Spokane's decision to immediately halt new developments of computer data centers for one year could affect the city's ability to compete for future billion-dollar investments, according to industry advocates.

Spokane City Council voted to approve an ordinance establishing a one-year moratorium on the acceptance, processing, review, and approval of building permit applications for new computer data centers in June, so city officials can study the potential impacts on land use, utility infrastructure, and community resources.

This follows reports of Avista Corp. potentially adding a "large load" customer, which was later identified as a data center. After an outpouring of public concern and questions, Avista placed those discussions on hold, according to a press release from the Spokane-based energy company.

City Councilmember Paul Dillon, who supports the moratorium, says additional research is needed before Spokane establishes long-term policies governing future data center development.

"I really don't want this to be a situation where it becomes the economic benefits versus environmental concerns," says Dillon. "Although, that is exactly how the data center topic presents itself."

Dan Diorio, vice president of state policy for the Data Center Coalition, a Virginia-based nonprofit trade association representing the data center industry, says companies investing billions of dollars in new facilities look for communities that provide regulatory certainty. The one-year moratorium is sending the wrong message to companies considering Spokane for future investment, Diorio contends.

"The industry can simply take Spokane out of the conversation," Diorio says. "This moratorium is a knee-jerk reaction that may have long-lasting effects. The concerns are very valid, but to enact an immediate moratorium is going to create long-term effects."

The minimum investment for a modern data center campus is approximately $1 billion, he says, noting that most facilities currently under development are for cloud storage and enterprise computing centers, rather than generative artificial intelligence facilities. Diorio also disputes concerns of data centers increasing costs for residential utility customers.

Investor-owned utilities, such as Avista, can create downward pressure on electric rates by adding large industrial customers, because fixed-system costs are spread across greater electricity sales, Diorio explains.

"The concern that infrastructure build-outs would cause rate increases neglects how rates are set," Diorio says. "The industry expects to pay all infrastructure costs and rates associated with serving new data facilities."

Data industry companies are expected to cover all of their costs, Diorio asserts, referring to a data center hub in central Washington.

"When you look at Quincy, (Washington,) the property taxes for residents have gone down," Diorio says. "Jobs have been created, infrastructure has improved, and so has overall quality of life for the residents."

The debate in Spokane comes as Washington state continues studying an industry that has brought billions of dollars in taxable value and public investment to some communities, while also increasing demand for electricity and other natural resources.

The Washington State Department of Revenue's Data Center Workgroup was formed after Gov. Bob Ferguson issued an executive order in February 2025. The 33-member group was tasked with evaluating the industry's economic impacts, infrastructure needs, and policy considerations. The group's preliminary report concludes that data center development is primarily driven by access to clean, reliable, and affordable electricity; favorable tax incentives; efficient permitting; competitive ownership costs; and speed to market.

Data centers have delivered substantial economic and fiscal benefits in Washington state communities, particularly in the cities of Quincy and East Wenatchee, and according to the report, the facilities have increased assessed property values, lowered community levy rates, helped fund public infrastructure projects, and created jobs.

Washington state offers limited sales and use tax exemptions for qualifying data center investments, but does not provide property tax incentives, according to the report.

Researchers also have identified several challenges facing the industry, including rising electricity demand, transmission constraints, permitting limitations, uncertainty surrounding available power, and concerns about natural resources, such as water availability.

Data centers and semiconductor chip manufacturing could add an average electrical load of about 2,000 megawatts by 2030. Under the council's high-growth scenario, that demand could increase to 4,800 megawatts by 2030, and as much as 6,500 megawatts by 2046, according to the report, which cites projections from the Northwest Power and Conservation Council. 

Washington has a skilled workforce available to construct data centers, but is falling behind in developing the clean energy infrastructure necessary to support growing electrical demand while meeting the state's clean energy goals, the report concludes.

Grant County, Washington, illustrates the scale of the data center industry's economic impact in the report. In 2006, before major data center development, the county's 10 largest taxpayers had a combined assessed value of just under $313 million and generated about $4.2 million in property taxes, according to the report.

By 2025, after data centers opened in Grant County, the assessed value of the top 10 taxpayers increased to about $6.1 billion, generating about $54.3 million in property taxes, a 1,300% increase. Seven of the county's 10 largest taxpayers are now data centers, including six in Quincy and one in Moses Lake.

The property tax levy rate dropped roughly 70% in Quincy, falling from $3.12 per $1,000 of assessed value in 2006 to $0.88 per $1,000 in 2025, and according to the state's report, increased tax revenues enabled the city to replace, upgrade, and construct numerous public building and infrastructure projects.

While the development of new data centers is now on pause in the city of Spokane, there are already data centers operating in Spokane County.

St. Louis-based TierPoint LLC operates data center facilities in Liberty Lake that provide secure colocation, cloud, and disaster recovery services for customers throughout the Inland Northwest. TierPoint didn't immediately respond to the Journal's request for comment. The company operates a 32,000-square-foot facility at 23403 E. Mission, and a second 16,500-square-foot data center, at 23017 E. Mission.

TierPoint's website says the Spokane market benefits from diverse fiber connectivity, relatively low natural disaster risk, competitive power costs, and proximity to industries including healthcare, aerospace, advanced manufacturing, and logistics.

The discussion surrounding Spokane's moratorium reflects a broader debate occurring across Washington state as communities weigh the economic opportunities associated with billion-dollar private investments against growing concerns over electrical infrastructure, water resources, land use, and long-term community planning.