Microsoft to bypass PSE, buy renewables on the wholesale market in Washington

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As more and more large companies are procuring renewable energy directly, and often ditching their utilities to do so, U.S. technology companies are playing a leading role. And while Google’s 100% renewable energy commitment has led the pack, Microsoft has by no means been a laggard.

Last week Microsoft reached an agreement with Puget Sound Energy (PSE) to establish a special contract, whereby the tech company will be allowed to source carbon neutral and renewable energy from the wholesale market while continuing to make contributions to a PSE energy efficiency program. Additionally, Microsoft will be required to pay a $24 million “transition fee” to PSE.

The settlement will now go to the three members of Washington Utilities and Transportation Commission (WUTC) for approval or modification.

Microsoft is not the only company in the region that is seeking a degree of independence from PSE. Kroger, Sam’s West, Walmart and a trade group calling itself Industrial Customers of Northwest Utilities were also parties to the agreement, and in October PSE filed with WUTC to create a new retail service for large commercial and industrial customers which will allow them to procure energy from power suppliers other than PSE.

According to data compiled by Bloomberg New Energy Finance, Microsoft was the third-largest corporate purchaser of renewable energy in 2016 at 257 MW of contracts signed, following Amazon and Google. In all three cases the majority of capacity procured was wind.

But it is not only wind that is benefitting. GTM Research estimates that in 2016 over 1 GW-DC of solar projects came online through either “green tariff” programs whereby utilities procure solar on behalf of corporate customers, or through direct procurement. The company further estimated in February that there was another 1.9 GW of solar projects for corporate purchase under development.