Avista Pauses Talks Over 500 MW Data Center Power Request After Community Pushback

Avista Corp. has paused negotiations over a potential 500-megawatt data center load in Washington, slowing an early-stage process that had drawn scrutiny from local residents and officials concerned about electricity demand, water use and the lack of public details around the project.

The Spokane, Washington-based utility said Friday it is taking more time to evaluate energy requests from new large data center developers while seeking to work with government agencies on a more coordinated planning process. The company said the pause follows community interest and concern related to a previously announced memorandum of understanding with the developer.

“We’ve heard the questions and concerns from our customers, community members and local leaders, and we take that feedback seriously,” Avista President and Chief Executive Officer Heather Rosentrater said in a statement. She said the feedback showed a need for “a broader coordinated planning effort” and that the company needs more time to align with partners and communities.

The pause marks a quick reversal in tone after Avista disclosed in a May 29 securities filing that it had entered into a non-binding MOU with an unnamed large-load customer in its Washington service territory. The customer was seeking an initial 125 MW of electric demand starting in 2029, with a pathway to expand to 500 MW by 2032, subject to further evaluation, regulatory review and definitive agreements.

Avista did not initially identify the customer or the type of project in the filing. Local reporting later confirmed the proposed customer was a data center developer, and Avista has continued to withhold the company’s identity and the proposed location, citing the terms of the agreement.

The scale of the request quickly became the central issue. A 500 MW load would represent a major addition to Avista’s system and has been described locally as equal to more than half the combined power used by residential and business customers in Spokane County. Avista has said the customer would be responsible for added costs such as new power supply, transmission upgrades and infrastructure required specifically to serve the project.

The prospect nevertheless triggered community opposition. A petition opposing data center development in Spokane cited concerns over electricity and water consumption, infrastructure strain, higher utility costs, noise, diesel backup generators and pressure on local aquifers. Spokane City Council members also moved toward a proposed moratorium on new data centers to give the city time to develop a regulatory framework for such projects.

Avista said Friday that no single entity can decide whether the project proceeds. As a regulated utility, the company said it is required to review service requests, while the developer would have to secure permits and any final energy service agreement would require state regulatory approval.

The company said its approach to any large data center request will be guided by four principles: existing customers should not pay the cost of serving a new large customer; reliability must be protected through engineering studies and system upgrades; final service agreements must receive regulatory approval; and large projects must deliver net benefits for customers.

The episode reflects a broader tension facing utilities as data center developers seek large blocks of power to support artificial intelligence and cloud infrastructure. For utilities, such customers can provide long-term load growth and help spread fixed system costs if structured properly. For communities, the projects have raised questions about whether local grids, water supplies and ratepayers can absorb facilities whose power needs can rival industrial plants.

Avista framed the pause as a step toward a more transparent process rather than a rejection of the project. The company said large data center developments involve multiple parties beyond the utility, including developers, infrastructure partners, regulators and local communities.

“What’s new now is the scale of the data center requests and level of public interest,” Avista said. “These unprecedented projects require new considerations for planning and coordination for all entities involved.”