from Watts Up: July 2026

Manager’s Message: Our take on the data center conversation

This article was originally published in our July 2026 Watts Up E-newsletter. To read the full newsletter click here.

By MELISA GARCIA

CEO/General Manager

The talk of the town lately seems to be focused on data centers. Of course, that’s not only true here in the OPD5 service territory, but in communities all across the country. With AI’s ever-growing hunger for processing capacity, Big Tech companies have an urgent need to expand. They are considering any and every location they can for a data center, rural and urban alike.

Addressing the rumor mill
Rumors have been circulating locally that developers are scouting our communities for sites to build new data centers. There have even been press releases circulated which seem to hint that data center construction in our territory is imminent. Concerns have been expressed about the local resources that these facilities will expend and the cost that may bleed over to local residents. So I would just like to address some of these rumors.

In recent months, OPD5 has indeed been inundated with requests and interest from data center developers. We are not unique in that regard. Nearly every other small rural utility across the country has been fielding similar interest.

As these developers have come to OPD5, we have entered conversations with them – as it is our obligation to do. But as of now, we have entered NO agreements to serve any of these entities. It is still all talk and ideas at this point; no firm commitments. And with ventures like this, we’ve learned not to count any chickens until they hatch with money and a signed contract.

Since many other small electric utilities are in the same boat, we are all banding together to watch this situation very closely. We communicate regularly with one another as well as with elected representatives, state agencies and other policy makers. In these conversations, we openly discuss concerns, share success stories and learn from common mistakes. This has been tremendously helpful in paving a path forward.

The dilemma of change
It is likely that most of the interest we have received from data center developers will go no further than the initial conversation. But even if one or two of them do move forward it would be a game changer.

Such a facility would bring tremendous change to OPD5. The peak power use for our entire system is currently about 125 megawatts. That serves everyone in both valleys on our hottest summer day. But we have talked with developers floating the idea of bringing facilities requiring as much as 600 megawatts. That is a huge impact to plan for!

A new load of that size raises questions about how to secure adequate energy resources on the market, how to provide sufficient infrastructure to efficiently distribute those resources, what upgrades to transmission capacity are needed and many more. The staggering logistics in this level of planning will require a fundamental change in how we have done things in the past.

What doesn’t change
Despite all of the complexity posed by data centers coming to our territory, there are some things that remain simple. Some things would not change.

Throughout our history, OPD5 has been guided by the principle that growth must pay for growth. Sometimes as elements in the community have craved growth, and the incentives needed to bring it, policies built on this principle have been unpopular. Nevertheless, we have stuck to those policies. Now more than ever we must continue that course.

Though the power needs of data centers may be at a magnitude we have never seen before, they are really no different than any other industrial load that comes to town. As it always has been, if a new facility asks to be served power, they must fully absorb the impact. They are required to pay for all new infrastructure needed to serve them. They must also pay the full cost for additional power resources that they need.

Our board has already made it clear that any new requests exceeding a 10 megawatt load, served at transmission voltage, will be ineligible to reap the benefit of our legacy hydropower allotments. Those old hydro contracts have benefited our existing ratepayers since 1935. They have helped keep rates low for the customers who have, all along, participated in the construction and expansion of our system. Existing customers should not have those benefits erased by a large-load customer suddenly coming in now. So all of the new load for a data center will be contractually obligated to a market contract for energy. That’s only fair.

This is just one example of our approach. Other policies that further protect existing customers from these impacts are in the works and will be brought to our board in the near future.

The OPD5 role
It is important to note that OPD5’s role in what comes to our community is limited. There are many considerations, other than power, that must be decided. Things like land use planning, zoning, water resources, transportation concerns, environmental regulation, air quality, noise control, site design, building permits and countless other elements are not in the realm of OPD5’s control. These are determined by other civic entities through a public process.
OPD5’s role is the same as it has always been: to serve safe, reliable power to our communities at the lowest reasonable cost. If our community leaders decide they want something requiring a large power load, and if it is being approved through all appropriate channels, it is OPD5’s obligation to provide it with power. That’s what we do.

For ninety years now, OPD5 has always stepped up to serve new customers. But we have also always upheld strict conditions and clear policies that have kept existing residents whole. Every time a new ‘biggest customer’ has come to town we have held fast to that principle. And we pledge to stay that course in the face of whatever new challenges may come.