Avista puts data center negotiations on pause

Avista announced Friday afternoon that negotiations with a potential 500-megawatt data center customer have been "paused" to seek "broader policy and community alignment."

The announcement follows criticism from many in the community and an ordinance under consideration by the Spokane City Council calling for a one-year moratorium on the construction of data centers to build stronger regulatory frameworks.

"We've heard the questions and concerns from our customers, community members and local leaders, and we take that feedback seriously," Avista President and CEO Heather Rosentrater said in a news release. "This input has demonstrated a need for a broader coordinated planning effort, which Avista will actively participate in. As a regional energy provider, we are just one part of the project development process. We recognize that we need more time to align with our partners and communities in a way that is transparent, thoughtful and in the best long-term interest of our region."

Avista officials said they are committed to collaborating with local leaders, regulators and community members on how large data center proposals are handled moving forward.

"For over 137 years, Avista has served large load energy customers that help support the economic health and vitality of the region," the announcement said.

Avista entered into a nonbinding agreement with one "large load" customer seeking to use an amount of electricity that would be equal to more than half the combined power used by all residential and business customers in Spokane County. The agreement became public May 29 in a filing with the federal Securities and Exchange Commission. Avista said they could not identify the company or where the proposed business would be located, other than within the company's "Washington service territory," under the terms of the agreement.

Jason Thackston, the senior vice president of growth, policy and external relations, said the amount of feedback regarding the data center was unprecedented compared to other topics. Thackston said the company received numerous calls, emails and social media postings, which urged the company to look carefully at environmental impacts and energy costs, among other concerns.

"We know that there are emotions associated with data centers across the country ... so we were not surprised that there were community members who had concerns about it," Thackston said. "I would say we did not expect the volume of feedback that we received, and so that was part of the conversation we were having over the last several days. There was enough feedback that it just warranted this pause."

Thackston said he read every email that was sent so he could understand the sentiments being shared.

He explained the pause in negotiations should give Avista time to create more transparency about the process of accepting a large-load customer.

Thackston said Avista has been intentional and responsible about protecting reliability and a net benefit for all customers, but the intentions and principles held by the company during the process weren't communicated to customers and community members as clearly as Avista hoped.

"We're looking for opportunities to create more clarity about the process we go through when we receive requests from a prospective customer to help the community understand that the early stages are really, very preliminary and more of a feasibility study as opposed to a commitment to serve," Thackston said.

Thackston said Avista's role is to assess the feasibility of providing the amount of energy requested by a potential customer and to understand what investments need to be made to serve them. The customer would have to cover the costs of new investments.

While Thackston said Avista still is identifying its next steps, they intend to continue conversations with local elected officials. They are also hoping to connect with community members more directly.

Avista said they wouldn't confirm the still-confidential potential location and said the data center customer would be responsible for divulging who they are and their site.

"The potential customer's role is to engage with the regulatory agencies that have oversight of wherever that site would be to go through the permitting process," Thackston said.

One location marketed as a possible place for a data center is part of the former Kaiser Aluminum smelter complex in Mead, according to a posting made by local real estate company Daines Capital, which advertised use of the property as a data center.

Spokane Mayor Lisa Brown said she is aware the site had been talked about as a potential location for data center, but she's had no confirmation that it is the site related to Avista's recent announcement.

Steven Daines, the owner of Daines Capital, said Friday that he hasn't represented the property owner for about a year. His previous listing said there are 240 megawatts of power available on site provided by Avista. The property was powered by 59% renewable energy as of December 2022 with 48% hydropower, 33% natural gas as well as a mix of wind, coal and biomass power, according to the real estate posting.

The 203-acre property is located at 2425 E. Magnesium Road. Finnoe Design and Fabrication currently operates at the property, according to the company's website.

The property receives its water supply from the City of Spokane but has access to two industrial wells. Northern parts of the property are managed by the now-defunct Kaiser South Water District, which hasn't been absorbed into another district.

The City of Spokane is the largest water purveyor in the region, with 80,000 service connections inside and outside of the city, according to city spokesperson Erin Hut.

Hut said the city would need to know details like the volume of water requested, the size of the facility and the timing of construction to gauge environmental impacts and the entity's ability to fulfill a request.

"Protecting our water resources, ensuring drinking water quality, and supporting the health of the Spokane River are priorities for me," Brown wrote in a statement to The Spokesman-Review. "Any decision to locate major water users within the City's retail water service area must include the City of Spokane. Our Water customers have invested in our system for over 100 years; we must ensure that their needs are met first."

Because the smelter site is outside Spokane city limits, a proposed ordinance moratorium would not affect the use of the property as a data center.

"There's so many more questions than answers, and that's been the consistent piece of this and why we need this moratorium," City Councilman Paul Dillon said.

Dillon said even though the moratorium wouldn't stop a data center at the Mead smelter property, it could still help establish framework on how data centers use city water supplies

Washington Department of Ecology Eastern Region Director Brook Beeler said while the building site does have two wells on the property, that doesn't necessarily mean there's a valid water supply there.

"Any project proponent would need to demonstrate to us that they have a valid water right associated with those wells," Beeler said.

The new customer would need to go through a process to ensure there's still water available associated with those wells. They would need to prove there are water rights associated with the wells, and if the water rights have been relinquished, they would need to prove the water rights are being transferred from somewhere else, according to Beeler.

Beeler said if the site were getting water delivered from a service provider, it's unlikely the wells would be used. The real estate posting states the wells could be used for nonconsumptive, nonadditive cooling.

The cooling process of data centers comes with environmental concerns, specifically regarding heat pollution in water sources, water contamination and water overuse, according to Spokane Riverkeepers Water Protector Katelyn Scott.

Extreme energy use is also a concern for ratepayer affordability and environmental impact, said David Camp, a member of environmental group 350 Spokane.

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This story was originally published June 12, 2026 at 7:17 PM.