Updated to reflect passage of New Large Data Center Load Policy in July 2026
Across the country, the growth of artificial intelligence (AI) is contributing to a rapid increase in data center development. This trend raises questions about the financial and environmental costs involved and who bears those costs. City Light is responding with a proposed policy approach to ensure that large data center loads are managed in a way that protects existing customers and the grid we all share.
Our Grid Is Under Pressure
Because data center demand could grow exponentially without policy constraints, it introduces uncertainty into our load forecast and adds pressure on grid infrastructure.
Electricity demand in the Seattle area has been relatively flat for years. However, we expect it to rise as more residents and businesses shift to electric vehicles and transition from fossil-fuel-based heating and cooling to electric alternatives.
Meeting growing demand will require real investment in clean energy resources, transmission, and grid upgrades. This raises broader questions about local resource impacts, including effects on electricity demand, water use, and how those costs should be distributed.
Serving large new loads can require expensive wholesale power purchases and major infrastructure investments. To ensure new or expanding large data centers bear their own energy and infrastructure costs, rather than shifting them to other customers, we proactively updated our rate policies.
Our existing customers, residents and local businesses, have funded this system over decades. They will not absorb costs associated with new large business customers.
How the Large Data Center Policy Works
The policy applies to data centers requesting new or expanded electric service equaling 10 megavolt-amperes (MVA) or more, roughly equivalent to powering 2,000 homes.
The policy includes:
- New rate class: Rates for these data centers are higher than rates for other customers, as they reflect the incremental cost of procuring and delivering the additional power supply needed to serve them.
- Cost responsibility: Data centers that fall under this policy must sign a service agreement accepting full financial responsibility for the infrastructure and related costs for the life of the contract.
- Service queue: Service is only provided once the necessary power supply and infrastructure are in place.
- Required curtailment: These data centers are required to invest in conservation and demand-response measures, including reducing energy use during periods of peak demand.
Public Response and City Action
When news of potential large data center projects in Seattle surfaced, the reaction was swift. Mayor Wilson and the Seattle City Council received thousands of emails from residents, the vast majority opposing new data centers. That response prompted action. The City Council has passed a one-year moratorium preventing the siting of data centers in Seattle that use more than 20 MVA.
During this period, the Council will study the impacts of large data centers on City infrastructure, utilities, land use, public health, and the local economy. A companion resolution calls on the Mayor’s Office to coordinate with City departments on the policies, legislation, budget actions, and other steps needed to guide future data center activity in Seattle.
Our New Large Data Center Load Policy was adopted, and effective immediately, as part of our rate ordinance in July 2026. While the Council’s ban applies to large data centers within Seattle city limits, our policy applies to our entire service area, which includes parts of Burien, Tukwila, SeaTac, Shoreline, Lake Forest Park, Renton, Normandy Park, and unincorporated King County.
Preparing for the Future
Reliable, sustainable, and affordable electricity is essential to protecting our planet and advancing the technologies and industries that support our region’s economy and future. The landscape we operate in will continue to shift, bringing new challenges. Our responsibility is to anticipate those challenges, identify opportunities, and act. The New Large Data Center Load Policy is a first step in managing our finite resources on behalf of the community we serve.