SB 250: "An Act relating to data centers; and relating to utility service for data centers."
00 SENATE BILL NO. 250 01 "An Act relating to data centers; and relating to utility service for data centers." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 42.05.381 is amended by adding a new subsection to read: 04 (r) Costs incurred by an electric utility or gas utility that would not have been 05 incurred but for the utility furnishing service to a data center may not be included in 06 any rates or charges of the utility unless the rates or charges are designed to recover 07 those costs solely from the data center. During a rate proceeding, the portion of the 08 utility's revenue requirement associated with the costs to serve the data center shall be 09 assigned to the data center. In this subsection, "data center," "electric utility," and "gas 10 utility" have the meanings given in AS 42.05.435. 11 * Sec. 2. AS 42.05 is amended by adding a new section to read: 12 Sec. 42.05.435. Contracts for data centers. (a) An electric utility or gas 13 utility that furnishes service to a data center shall enter into a contract with the 14 customer for that service. The utility shall submit the proposed contract to the 15 commission. The commission shall review the contract terms and approve the contract
01 if the commission determines that the contract meets the requirements of this section. 02 Notwithstanding AS 42.05.371, the terms of an approved contract govern the terms 03 and conditions under which the utility offers its services and facilities to the data 04 center. 05 (b) A contract may not increase the risk of inadequate fuel supplies for any 06 public utility in the state, including utilities not party to the contract. 07 (c) The terms of a contract must include an accounting of all costs for 08 infrastructure primarily used by an electric utility or gas utility to furnish service to a 09 data center and directly assign those costs to the customer with the data center for the 10 duration of the contract. If an infrastructure component is primarily used to furnish 11 service to both the data center and other customers, the contract must specify the 12 portion of infrastructure costs to serve the data center and assign that portion to the 13 data center. If, during the contract period, an infrastructure component is no longer 14 primarily used to furnish service to the data center, the utility may submit a proposed 15 contract modification to the commission that includes evidence to support the 16 modification. The contract may provide for the utility to recover infrastructure costs 17 from the customer with a data center by the customer constructing the data center's 18 infrastructure, making contributions in aid of construction, or paying utility rates for 19 the data center with the costs included. 20 (d) Transmission infrastructure built specifically to serve a data center may 21 not initially be considered part of a backbone transmission system for the purpose of 22 allocating backbone transmission system costs under a nondiscriminatory open access 23 transmission tariff. If a review at the end of the contract term finds that the 24 transmission infrastructure is also used for other customers, the infrastructure may be 25 evaluated for consideration as part of a backbone transmission system. In this 26 subsection, "backbone transmission system" has the meaning given in AS 44.83.720. 27 (e) A contract must include a detailed analysis of all variable costs that will 28 change when an electric utility or gas utility furnishes service to a data center and 29 assign those costs directly to the data center using a separate customer-specific cost of 30 power adjustment or gas cost adjustment methodology. A contract must ensure that 31 furnishing service to a data center does not increase the cost of power adjustment or
01 gas cost adjustment for other customers. 02 (f) A contract must include a backup power and reliability plan that prioritizes 03 renewable generation, storage, and demand response, limits fossil fuel backup 04 generation to emergencies and testing, and ensures backup operations do not increase 05 emissions or effects to other customers. A contract must specify that a data center may 06 use diesel or other fossil fuel backup power only for a limited duration, which must be 07 reported annually to the commission, and may not shift fuel or reliability risk to other 08 customers when using backup power. 09 (g) If geographically dispersed buildings, equipment, structures, and other 10 stationary infrastructure are used for the same purpose and owned or operated by the 11 same person, or by any person who controls, is controlled by, or is under common 12 control with the person, the commission may determine that the infrastructure is a 13 single facility for the purposes of this section. 14 (h) A municipality shall enter into a community benefit agreement with a 15 customer with a data center within the municipality before the commission approves 16 the contract between an electric utility or gas utility and the data center and before 17 construction of the data center begins. The municipality may address any community 18 benefits related to the data center in the agreement based on the municipality's unique 19 needs, including emergency response, local hire, and any other concerns and priorities 20 of the municipality. If the customer with a data center has not entered into a 21 community benefit agreement with the municipality before construction of the data 22 center begins, a municipality may file a civil lawsuit to obtain 23 (1) an injunction to stop construction of the data center or to prevent 24 the data center from operating; and 25 (2) any other appropriate relief. 26 (i) The community benefit agreement required under (h) of this section must 27 (1) require the customer with a data center to 28 (A) submit a waste heat recovery assessment to the 29 municipality that quantifies the potential recoverable heat when the data center 30 is fully built, identifies nearby potential users for waste heat, and describes the 31 practicability of implementing waste heat recovery, including technical
01 practicability and potential costs; and 02 (B) if the assessment determines that waste heat recovery is 03 practicable, implement the waste heat recovery in the assessment or 04 alternatively pay to the municipality an agreed-on amount that the municipality 05 shall use to fund local thermal projects; 06 (2) address broadband interconnection costs necessary to serve the data 07 center; and 08 (3) require a digital equity contribution that must be used by the 09 customer with a data center to make digital infrastructure investments in or near the 10 municipality, with priority given to investing in infrastructure that reduces digital 11 divides in or near the municipality; digital infrastructure investments include building 12 conduit, dark fiber, and last-mile broadband in unserved or underserved areas and 13 supporting rural or low-income connectivity programs. 14 (j) A customer with a data center must file with the Department of 15 Environmental Conservation the end-of-life decommissioning and recycling plan 16 required under AS 46.03.125 before the commission may approve the contract. 17 (k) This section does not apply to 18 (1) an electric utility or gas utility when the utility is furnishing service 19 to another public utility; or 20 (2) a data center that consumes less than 21 (A) 20 megawatts of peak power demand from an electric 22 utility or 20 percent of the total kilowatt-hours of electricity sold by the utility 23 in the previous year; and 24 (B) 2,000,000,000 standard cubic feet of gas annually from a 25 gas utility or 20 percent of the total gas sold by the utility in the previous year, 26 whichever is smaller. 27 (l) In this section, 28 (1) "contract" means a contract between an electric utility or gas utility 29 and a customer with a data center for the utility to furnish service to the data center; 30 (2) "data center" means a facility used to house computer systems and 31 associated components at which the primary function is the storage, management, and
01 dissemination of data; 02 (3) "electric utility" means a public utility that furnishes electrical 03 service; 04 (4) "facility" means all buildings, equipment, structures, and other 05 stationary infrastructure that are owned or operated by the same person, or by any 06 person who controls, is controlled by, or is under common control with the person, and 07 that are 08 (A) located on a single site or on contiguous or adjacent sites, 09 including sites with multiple metering points; or 10 (B) geographically dispersed, if the commission determines the 11 sites should be considered a single facility under (g) of this section; 12 (5) "gas utility" means a public utility that furnishes natural or 13 manufactured gas by transmission or distribution; 14 (6) "municipality" has the meaning given in AS 29.71.800. 15 * Sec. 3. AS 46.03 is amended by adding a new section to article 3 to read: 16 Sec. 46.03.125. Data center end-of-life decommissioning and recycling. (a) 17 A person who constructs a data center in the state shall file with the department an 18 end-of-life decommissioning and recycling plan. The plan must specify the actions the 19 person will take to 20 (1) systematically dismantle and remove equipment and infrastructure 21 from the data center when the data center is no longer in use; 22 (2) perform secure data destruction, equipment removal, asset 23 recovery, and site restoration related to the data center; and 24 (3) ensure regulatory compliance and environmental responsibility 25 when decommissioning the data center. 26 (b) The department may accept an end-of-life decommissioning and recycling 27 plan as filed or, if the department determines that the filed plan does not satisfy the 28 requirements of this section, may require the person to file a revised plan. 29 (c) This section does not apply to a data center that consumes less than 30 (1) 20 megawatts of peak power demand from an electric utility or 20 31 percent of the total kilowatt-hours of electricity sold by the utility in the previous year;
01 and 02 (2) 2,000,000,000 standard cubic feet of gas annually from a gas utility 03 or 20 percent of the total gas sold by the utility in the previous year, whichever is 04 smaller. 05 (d) In this section, "data center" has the meaning given in AS 42.05.435.