The leader of a supercomputer hosting company planning to set up shop in Longview’s old water treatment plant claimed this week that Cowlitz PUD has “stonewalled” him, and he is threatening to move the project somewhere else if he’s not connected to the power grid by May 1.
“It’s frustrating,” MiningSky Inc. COO Eric Lundgren said Tuesday. “You get the support of the city ... you pass all these new rules to bring industry to town ... and then you have the PUD stopping that process.”
Cowlitz PUD General Manager Steve Kern responded that the utility is working as fast as it can and that some of the delay was due to uncertainty about how much power MiningSky plans to use.
“We’re nothing but incentivized to provide power here. That’s what we do,” Kern said Wednesday. “We like nothing better than to provide power to our customers if we can, but we have to do it in safe, reliable, credible ways per our rate schedules and per our policies.”
The City of Longview first announced in February that it planned to lease the old water treatment plant at 101 Fisher’s Lane, which was decommissioned in 2013 when the city moved its water source to the Mint Farm Industrial Park. MiningSky planned to establish its headquarters and first U.S. location in Longview and pay the city $10,000 a month in rent.
MiningSky estimated that its plan to host and package supercomputers for clients would be a $12 million investment and employ about 30 people.
Discussions between the PUD and MiningSky about reconnecting power at the old water plant began shortly after the city’s February announcement. To evaluate if it could provide up to six megawatts of electricity to a “point of delivery” near the facility, the PUD said it needed to conduct a site survey.
Kern said it was unclear for a few weeks how much power MiningSky was requesting, which delayed the site survey. Lundgren, on the other hand, said he wasn’t told that he had to sign specific paperwork to begin the process. The PUD disagrees and said it outlined the complete process for Lundgren in February.
The paperwork, signed on April 4, started the site survey and indicated it would take 30 to 45 days and required a $7,500 deposit. This is a typical timeline and price, according to Kern, who has worked for several other utilities. Lundgren said seven other PUDs charged him between $100 and $500 for similar site surveys and finished them in less than 15 days.
The PUD expects to have “preliminary” results from the site survey ready by May 1. At that time, the utility said it will have an idea of how much power it can provide to the site and when connection could happen. But Lundgren said he can’t wait that long.
“I have clients who have already shipped projects that need to be placed,” Lundgren said. “I’m being billed thousands of dollars in fees from clients for every day I don’t power them up.”
He added that employees have already started moving to Longview and the local hiring process has already begun, but he can’t put people to work without power.
MiningSky is currently finalizing a contract with Port Angeles for a second location, but Lundgren said if no progress is made in Longview by May, he will abandon this location and make Port Angeles the headquarters instead.
“I’m at a point where they’re telling me, for no reason, we’re not giving you an end date for when I can have power reconnected to the building,” he said. “This isn’t a new connection. … You do a quick site survey and turn back on the power. They’re not doing that.”
But reconnecting power isn’t as simple as flipping a switch, Kern said. For one thing, the water plant has not operated in five years.
And MiningSky is planning to use more power than the water plant ever did, according to the PUD. When the water plant was running, it used on average less than one megawatt of power for only part of the day. The facility was designed for a maximum of three megawatts, but the PUD said it had no records of that much use. MiningSky is considering using between three and six megawatts at all times.
In addition, using an existing facility for a different type of operation is a “squishy” situation because there are not as many known variables, Kern said. Most requests for power come from existing companies that want to increase their power or from brand new companies that are also building new facilities. In both of those cases, the companies usually know exactly how much power they want to use, Kern said.
Lundgren compared the amount of electricity he wants to use to that of what a couple office complexes would use. The PUD says if he used three megawatts, he would be one of the county’s top 10 clients, excluding major users Norpac, Nippon and KapStone. If he uses six megawatts, he would be in the top five users.
“If we take out our larger industrial customers and just looked at our remaining smaller load, the impact of him coming on from three to six megawatts is a jump in our system of a couple percent across our whole service territory,” Kern said.
Lundgren said that the PUD is “dragging its feet” due to a bias against the high-tech industry. He pointed to Longview’s history as an industrial town.
“If I was a paper mill or a smelter, then they’re used to that and I don’t think I would be getting as much pushback,” Lundgren said. “But because it’s tech, they don’t want to understand tech.”
Data centers have been booming all over Washington state, drawn by the region’s relatively inexpensive hydropower. This has prompted some discussion about the number of jobs these sites create for the amount of power they use.
The PUD and Longview city officials have both confirmed that MiningSky is not the first data center that has expressed interest in moving to the area.
However, Kern said it would not benefit the PUD to play favorites with potential business opportunities. It is up to the community, the permitting processes and local governments, not the PUD, to decide which businesses can operate in the area, he said.
“Our job is just to provide the power. That wouldn’t be right for us to try to filter what kind of load is coming here,” Kern said.
Kern, who seemed unfazed by Lundgren’s May 1 ultimatum, said he understood that time is money for businesses and that the PUD was “moving this forward and trying to get the information for him so he can make whatever commercial decisions he needs to make.”
Lundgren said he doesn’t want to leave Longview and will do everything in his power to stay, as long as he is connected to electricity by May.
“I have put enough money and investment (in Longview) to prove I am serious about my intent,” Lundgren said. “Nobody wants to pull out. We want to be able to build this and make it happen. But at the end of the day, it’s hard to run a tech company without electricity.”