Avista Utilities announced Friday that it has placed negotiations with a prospective 500-megawatt data center customer on hold, saying the company wants to achieve broader alignment with communities and policymakers before moving forward with what would be one of the largest energy commitments in the utility’s history.
The pause comes roughly two weeks after the agreement became public through a Securities and Exchange Commission filing on May 29, which drew immediate scrutiny from ratepayers and elected officials across the region. The potential customer’s electricity demand would exceed the combined power consumption of all residential and commercial accounts across Spokane County by more than half — a scale that quickly raised questions about grid capacity, water use, and the impact on existing customers.
Why Avista Hit the Brakes
Avista President and CEO Heather Rosentrater acknowledged the volume of concern that surfaced after the filing became public. “We’ve heard the questions and concerns from our customers, community members and local leaders, and we take that feedback seriously,” she said in the company’s announcement.
Jason Thackston, Avista’s senior vice president of growth, policy and external relations, was more direct about the decision-making: “There was enough feedback that it just warranted this pause.”
The company entered the nonbinding agreement with the unnamed large-load customer earlier this year. Under the terms of that agreement, Avista cannot disclose the identity of the prospective customer or reveal the specific proposed location, other than confirming it falls within Avista’s Washington service territory.
One property that has circulated in public discussion as a potential site is the former Kaiser Aluminum smelter in Mead, Washington, located at 2425 E. Magnesium Road. That 203-acre property currently houses Finnoe Design and Fabrication and is served by approximately 240 megawatts of existing Avista infrastructure. The property draws water from the City of Spokane and also has access to two industrial wells — water access being a key operational requirement for large-scale data centers. As of December 2022, the site’s power mix was roughly 59% renewable, broken down as 48% hydropower and 33% natural gas, with the remainder coming from wind, coal, and biomass sources.
Local Government Watching Closely
The Spokane City Council is weighing an ordinance that would impose a one-year moratorium on new data center construction within city limits — a direct response to concerns that rapid data center development could strain regional power and water infrastructure before adequate policy frameworks are in place.
For Avista, which has operated as a regional utility for more than 137 years, the situation represents a significant test of how the company manages the tension between economic development opportunities and obligations to its existing customer base. Large industrial energy customers are not new to Avista’s portfolio, but a 500-megawatt commitment at a single site would be an order of magnitude beyond typical large-load arrangements.
The broader debate carries direct implications for communities throughout the Inland Northwest, including Shoshone County, where industries like mining have long depended on reliable and affordable regional energy supplies. Any significant shift in how utilities allocate capacity — or how rate structures are designed to accommodate massive new loads — can ripple through industrial power users far from the data center site itself. Silver Valley mining operations, including activity at the Lucky Friday Mine and other area properties, rely on competitive industrial power rates that could be affected if large-load negotiations alter Avista’s long-term resource planning.
What Comes Next
Avista has not set a timeline for resuming or concluding negotiations with the prospective data center customer. The company indicated it intends to use the pause period to engage with customers, community stakeholders, and policymakers to develop a framework that addresses the concerns raised since the SEC filing became public.
The Spokane City Council’s proposed moratorium on data center construction is expected to continue advancing through the legislative process in the coming weeks, and its outcome could shape the conditions under which any resumed negotiations might take place. Whether the unnamed prospective customer maintains interest through an extended pause remains unknown.
Avista ratepayers, local governments, and regional industries will be watching closely as the utility navigates one of the most consequential energy development decisions in its recent history.