After a vague report that some companies were seeking to build “large” data centers in Seattle, Mayor Katie Wilson is exploring a moratorium on new data centers.
This seems like the typical performative, hypocritical stunt we expect from our politicians. A distraction from harder issues, like ensuring we don’t retrace Cleveland’s history as the economic landscape fractures.
It is easy to ban data centers when you don’t have any (hello Maine!). Seattle’s high real estate and electricity prices mean “large” data centers in the city simply aren’t competitive. We have long had colocation facilities serving local businesses, but they’re quite small by modern standards.
Banning large data centers in Seattle is like banning cattle grazing in midtown Manhattan. Seattle just isn’t going to attract the cutting-edge AI and hyperscaler data centers that require lots of land and power. The Texas panhandle is a better place to put those.
Using data centers to complain about data centers (by posting on Facebook) carries more than a whiff of hypocrisy. Wouldn’t a sincere commitment to “environmental justice” and “economic resilience” mean not using any dastardly data centers? The mayor could abandon all online political messaging. Or order city departments to stop using any data center services.
(Oddly, the City of Seattle’s data center is in Spokane. Which says something about the competitiveness of data centers in Seattle and/or the city’s inclination to support local businesses.)
The Means of Production
A self-proclaimed socialist, Comrade Katie has realized the socialist ideal of owning the means of production, at least of our city-owned utilities. But with ownership comes accountability and responsibility.
By drawing a line against new data centers, she would remove the easiest scapegoat for her performance. No blaming Big Tech. No pointing to AI. What remains is a testable proposition: will Seattle have affordable, reliable power?
Some challenges loom.
Affordable and Reliable Power
Seattle City Light already charges some of the highest electricity prices in Washington, a state that generally enjoys low power costs thanks to abundant hydropower.
Mayor Wilson’s first move was to fire the head of City Light and nominate a replacement with no utility experience. After pushback from both the employees’ union and the City Council, a new leadership search has begun. No explanation has been provided for why the previous CEO was fired or what the mayor’s strategy is for City Light (or, for that matter, anything economic).
Seattle City Light has announced accelerating price increases, well above inflation, for the coming years:
Effective January 1, 2026, you will see the previously approved average rate increase of 5.4% start appearing on your bill.
Business customers can expect to see overall bill increases between 4% to 7%, depending on their customer class and consumption profile.
Looking ahead to 2027 and beyond, we anticipate annual rate increases of 7 to 10%
The utility also needs to nearly double its capacity—from 2,000 to 3,800 megawatts in the next seven years—independent of any data centers. A growing population, electric vehicles, heat pumps, and broader electrification are all driving load growth.
It will take deft management to keep our grid both affordable and reliable. A moratorium on new data centers isn’t enough to keep the lights on in Seattle, and solutions that don’t fit on a bumper sticker seem like a stretch for the political class.
Fresh Water on Tap
While we’re looking at city-owned utilities, Seattle Public Utilities faces serious challenges of its own. The utility recently received a striking vote of no confidence in its ability to provide its most basic service: water.
Eastside cities across Lake Washington, united as the Cascade Water Alliance, get their water from Seattle’s reservoirs. They have concerns about Seattle’s investment and maintenance, and after much analysis and negotiation, the Eastside is switching to get its water from Tacoma:
“[Tacoma Public Utilities’] proposal offered longer supply certainty, greater financial benefit, and an opportunity to move towards a regionalized water system.”
You can read a lot between those lines. The fact it will take 15 years to transition Eastside taps to Tacoma water suggests deep concerns about Seattle’s ability to deliver.
Beyond maintenance worries, this customer exodus also means the smaller remaining base of ratepayers will bear the system’s fixed costs, pointing to higher water bills ahead for Seattleites.
No Excuses
If data centers aren’t coming—and can’t be blamed—then rising electricity prices, capacity shortages, and reliability issues rest squarely with the mayor. The same goes for water.
Grandstanding about data centers is easy. Making difficult and unsatisfying tradeoffs to ensure our city utilities deliver is the hard part.
So by all means, ban the large data centers that were never coming. Clear the field. Remove the distractions.
We can focus entirely on how our city utilities perform under Mayor Wilson.
