Washington state’s data center regulation bill fails following pushback from tech industry

A Washington state bill requiring utilities and data center companies to create agreements that protect rate payers from increased power costs and brings transparency to the environmental impacts of the facilities has failed.

After weeks of wending its way through Olympia, the Senate Committee on Ways & Means did not take a vote on House Bill 2515, causing it to miss a legislative deadline.

HB 2515 had garnered support among Democratic lawmakers, while Microsoft and Amazon lobbied behind the scenes, the Seattle Times reported. The tide turned on Friday when Microsoft — which has roughly 30 data centers in the state — publicly came out in opposition to the bill.

“We respectfully urge the committee not to advance the bill without significant changes,” Lauren McDonald, Microsoft’s senior director of Washington state government affairs, said in testimony before the Senate committee. She described the legislation as “uniquely anti-competitive.”

HB 2515 garnered support from environmental groups, tribal nations, and ratepayer advocates warning that the rapid expansion of AI data centers risked driving up utility bills and straining limited water supplies.

“This bill is about fairness, grid reliability, transparency, and protecting our clean energy commitments. It’s easy for big tech to make big promises in a press release. But when states ask for accountability to those promises, their commitment evaporates,” said Rep. Beth Doglio, D-Olympia.

Opponents from the tech sector, labor and local municipalities that have benefited financially from the facilities said the developments support essential computing infrastructure, creates jobs and provides increased property tax revenue.

Across the U.S., leaders and communities at every level are worried about the harms posed by the surge in data centers that power the internet and AI — pushback that has reached the White House, where President Trump this week is convening major tech companies to pledge they would not drive up electric bills.

Microsoft in January launched a community-focused initiative pledging to be a good neighbor in the communities where it had data centers.

“We support the bill’s intent and will continue to work with lawmakers in the future on detailed policies that ensure accountability and transparency while expanding job opportunities and community development,” said a Microsoft spokesperson via email.

Proponents of the measure said that HB 2515 aligns with many of the climate pledges that big tech companies have made, vowing to use clean energy and offset their carbon emissions. They called the bill a necessary step to put rules in place for the booming data center sector.

“Lobbying by the tech companies killed the bill. And unfortunately, the Legislature let it happen, passing on a critical opportunity to put common sense guardrails in place,” said Zach Baker, policy director for the nonprofit NW Energy Coalition, via email.

Dan Diorio, vice president of state policy for the Data Center Coalition, on Tuesday highlighted the role played by the facilities, calling them the “essential digital infrastructure.”

“The data center industry will continue to partner with utilities, grid operators, and policymakers,” he said via email, “to advance the infrastructure needed for a reliable, affordable grid that supports economic growth for all customers.”

Doglio indicated she wasn’t giving up on the issue.

“The impacts of these facilities are real — on our power grid, our water resources, our greenhouse gas emissions and people’s utility bills,” she said. “The longer we wait, the greater those impacts will be. I remain committed to continuing this work.”

RELATED:

• Microsoft urges major changes to Washington data center regulations as bill nears final vote
• Washington state has embraced data centers – but now it’s looking to set terms of engagement
• ‘Meaningless’ theater? As tech giants pledge ratepayer protections in D.C., others question real-world impact
• Microsoft responds to AI data center revolt, vowing to cover full power costs and reject local tax breaks

Editor’s note: Story updated with comments from Rep. Beth Doglio and a Microsoft spokesperson.