Washington state’s data center regulation bill stalls 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 appears to have stalled.

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.”

The bill 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.

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 President Brad Smith in early February said the company shared the “intent” of the legislation, but not all of the specifics. The company in January launched a community-focused initiative pledging to be a good neighbor in the communities where it had data centers.

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 to protect Washingtonians from higher electricity prices, grid blackouts, and environmental impacts,” 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.”

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