista Utilities announced a pause in negotiations with an unnamed large load customer.
The officials deferred the proposal last week after Councilmember Paul Dillon attempted to push a vote days after introducing the moratorium. Councilmember Michael Cathcart, the lone conservative on the dais, was the only vote against it Monday, citing potential impacts to the Spokane aerospace tech hub.
The pause follows nationwide concerns that taxpayers could be left paying for infrastructure to support data centers and industries requiring large amounts of water and electricity. However, the projects also offer economic benefits that Spokane risks missing out on, even if they’re sited outside the city limits.
“I don’t believe that we should be taking steps that undermine the potential and substantial economic development opportunities that we have,” Cartcart said Monday, referring to the tech hub years in the making, “but I also understand that there are a lot of unknowns when it comes to other data centers.”
An amendment from Councilmember Zack Zappone narrowed the moratorium to avoid impacts to the tech hub, but Cathcart argued that it didn’t go far enough to protect regional aerospace investments.
While Cathcart raised concerns about targeting data centers rather than every user who requires large amounts of resources, he said the pause would’ve got his vote had it explicitly exempted the tech hub.
Cathcart said anyone who uses social media and cloud-based services contributes to the demand for data centers, even if they oppose artificial intelligence. Residents who testified were largely in support of the proposal, with Dillon and others arguing that it provides time to create a regulatory framework.
Avista paused discussions with an unnamed developer considering building a data center in the region after Dillon proposed the moratorium. Rumors are spreading about potential locations, but it’s unclear where the facility might land, and the city could still end up providing water if it’s outside of city limits.
“Spokane holds one of the largest municipal water rights in the region, and potentially has the only system with the capacity to handle this,” Katelyn Scott, a “water protector” with Spokane Riverkeeper, testified during Monday’s meeting, “that makes long-term planning and precaution even more critical.”
Cathcart has warned that if the project lands in unincorporated Spokane County or other municipalities, the city could face the same environmental impacts, without benefiting from the additional tax revenue.
Dan Diorio, vice president of state policy for the Data Center Coalition, told The Center Square that his industry is “fully committed to paying our full cost of service for electricity.” New technology is making them more efficient, and Dirorio argues that other industries and municipal leaks use more water.
He cited studies suggesting that data centers contribute nearly $2 billion annually in taxes and other economic benefits to Washington state. Diorio said moratoriums in Seattle and Spokane, paired with state Democrats eliminating data-center tax incentives, could push the industry to friendlier states.
“We strongly urge lawmakers to focus on tariff provisions that make the most sense, that are based on best practices that’ve been successful,” Diorio said, referring to a proposal that would’ve created safeguards around data center projects and resource consumption had it not stalled earlier this year.
He argued that House Bill 2515 could have been improved and said his coalition remains committed to finding policies with legislators that include “realistic operational conditions” and ratepayer protections.
Zach Baker, regional and state policy director for the Northwest Energy Coalition, wants lawmakers to return to HB 2515 to provide some assurances. He cited data suggesting that Washington data centers could require additional electricity by 2030, comparable to the needs of four cities the size of Seattle.
“The bottom line is that there needs to be a comprehensive package of guardrails, whether that’s one individual package or multiple bills, but things are moving so fast with the growth in data centers that there’s no time to waste on taking action here,” Baker told The Center Square in a Monday interview.