Data center operations flock to central Washington

Cheap hydroelectric power and a stable climate have data center developers following Microsoft, Yahoo and others to the Pacific Northwest.

In the last 18 months, at least five companies, Microsoft, Yahoo, Ask.com, Intuit Inc. and Sabey Corp., have bought up large swaths of land in central Washington state on which to build large data center operations.

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What's the attraction? Cheap hydroelectric power, temperate climate and relative safety from natural disasters top the list.

Take Sabey Corp. Last year, the Seattle-based commercial development company specializing in data center construction and leasing bought 30 acres in East Wenatchee, Wash., a small city in central Washington near the Columbia River. The company hopes to have permits in hand in the next month to build two 188,000-square-foot Tier 3 data centers that will provide 150W per square foot of power. Each building can accommodate between one and three tenants. Sabey hopes to have the facilities ready for occupancy by January.

The price of power

Like the family friend in "The Graduate" who tells Benjamin Braddock (Dustin Hoffman) "just one word: plastics," John Boyd, president of Princeton, N.J.-based The Boyd Company, a data center site selection company, preaches electricity costs to his customers.

"Well now it's power, power, power in the site selection for data centers," Boyd said. "The facilities cost as a percentage of IT budget over the years has been 3%, 4%, 5%. They're rapidly rising to 10% and can exceed 10%, and the major driving in that increase has been power costs."

That bodes well for the state Washington. The average industrial electric rate in the U.S. was 6.2 cents per kilowatt hour in February, according to the U.S. Department of Energy, and some areas are more than double that. But Sabey will be paying 1.85 cents per kilowatt hour. That's basically an unheard of price nowadays -- even less than what Iceland might offer for backup data centers.

"It's some of the least expensive power in the country," said John Ford, director of technology real estate for Sabey. "The other thing is that the power is hydropower from dams built in the 1940s and 1950s, so it's all renewable energy."

Sabey decided to build in East Wenatchee shortly after Microsoft bought 75 acres in nearby Quincy, Wash. Yahoo, Ask.com and financial software company Intuit Inc. have also snatched up large chunks of land to build data centers near the Columbia River.

Geographically 'boring'

There are reasons other than cheap power for moving a data center to central or eastern Washington. Dick Larman, the state's managing director for business and project development, said the area has plenty of cheap real estate and is "boring as far as geologic events." While Seattle gets plenty of rain during the year, Larman said east and central Washington are fairly dry, and so flash floods aren't a concern.

The rush to central Washington began about a year ago, Larman said, but the foundation for it was really built at the turn of the century. The state invested in the area, building an $11 million data center in Quincy, but it was right around the time of the dot-com bust, and so it sat empty. Then Yahoo came and took some of the space.

"That was the beginning of people noticing that something was going on," Larman said.

Sabey's Ford said the area also has year round temperatures that don't fluctuate much but are cool enough for data centers to use. He estimates that the data centers Sabey is building will be able to use air-side economizers, also known as outside air or free cooling, for about 60% of the year. Air-side economizers typically include a sensor and filter that allow outside air to enter the data center when conditions, such as temperature and humidity, are appropriate. When this happens, CRAC units can be shut off or used infrequently, saving the data center even more in power costs.

There are concerns that air-side economizers could let in contaminants that could damage equipment, but researchers at the Lawrence Berkley National Laboratory found that, if done correctly, using air-side economizers in the data center can save money and won't damage IT equipment.

Still, central Washington isn't for everybody. If your company has its headquarters on the East Coast, setting up a data center in the Pacific Northwest just might not be for you.

"With the East Coast companies, it just hasn't occurred to them yet," Larman said. "We are in the northwest corner of the United States and we're still not thought of every day."

Boyd added that all five companies building big data centers in central Washington are based in the same region of the country.

"That's another backdrop," he said. "If you look at the headquarter locations of Microsoft and Yahoo and Ask.com, they're in northern California or the Pacific Northwest, so their moves were regional in nature. It wasn't a geographical leap for them to do this."

Last but not least, there is a ceiling to how much can go in central Washington, Boyd said: "There is a finite amount of power being generated by those hydroelectric cooperatives."

Let us know what you think about the story; e-mail: Mark Fontecchio, News Writer.

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