Why data centers are part of the solution for our power grid | Opinion

In a recent guest column, Rick Dunn, General Manager of Benton PUD, laid out a characteristically sharp and highly accurate assessment of the power supply constraints facing large-scale data center proposals in the Tri-Cities.

Rick’s analysis of Washington’s Clean Energy Transformation Act (CETA) and the Bonneville Power Administration’s (BPA) New Large Single Load (NLSL) restrictions is spot on. However, the current public dialogue surrounding data centers often frames them as a threat to our power resources or an exacerbation of our grid’s challenges. I would like us to consider a different perspective – that these developments can be a valuable partner in modernizing the grid.

To be clear, I’m not advocating for or against data centers. I think our local and state agencies must ask important questions to determine if they are right for our communities. My expertise is in electric utility operations and power supply. It is from that perspective that I offer my opinion.

As the CEO of Benton Rural Electric Cooperative, my responsibility is not to just plan for today, but for generations to come. It’s also my responsibility to be sure we can provide safe, reliable power to our membership while supporting community and economic development. It’s no secret that our electrical system is outdated and much of our equipment is reaching the end of its useful life. The cost to bring it up to today’s standards is immense.

What keeps me up at night? I have a family to support, just like most of you. My kids are in their 20’s, building their lives, and trying to make ends meet in an expensive, electrified world. How can I meet the safety and reliability expectations of our membership and keep costs manageable for people who are just trying to pay rent or mortgages, get dinner on the table, run a small business, and keep the kids on track.

As a CEO, I am forced to think differently – far into the future. Instead of seeing data centers as a challenge, perhaps we embrace the historic opportunity they offer. As multi-billion-dollar partners, they are prepared to invest alongside us to strengthen, expand, and modernize the grid.

Rebuilding a Legacy: From DSIs to Tech Partners

To understand where we are going, we have to look at where we came from. The robust Pacific Northwest generation and transmission grid we enjoy today was not built by residential ratepayers alone. It was largely constructed during an era when large industrial customers—specifically BPA’s Direct Service Industries (DSIs), such as aluminum smelters—bore the financial weight of the build-out.

Today, the energy landscape has shifted:

Aging Infrastructure: The very assets we inherited from that mid-20th century industrial boom has reached or exceeded the end of their useful lives. They are operating at capacity and require massive capital to be replaced and expanded.

Rising Costs for Families: If we do not find new industrial partners to share the burden of this modern grid build-out, the immense costs will fall directly on existing ratepayers in the form of rate increases.

A New Breed of Partner: The heavy industries that helped build our initial grid have largely disappeared. Data centers are the modern equivalent, possessing the capital and the long-term horizons necessary to anchor the next generation of grid infrastructure.

The Proof is in the Data: Mitigating Rate Increases

The concern that large loads inevitably drive up rates for everyone else is common, but recent independent research suggests otherwise. A comprehensive study by the energy consulting firm Energy + Environmental Economics (E3) analyzed the financial impact of data centers on utility systems.

The E3 study found no historical evidence that data centers drive up residential electricity rates. In fact, the opposite is true: because data centers represent high-utilization, predictable, around-the-clock loads, they allow utilities to spread fixed system costs—like maintaining poles, wires, and substations—across a much larger volume of sales.

According to E3’s analysis, a typical data center can generate millions of dollars in net surplus revenue for its host utility beyond the cost to serve it. This surplus does not vanish; it actively offsets the utility’s broader revenue requirements, creating downward pressure on rates and shielding residential customers from the rising costs of inflation and grid modernization.

Spurring Innovation: Funding Clean Energy and Nuclear

Rick correctly points out that serving always-on data centers with intermittent wind and solar is exceptionally difficult, if not impossible, and notes that the ultimate solution in our region may rely on new nuclear power.

But where will the massive capital required to commercialize advanced nuclear, geothermal, and long-duration storage come from? It is not coming from local utility ratepayers.

Instead, the technology companies operating these data centers are currently the world’s largest private funders of advanced clean energy technologies. Tech sector investments are driving the viability of small modular reactors (SMRs) and next-generation deep geothermal systems. By welcoming these entities as partners, we bring their immense financial backing directly to our regional energy challenges.

A Consistent, Safer Model: The Benton REA Approach

How do we safely capture these benefits without exposing our members to financial or operational risk? We do it by implementing strict, protective utility policies.

Benton REA has been consistent in this approach with every data center, or other large load, that has approached us. Our board-adopted hyperscale policy is designed specifically to shield our communities:

Data Centers Pay Their Own Way: Existing members do not pay a single dime for project-specific infrastructure or power supply. The requesting data center must contractually bear all costs, system upgrades, and financial risks.

Protecting the Dams: By requiring these large loads to procure and fund their own dedicated power supplies, we completely bypass any added risk to the BPA federal system or our regional dams.

Rigorous Engineering Reviews: No project moves forward without exhaustive engineering and power supply evaluations to ensure local reliability is never compromised.

This model turns what could be a strategic hurdle into a structural advantage, utilizing private investment to strengthen our local cooperative system.

Growing Together

I want to be clear: my expertise is in utility operations and power supply. I am not an expert on water mitigation, land-use zoning, or the non-power localized issues associated with large-scale developments. Our local and state agencies must ask hard questions, conduct thorough reviews, and ensure any project aligns with our community’s values.

When we scroll through social media or read local headlines, there is an obvious tendency to focus on worst-case, nightmare scenarios. These sensationalized narratives often obscure the practical, day-to-day truths of how modern utilities actually manage and benefit from growth.

From a grid perspective, we stand at a crossroads. We can view the clean energy transition and our aging grid infrastructure as an insurmountable, expensive crisis—or we can view data centers as the massive, willing capital partners we need to solve these challenges.

By utilizing robust partnership frameworks, we can protect our existing members, preserve our low-cost hydropower, and build a more reliable, carbon-free grid for the next generation. Let’s not close the door on the very partners who can help us pay for it.

Ryan Redmond is CEO of Benton REA.