Grant PUD reduces penalty for Microsoft

EPHRATA - Grant PUD commissioners agreed in  a 4-1 vote to help waive the full amount of a $217,000 penalty for Microsoft for incorrectly projecting its power use.

The commission met Saturday.

This year, the company "used slightly less power" from the PUD "than originally estimated," according to a letter written by Darrell Amundson, Microsoft's data center manager, to commissioners.

The commission's action stopped Microsoft from rapidly increasing power use to meet its estimate and avoid the penalty, which "would actually be commercially unproductive and seems unnecessarily wasteful of this valuable resource," Amundson wrote.

"Microsoft must make the decision on continuing to burn $70,000 worth of power in the next three days," he stated. "By staff estimate, Microsoft could incur approximately $70,000 in power costs to avoid the $210,000 penalty, resulting in a real savings of $140,000."

The company operates a data center in Quincy and in part, underestimated its projected power use due to construction issues, according to Amundson.

The company started an expansion in 2010 and continued work there this year, according to a January Columbia Basin Herald article.

The motion approved Saturday gave the district's general manager, Tim Culbertson, the authority to negotiate with Microsoft to avoid the "full impacts" of the penalty, provided the district is kept whole.

Commission President Randy Allred voted against the motion.

He asked how many other customers were in a similar situation, expressed concern about the costs, and said it "baffled him" a server farm could be that much off.

Culbertson said there was one other customer who would not come in at their projections.

Allred said if they help Microsoft, the PUD sets a precedent.

Because the facts are so unique and specific, the district's attorney, Mitch Delabarre, said he didn't think it created an obligation for anyone else.

Commissioner Tom Flint said he would be more inclined to make some sort of accommodation.

Commissioner Terry Brewer agreed, saying it seems "rather bizarre" they would want to see a customer waste money to avoid a penalty, he said.

At the end of the meeting, Brewer said the intent of their motion was to allow Microsoft to shut off its heaters burning the power.

Amundson agreed to have it done immediately.