In our recent discussion of the uncertain future of Washington state's tax incentives for data centers, we wondered whether the tax breaks were big enough to bust the economic model that has drawn so many companies to build data centers in central Washington. The primary lure of Quincy and nearby towns is cheap hydro power from the Columbia River, which offers a significant savings compared to many traditional data center hubs.
Greg Fennewald, senior director of data center strategy for Ask.com, discussed the economics of power at last week's meeting of the Grant County Economic Development Council. Fennewald spoke about why his company decided to locate in Moses Lake, Washington, where it opened a new data center in December. The savings on electricity, he said, are "quite significant."
"When our place is full, it's going to need about 4,000 kilowatts pretty much flat 24-7," said Fennewald. "That's going to cost about $70,000 a month. To have the same amount of demand in a higher energy cost place like Manhattan or San Francisco, over $300,000. That's a lot of money, and that's per month, so take that times 12, big bucks. There's some good reasons why you see folks going to Quincy, Wenatchee and other places within a 150-mile radius of here. There's a lot of things this area has to offer."
Yahoo and Microsoft have both halted construction on their multi-facility data center campuses in Quincy while state legislators debate a tax break. The difference from the scenario described by Ask.com is that Microsoft and Yahoo are not making cost comparisons with New York or San Francisco, but more likely with Oregon and Iowa, which are more affordable across a range of cost factors.