Amazon Files Complaint Against Berkshire Utility. It’s About Data Centers.

Amazon contends Pacificorp isn’t giving it the power for four of its data centers in Oregon. (Courtesy Pacific Power)

Key Points

• Amazon Data Services filed a complaint against PacifiCorp, a Berkshire Hathaway-owned utility, for failing to provide contracted power to four data centers in Oregon.
• Amazon alleges PacifiCorp delivered less power than promised to the first data center, no power to the second, and did not complete contracting for the third and fourth.
• PacifiCorp reportedly demanded a 32.6% “tax gross-up” on capital contributions, which Amazon disputes as unjustified and not part of initial agreements.

Amazon.com is asking the Oregon Public Utility Commission to address the failure of a Berkshire Hathaway -owned utility to provide contracted power to its four data centers in the utility’s territory.

Amazon’s data-services company, Amazon Data Services, filed a complaint against Berkshire’s Pacificorp on Oct. 30.

Amazon Data Services wants the regulator to provide the necessary power or reallocate the territory where the data centers are located to another electric utility willing to provide the necessary power.

Pacificorp told Barron’s it has been acting “in good faith” to serve Amazon and to protect its other customers from “increased costs and reliability issues.” It also said it is open to working with Amazon to reach a resolution.

“PacifiCorp’s policy position to avoid direct and indirect harms between customers is consistent with Oregon law, which ensures new data center loads do not jeopardize customer affordability,” the company said.

The dispute highlights some of the strains that the explosion in data centers is putting on electric utilities.

In the complaint, Amazon said it has built four data centers in PacifiCorp’s exclusive territory in Oregon since 2021.

PacifiCorp is owned by Berkshire Hathaway Energy, which is controlled by Berkshire Hathaway. Amazon Data Services provides computing services owned by Amazon.

Amazon’s complaint states that Pacificorp has failed to fully meet any part of their agreement, from delivering less power than promised to the first data center to delivering no power to the second and not completing Pacificorp’s own contracting process for the third and fourth centers.

The complaint also says that PacifiCorp has demanded that Amazon Data Services pay a 32.6% “tax gross-up” on all capital contributions based on an internal PacifiCorp policy that occurred years after the agreements for the first two data centers, which don’t entitle PacifiCorp to the gross-up.

“PacifiCorp continues to demand payment for these charges without justification and despite PacifiCorp’s failure to perform its existing obligations,” Amazon said.

Write to Andrew Bary at andrew.bary@barrons.com