MS AI

0s [SPEAKER_04]
Good morning, everybody.

14s [SPEAKER_08]
Thank you so much for joining me here and us here this morning.

19s I think we have a really important topic and a really important conversation.

24s I'll kick it off.

25s You'll hear from some others.

27s We have a panel of people from around the country to have a conversation about what's going on around the country.

34s The construction of data centers, AI infrastructure, really the infrastructure of our future.

42s And I think this is a fitting time to have this conversation.

46s Here we are, the second week of January, still a new year,

52s and not a typical year.

54s Twenty-twenty-six, the year the United States celebrates its two hundred and fiftieth anniversary.

61s Its two hundred and fiftieth year of independence.

65s And in many ways, I think it is a good backdrop for this conversation.

69s Because what we need to think about and talk about are the issues of the day, but also the issues for our country that have always been part of our country.

81s Interestingly, we all know that George Washington was the father of our country in so many ways.

88s There was a book written about him with the apt title, A Grand Idea.

94s But the grand idea in this book was not the founding of a new nation.

98s It was not the creation of a new republic.

101s It was instead

103s the first step in a two hundred and fifty year history of building out the infrastructure of America.

111s Because after General Washington had left the army, after the war had ended, and before the Constitutional Convention, he held another post.

120s In seventeen eighty-five, he became the president, the founder of a new company, the Potomac Canal Company.

130s He saw a future where canals would open up the United States of America, where they went ahead and built the first stretch of the first canal near here in Great Falls, Virginia, something that people can still visit today.

148s And in so many ways, our two hundred and fifty years of history is not only an ongoing saga about democracy and the rights of people, but also technology.

160s Technology that leads to infrastructure.

162s Infrastructure that is driven by technology.

166s It started with canals, the first wave

169s But then as new technologies came into use, many of them required infrastructure.

174s The steam engine led to railroads and railroads required railroad tracks.

180s Electricity at the end of the nineteenth century required new power plants and the creation of an electrical grid.

188s the telephone was useless without telephone lines.

193s The automobile, the great invention that changed America forever, could not go very far unless there were roads and highways.

202s And the airplane that probably brought you either to your most recent vacation or here to a business week in Washington would not even take off or land without airports.

215s Infrastructure became part of the ongoing saga of America.

221s But one of the enduring lessons, one of many,

225s is that infrastructure expansion is always difficult.

230s For the people who worked here in Washington, D.C., when Andrew Jackson was president in eighteen thirty, one of the debates of the spring and the summer is whether the revenue from tariffs would be used to pay for what were called internal improvements if they were confined to a single state.

249s It was a political row.

251s It led to a presidential veto.

254s Decade after decade, century after century, infrastructure has always raised new questions, new concerns, new controversies, and yet throughout it all, it has been vital to the growth and prosperity of our nation.

272s Perhaps the story of Dwight Eisenhower and the interstate highway system says as much about modern day America as anything else.

281s But if you put those waves together, we've lived through as a nation six waves of technology and infrastructure expansion, and here we are.

291s Here we are on the two hundred and fiftieth anniversary of our country, the first month of the second quarter of the twenty-first century, and we are embarking again on what is the seventh wave of technology that demands investments in new infrastructure.

309s More powerful chips,

311s bigger buildings, more electricity, new advances in liquid cooling, broadband connectivity, many, many different technologies that come together to build the AI infrastructure that will create the next foundation for American growth and prosperity.

333s And yet, as before, the public

337s not surprisingly, has questions.

340s When we listen to communities around the country, when I visit communities around the country, people have questions, pointed questions, they even have concerns.

350s They are the type of questions that we need to heed.

355s Because one of the lessons of the past applies to the present and speaks to the future.

361s The truth is, infrastructure build-outs progress

365s only when communities conclude that the benefits outweigh the costs.

373s And we are at a moment in time when people have a lot on their mind.

379s They're worried about the price of electricity.

382s They wonder what this big data center will mean to their water supply.

387s They look at this technology and ask, what will it mean for the jobs of the future?

392s What will it mean for the adults working today?

395s What will it mean for their children?

398s All of these are more than legitimate.

402s And we are here today for one reason above all else, because we are at a moment in time when we need to listen and we need to address these concerns head on.

414s In short,

416s As a sector, as an industry, as a country, and community by community, we need to raise the bar.

424s And here at Microsoft, we're focused first and foremost on raising it on ourselves to address the issues that people care about.

434s That's why we're launching today a national initiative, but it's really about a national initiative that unfolds in specific communities.

443s For us, the communities across the country where we build, own, and operate data centers.

452s We call it our community-first AI infrastructure plan, and it has five pieces.

458s It's designed to address the five issues that we hear the most about.

463s Electricity, water, jobs, taxes, and skills.

469s Five issues that matter in every local community.

473s So let me walk you through what we are pledging to do.

478s In each of these five areas,

481s We offer each community where we build, own, and operate these data centers a straightforward pledge backed by action.

490s The first is electricity.

492s Our pledge to each of these communities is that we will pay our way as a company to ensure that our data centers don't increase your electricity prices.

507s This is what we have concluded we need to do in order to continue to build and invest and contribute in a responsible way.

519s And I think we all need to recognize, obviously, electricity prices have been rising.

524s They've been rising for many reasons including several years of inflation that have ultimately resulted in utility commissions changing electricity rates.

535s the real question is how do we deliver on this promise?

539s It really has four parts.

541s First, we will pay utility rates that are high enough to cover our electricity costs, in part by collaborating with utilities on plans to add the electricity supply that we will need.

557s The truth is, demand for electricity is growing.

563s AI infrastructure and data centers are a part of that growth in demand.

567s They are far from the majority of that cost, but they do matter, especially in a local community where a data center is being built or expanded.

578s And we recognize, for example, that our data center may well require investments in the local transmission capability of the grid or in substation improvements.

589s That is a benefit to us.

592s It is a cost that we should bear as we work things out with the local utility and utility commission.

601s There may need to be additional generation capacity to put more electricity on the grid.

609s so that we and others can access it.

612s And by collaborating closely with utilities, we will share our estimates of the amount of electricity we will need.

621s We will work with utilities so that we sign in advance so that they know that they can afford to make these investments.

632s And we will couple that with more work to make our data centers more efficient and to champion the kinds of public policies that are needed for not just these communities, but for the state and the country more broadly.

645s To improve the efficiency of our grid as a national asset, as an indispensable foundation for everyday life.

655s And we will use our technology, AI, to help drive efficiencies in electricity.

663s We will build on the work we have already started.

666s For example, in Wisconsin, where we have our Fairwater One, one of our biggest and most advanced data centers.

674s We've worked with WE Energies, the local utility provider.

677s They have proposed a special electric rate for data centers for very large customers.

684s It is a tariff structure that will increase the price of electricity for Microsoft and we have gone to bat to support that.

693s We do support that and we are asking the Public Utility Commission in Wisconsin to raise our rates to protect consumers.

702s Because I think the bare minimum as we look to the future is to give these communities around the country the confidence

711s that when a data center comes, its presence will not raise their electricity prices.

718s Now, interestingly, as important as electricity is, for such obvious reasons, given the large amount of electricity that data centers use, I've increasingly found over the last year that when I talk with folks in a data center community, they have just as many questions about water as electricity.

738s And so the second pledge that we are making in each of these communities is that we will minimize our water use and we will replenish more of your water than we will use.

751s Here too, there are multiple steps that we will take.

755s The first is to reduce the water used in our data centers.

760s Our goal is to reduce the water intensity of our data centers across the country by forty percent between now and the end of the decade.

768s and technology is helping.

770s You may think that at a technology company like Microsoft, everybody's focused on writing code and creating AI and developing software that you can use, and that is why we go to work in the morning.

782s But the reality is that our researchers and research labs are also focused on new technologies like new forms of liquid cooling in a closed loop so that the liquid needed to cool the chips is constantly recirculated and hence doesn't draw more water from the community.

803s So we will reduce our own water use.

806s But more than that, we will replenish more water in each community than we use.

812s What does that mean?

813s Well, think about it like a bank account.

816s We withdraw water.

817s If we use it, we will redeposit water to add it to the water supply.

823s And I'll talk a little bit about how we do that.

827s We also know that we need to be more transparent.

832s We will be more transparent as a company, providing data in each local community where we build and own and operate these data centers about how we're doing when it comes to meeting our water goals.

848s Because I think in the past, data centers were built

852s mostly without a lot of communication in a local community.

855s Land was bought under non-disclosure agreements because as soon as somebody knew that a big company was in town, the price of land would skyrocket.

863s And that created a culture, a culture in our industry that we need to evolve and change.

871s where we as a company lean in to share more and talk more with the local community and to advocate more for the public policies that are needed as well.

883s I think a fascinating example of what it means to replenish water comes from a part of the country where we have been operating data centers, a part of the country where water is far from plentiful, Arizona.

898s What we have done there is build on our water replenishment work by working with the municipality, working with them to identify where their water pipes in their water system have leaks, where they're losing water.

913s We are spending our money to invest to enable the municipality to fix those leaks

921s and protect its water supply.

924s And it's not just those kinds of steps.

926s We also take similar steps that are more nature-based, that focus on watersheds to help restore them, as we have in southeastern Wisconsin.

937s So in part because of the climate work we've been doing this last decade, because of our global goal to be water positive by the end of this decade, we've developed a capability that we can put to work and reach this goal of water positive, not just on a planetary or national basis, but in each of these specific data center communities.

962s The third thing we'll focus on is jobs.

965s And our pledge to these local communities is we will create jobs for your residents.

972s And I think there's two parts of this that are very important.

975s First is the number and nature of the jobs, and the second is who gets the jobs when they are filled.

983s The first is something that people talk about a lot.

986s Everybody knows that when a construction project is underway, it can employ thousands of people.

993s And people may look at a data center and say, there's a crane and there's a bulldozer.

997s But most of the jobs, in fact, are skilled labor, skilled craft jobs, especially for electricians and pipefitters with all of that liquid cooling.

1008s And people also know that when the construction phase is over, there are fewer jobs.

1013s But there's two things to remember.

1015s When we have a major data center site, the construction can last for more than a decade because we constantly expand.

1023s And even when that construction is over, we have hundreds of jobs, often in small towns.

1030s Jobs that involve not only the skilled labor like electricians and electrical engineers, not only pipefitters and mechanical engineers, but technology jobs and network security jobs.

1043s But the real question that people often have in local communities is who's going to get these jobs?

1049s We need to lean in as a company and as an industry so that the people who live in a community can see an opportunity for their kids, for their relatives, for their friends to fill these jobs and what that requires is an investment in skilling to equip people with the ability to fill those jobs.

1073s And so that's why we're investing in new partnerships, first to train local construction workers, but also for the ongoing jobs for our data centers.

1083s Through our Data Center Academy Program, which often partners with a community college to train individuals in the local community so they can fill those jobs.

1093s and to encourage policymakers, not just in local communities and counties and states, but at the national level to recognize the current reality, which is that we have a national shortage of skilled labor.

1107s Not just because we in some ways disinvested,

1112s in the trades, but because the workforce is aging, because the demand for this labor is now rising, and there is a gap, a gap that can be filled and create a new opportunity for people across the country.

1127s One of the most exciting steps we're taking is one we're announcing today with NAPTU.

1133s With our partnership, we will work together to provide NABTU with early visibility to where we see the need to expand, to work together on apprenticeship programs and training to create more opportunities for more people to fill these jobs.

1152s The fourth issue is taxes.

1156s And specifically, we have a pledge to each community on this too.

1160s we will add to the tax base that funds your local hospitals, your schools, your parks and libraries.

1168s And this has two critical elements.

1171s The first is we will not go into a local community and ask them to create a local property tax reduction or abatement in order to attract a data center from Microsoft.

1186s We recognize that this is one of the vital ways in which the addition of a data center or the expansion of a data center can add to the economic vitality of the community.

1199s And we will recognize that this is the community's resource that the community needs to apply to meet its broad needs, not to benefit us and our facility, but to benefit everybody.

1215s And I think in some ways this is the great reality that we've had the opportunity to experience firsthand as a company because we've been building data centers for over fifteen years.

1228s And I think no place better illustrates this than the small town where Microsoft built its first data center and has now built twenty data centers in Quincy, Washington, about a hundred and fifty miles east of Seattle.

1245s As somebody who has now lived in the state of Washington for almost three decades, one of the things that impresses me is that if you want to visit what is probably the nicest high school building in the state of Washington, you don't go to the neighborhood where Microsoft's headquarters is based.

1263s You don't go next door to Amazon.

1266s You go to Quincy.

1267s and you'll see their public high school.

1270s You'll see their brand new medical facility, a facility with more than fifty thousand square feet that is opened at a time when most rural communities are struggling just to keep their medical centers open.

1285s If you go to Quincy, Washington, there's two other things that you may not be able to see when you walk down the street, but they are critical to everyday reality.

1295s You will see a community

1297s where over the last fifteen years, property tax revenue has tripled from about sixty million dollars a year to a hundred and eighty million dollars a year.

1310s That is what is funding all of these improvements.

1313s But you know what else you will see?

1314s You will see something that does not exist very broadly in this country.

1319s You will see a place where the people living below the poverty line has been cut in half.

1327s in the last fifteen years, from just shy of thirty percent to just over thirteen.

1335s With the right stewardship and the right commitment, we fundamentally believe that data centers can fuel economic prosperity, not for the few, but for everybody in a community that depends on these schools and these hospitals and all of these other public services and jobs.

1355s We believe in it because we've been part of it, because we've seen it and we've helped create it.

1362s And we believe that this is something with the right perspective, with the broad approach we can bring to other communities as well.

1371s And finally, we're focused on skilling and the community as a whole.

1376s Our final pledge is that we will strengthen your community by investing in local AI training and nonprofits.

1385s We created last summer a new part of Microsoft, Microsoft Elevate.

1390s It works with nonprofits and K-Twelve schools and community colleges all around the world.

1397s And with this resource and our other capabilities, we will partner with schools.

1402s The schools and community colleges and other colleges and universities in these data center communities to provide them with access to the best AI training we can offer.

1413s We'll provide AI training and tools for the adults by creating AI learning labs in local libraries.

1420s We'll support AI skilling programs for local businesses, and we will invest in local nonprofits.

1428s We've been doing some of this in some places.

1430s One of the places we've been doing it is our largest data center campus east of the Mississippi in southern Virginia.

1439s in Mecklenburg County, where we've not only built a data center campus, but have been partnering with the community colleges, the higher education center, to provide more skills training to more people.

1452s And we will harness the energy that we've created as a company with and for our own employees to get involved in the community.

1462s In my own opinion, one of the best benefits of being an employee at Microsoft when you think broadly

1469s is the support that we provide for our employees to get engaged.

1474s Every time a Microsoft employee volunteers one hour for a nonprofit, Microsoft donates twenty-five dollars to that nonprofit.

1484s Last year our employees volunteered just shy of a million hours.

1490s Every time a Microsoft employee donates a dollar to a nonprofit, Microsoft will match it with another dollar.

1498s And that donation program, including the volunteerism, generated last year in this country alone, two hundred and twenty nine million dollars.

1510s And we will combine this with other and expanded programs to support nonprofits.

1518s So put together, we believe this is the type of step we need to take.

1524s I think it's the right thing to do from a civic perspective, to be civically responsible, but let's also face it, it's the right and smart thing to do from a business perspective as well.

1537s Because we need to recognize that this generation of new infrastructure is in so many ways, like every generation in the past,

1546s but in some ways is even moving faster than technology has ever moved before.

1552s And we need to recognize that this is an issue not only for the nation, but for many local communities as well.

1561s As all of you who work in this town know, at the end of the day all politics is local to a significant degree.

1568s And the truth is, when you have a national infrastructure wave underway, progress requires decisions at the national and the local level.

1579s It requires leadership from the President of the United States, as President Trump has provided recently, not only in the National AI Plan, but as recently as last evening, as he has made clear quite rightly in my view.

1596s that we need to stand up and step up as an industry and ensure that we pay the tab for things like the cost of electricity data centers will need.

1607s But as I've also found on many occasions, that as important as the President of the United States is on almost everything, when it comes to a data center, sometimes it's the President of the Village Council that is more important still.

1626s It's the leadership of a fellow like Dave DeGroote, the president of the village of Mount Pleasant.

1633s Without his leadership, Southeastern Wisconsin would not have one of the most advanced AI infrastructure facilities on planet Earth.

1645s But ultimately, as you all know,

1648s This requires not just new infrastructure.

1650s It requires not just new investments.

1655s It requires relationships.

1656s It requires people who engage in the community.

1659s It requires companies that can do a good job of breaking down the barriers to transparency so we can share more information and not just share but listen and learn.

1673s The truth is the progress that the future requires

1677s can be built, must be built, on one ingredient above all else.

1683s It needs to be built on trust.

1687s That is never built in a day.

1689s It's never built with just the unveiling of a plan.

1694s It's built by ensuring that our deeds match our words, that we listen and we learn, that we evolve what we do, and we meet local community needs.

1706s That is what we're committed to doing.

1710s And that's what we'll take from this room in this city to data center communities across the country.

1717s Thank you very much.

1729s So let me introduce the next speaker, who happens to be from southeastern Wisconsin, but works in your zip code.

1739s Brian Stile, the congressman who represents the first district of Wisconsin, who was first elected in twenty eighteen after working in manufacturing for a manufacturer in Beloit, a town where by coincidence I lived three years as a very young child.

1756s He also has the district that has our data center in Mount Pleasant, Wisconsin, where by coincidence I also spent four years growing up as a kid.

1767s One of the things I've always appreciated when I talk to Brian is the degree to which he has his finger on the pulse of what has been a constantly changing part of the country, from agriculture to manufacturing to automobile assembly to the future of data centers.

1788s As you probably know better than me, he also is a leader in the House of Representatives where he is the chair of the House Administration Committee.

1796s but as somebody who grew up in his district, as somebody who benefited from getting our family dog from the farm that is now on the site where our data center sits, I gotta tell you, it always makes me smile to see that the place I grew up is represented by somebody so capable.

1816s Please join me in welcoming Congressman Brian Stein.

1823s [SPEAKER_03]
Thank you very much.

1828s Brad, thank you very much.

1830s Two hundred and fifty years of history in the United States of America and what makes our country unique is when business leaders, civic leaders, and elected leaders come together to address the biggest challenges of the day.

1844s The challenge we're facing today is AI is coming online.

1847s How we build out the infrastructure is a new challenge, but it mirrors and parallels many of the challenges this country has seen before.

1855s And when those three groups, civic leaders, business leaders, and elected leaders are able to successfully come together, we have seen incredible success in the United States.

1865s Sometimes I reflect back on previous evolutions of technology.

1869s , and one of my favorites is actually going back and reading a New York Times article that says cash robots will end all teller jobs.

1878s Now note, it's before I was born, but bear with.

1883s It was an understanding of how technology in the ATM was going to completely disrupt tens of thousands of tellers across the United States of America.

1891s And you read the article, and it's actually pretty well written, except it's completely wrong in its conclusion.

1897s Because what would really happen over time is that the number of tellers would actually increase in the United States, and the wages that they would earn would actually increase in real terms.

1907s And so if you look back, it's leveraging that technology and embracing that technology in a thoughtful and structured way to the benefit of workers and communities across the United States.

1918s And I applaud you, Brad, and for Microsoft, for laying out the plan that you have.

1922s Because I've seen firsthand how this can work really well.

1926s It can also work really poorly.

1928s And we've seen that also play out as technology has evolved.

1933s But as you look at the forward-thinking plan that's laid out here, I think there is an amazing opportunity, not just nationally, but in particular in real communities that impacts real people.

1944s I think in particular about the text that Brad laid out about not asking for discounts, but stepping up and playing the civic role that businesses need to play in our community.

1955s But let me scale this for you.

1956s He referenced Mount Pleasant.

1958s It's the township just outside the city of Racine.

1960s The city of Racine is seventy-five thousand people.

1964s And I pulled up and said, if you took the housing stock in the entire city of Racine, the entire assessed value of seventy-five thousand people in this community of Racine, what's the assessed value of every single residential property in the city?

1981s It's four point two billion dollars.

1983s Microsoft has already invested three billion with an announced plan of seven billion dollars.

1989s Microsoft was the largest single taxpayer in Racine County

1995s last year.

1996s And so if we think about the impact that businesses like Microsoft can have, that leveraging the AI revolution can have, they're real and substantive.

2005s And they're real and substantive and think in two ways.

2008s One, reducing the tax burden, which is always a good thing, but also investing in a lot of the resources that communities need, from transportations to hospitals and others.

2018s People will benefit by increasing the tax base in our communities.

2023s The other aspect that you referenced, Brad, that I think is incredibly important is the real human impact that this has, not just in the abstract, but in real terms.

2033s I was home a couple weeks ago, and I ran into a buddy of mine that I went to high school with.

2038s He's a union electrician in Janesville, Wisconsin.

2040s Janesville is about a ninety minute drive across over to Racine.

2045s And he's a union electrician, and he said, Brian, I actually just started a job there building this data center over near Racine.

2051s I don't know if you know about it.

2053s And he drives back and forth because the wages that are being paid at the Racine facility are so significant it's worth his commute back and forth.

2063s in getting more and more young men and women into the trades, as union electricians, as pipefitters, as other positions, creates a huge opportunity for jobs in our community.

2076s In training and making sure that people have the skills to benefit from these types of jobs is a new challenge, but also it's a challenge that we've seen for many years.

2086s Racine, Wisconsin, as you may or may not know, is actually the home of the first ever technical college in the United States of America.

2094s In nineteen eleven, the community in the Racine area came together and placed a tax burden upon themselves to allow individuals to go to technical college.

2107s And why did they do that?

2108s Farming was going through a massive evolution.

2113s Case IH is headquartered in downtown Racine now, but they were beginning to produce tractors.

2120s And so the labor demand on farms was coming down.

2124s But the new jobs were now located in the city that required a new and different skill set than many incredibly hardworking young men and women would have.

2133s The community came together and created the first ever technical college, which would then be replicated across the country.

2140s And the investment in our education programs to make sure that those people in our own communities have the skill set to be able to benefit by the AI revolution is absolutely critical.

2153s And so as we reflect back, there is a huge opportunity here that we can get right or we can get wrong.

2159s And the forward and structured thinking of civic leaders, of elected leaders, and of business leaders to make sure that we get this right is absolutely essential.

2167s And so Brad, I applaud you and Microsoft for stepping up with the plan that you have today.

2172s And I know you're leaving here and going to Wisconsin.

2176s So congratulations.

2177s I'm jealous that you'll be in Wisconsin before me.

2180s But this is all about getting it right.

2183s Not getting it right just on the bottom line, just where the business leaders win.

2186s Not getting it right just where the elected officials win.

2189s But getting it right where everyone in the United States comes out ahead.

2195s , for the fact that this technological revolution is coming to us, and we can harness it to the benefit of the United States of America.

2203s Thank you all so much.

2203s Thank you, Brad.

2213s [SPEAKER_05]
And please welcome to the stage Mike Monroe, Chief of Staff, North America's Building Trades Unions.

2228s [SPEAKER_06]
Good morning, everybody, and thanks for having me.

2231s First, I just want to give it up for Brad for his presentation.

2235s The team here, he's put together a good event.

2237s Thank you all for coming.

2238s Thank you for having us.

2241s As was stated, Mike Monroe, Chief of Staff, North America's Building Trades Unions.

2245s Thrilled to be here representing the building trades and to highlight this partnership here that some of what Brad spoke to.

2252s So again, thank you.

2254s Thank Brad, his team.

2255s I'd be remiss if I did not thank also the work that predates this convening with the AFL-CIO and Liz Schuller and her leadership.

2264s So again, thank you for the work that you and your team have put together.

2266s And again, I was driving in here today and on the shuffle came in

2273s , I guess, fortuitously, something that came to mind in framing my remarks here.

2279s And as Brad laid out, you know, we have a lot to do to build trust in the communities.

2286s This is a scary time for a lot of folks, and now we're introducing new technologies, and there's an open question as to whether or not these technologies will pass them by.

2294s , if these technologies help further their advancement.

2298s And so as I remarked, and I was driving in, I heard as it were, the Isley brothers work to do, and we have work to do.

2305s And in the building trades, we run towards that work.

2307s We don't shy away from it.

2309s And who we are as a federation, NAB to a federation of construction unions, painters, bricklayers, sheet metal workers, iron workers, operating engineers, teamsters, pipe fitters, electricians, laborers, and others.

2322s And what we do is best in class, right?

2326s We train, equip, and deploy the highest, most skilled, most productive workforce in the world.

2333s Our workers, our members, through collective bargaining with our contractor partners have set up a sustainable workforce development model that's the envy of the world.

2343s Nineteen hundred training centers throughout the United States, two billion dollars annually invested in craft training, ongoing craft training.

2351s and with partners like Microsoft, we're able to plan for the future so we can deploy that craft in a strategic way, right?

2359s And so what we're here today to talk about, again, is the future and workers' place in it.

2365s And again, we're thrilled, representing the building trades, that Microsoft is oriented the way they are.

2371s Not all companies are speaking like them.

2373s Certainly not all companies are acting like them.

2375s And for those that are concerned about what the future holds and their stake in it, know that a partnership on the front end with the building trades is a window into that world.

2384s It is a first critical step into building trust within the community, making sure folks are listening,

2391s , instilling those listening sessions, if you will, into action and to making sure these investments are equitable and sustainable and provide value.

2401s So again, a commercial about the building trades.

2403s You know, we've been doing this for over a hundred plus years.

2407s We are not new to this.

2408s We are prepared for these moments.

2409s In fact, we have been preparing for these build outs for over a decade now, specifically as it relates to data centers.

2415s And yes, there are external players and internal players that are involved.

2419s and we do on all levels of it, the building trades will be engaged, whether it's our direct partnership with Microsoft, our direct partnership as representatives of the community and in the community, and yes, in public policy.

2430s Because as was stated, and again, to be commended for your foresight and your commitments here,

2436s , you know, there are drains on energy sources on water sources and being a good corporate steward, if you will, and embracing that challenge and addressing it and committing to doing it in an equitable manner is something that we are thrilled to be a part of.

2453s You know, I will say public policy right now, just to take a step back on what it is we do, building trades build everything that you can see in the physical world, right?

2461s affordable housing, energy systems, the grid, infrastructure is a word we go to bed dreaming about, right?

2470s And so this is now a moment where yes, policymakers can choose which side they're on and who to support.

2476s We're all of the above in the building trades, all energy systems, oil and gas, nuclear, renewables, offshore wind,

2485s It's lamentable that certain things have become political footballs, picking winners and losers.

2490s When it comes to this piece of business, we know we cannot pick winners and losers.

2494s We certainly need all energy systems, and the building trades will be building that as well.

2499s So in partnership with Microsoft, the opportunity that's been provided us, we're thrilled to do what it is we do best, and that is to put working men and women on the front lines to help build these things, maintain these facilities,

2511s and represent their communities in so doing.

2514s So as we move forward, we have work to do, but this is an important first step to engaging with the community, hearing the concerns of the community, enveloping their interests, and making sure that this enterprise brings value to their daily lives.

2530s And so we're thrilled at the partnership.

2532s We're thrilled at the opportunity.

2534s We are looking forward to the work ahead.

2536s And in fact, our teams are meeting next week to dive into what was referenced as our memorandum of understanding.

2541s where we're talking about the pipeline of work, the expectation of the build-out, what it will take from communities, and yes, from the building trades, the men and women of the building trades, to help have a successful enterprise.

2552s So again, thank you for the opportunity to be here.

2554s Thank you for the partnership.

2556s We're in our early stages and we're ready to roll up our sleeves and do our work.

2559s , we thank you all for being here, for the members of Congress that have come to support this endeavor, and we look forward to continually engaging the community, continually being good stewards of those communities, and bringing value everywhere we go.

2572s So again, thank you on behalf of the building trades, thank you for being here, and looking forward to the work ahead, Brad.

2576s Thank you.

2588s [SPEAKER_04]
Our panel will begin momentarily.

2656s []
.

2678s .

2678s .

2678s .

2689s [SPEAKER_02]
Good morning, everybody.

2691s My name is Rima Liley.

2693s I'm a general counsel at Microsoft, and I work with our infrastructure business.

2698s Thank you all.

2699s For this last segment, we're going to switch gears and do something different, have a discussion.

2706s The growth of infrastructure in cities, towns, and villages across the country raises important questions for those communities.

2715s Who pays?

2717s who benefits?

2718s And how do we ensure that local systems are protected rather than stressed?

2723s Today's panel is really meant to ground those questions in real community experiences.

2729s And we're joined by local leaders from Wyoming, Virginia, and central Washington who are here to talk about what works, what feels hard, and what Community First looks like in practice.

2742s So I have with me today Wes Astin, who is the Vice President of South Dakota and Wyoming utilities at Black Hills Energy, overseeing electric and natural gas services for over two hundred and fifty thousand customers across a hundred different communities.

2759s Dr. Sue Kane, who is the CEO of North Central Washington Tech Alliance, leading regional strategy at the intersection of technology, workforce development, and community impact across rural Washington state.

2774s And Brian Stone,

2775s who is the Deputy Director of the Department of Utilities for the town of Leesburg, Virginia, the state's largest incorporated town with approximately fifty thousand residents.

2785s He oversees operations, engineering and construction of the town's water and sewer infrastructure.

2792s So let's start, Wes, with you.

2793s Wyoming is often raised as an example of how electricity demand from data centers can be managed responsibly.

2803s Microsoft and Black Hills Utility work together on a tariff and a series of contractual arrangements to do that.

2810s Could you walk us through just at a high level, because this stuff can get complex,

2814s about how the partnership structure with Microsoft works and specifically how electricity to support data center growth was planned so that local customers weren't exposed to higher costs or reliability risks.

2828s [SPEAKER_00]
Yeah, I'd be happy to do that and good morning.

2830s Thank you for having us.

2832s It's great to be here today.

2833s Black Hills Energy has been a very grateful partner and I've been thrilled with our relationship with Microsoft as it's developed over more than a decade.

2843s Essentially, when Microsoft came to town more than twelve years ago, it was going to be a new large customer that we were very excited to have and after a couple years of service and that relationship building,

2854s we began to see that Microsoft had a desire to continue to grow in that area.

2859s Cheyenne is a great place for data centers, very high altitude, low humidity, near some population bases, and so we wanted to find a way to grow that partnership.

2869s What we ended up doing was working with Microsoft, working with our governor, working with our local leaders in the community,

2876s and we essentially got a law passed, legislation passed to allow for a different style for utility treatment for large customers.

2885s And that allowed us to file a tariff in front of the Wyoming Commission that essentially sets up a framework for large customers to be able to get service in a different way than other utilities.

2896s It segregates out how those services are delivered and makes sure that they're not borne by citizens that are rate payers.

2904s [SPEAKER_02]
Now, I understand that part of the structure also meant that Microsoft would pay for incremental infrastructure costs.

2911s Can you say a little bit more about that and what that entailed?

2915s [SPEAKER_00]
When we started this process to say how would this look, what would the framework look like for a different setup for a utility and this really even a decade later is still one of the most innovative rates we've seen across the country.

2928s It set up a framework to have a win-win-win, that Microsoft needed to have the power and they needed to have control of their generation portfolio, what that power looked like, where that reliability would come from, including behind the meter generation.

2942s And then if we were able to acquire power for Microsoft on the open market, we could offset some of our needs to build generation to grow.

2950s So that kept customer rates down.

2953s We were able to do that in a way that helps grow our infrastructure, grow our tax base, grow our load, but did not happen on the backs of other customers.

2962s [SPEAKER_02]
It's fantastic.

2962s Now, one of the other elements, as I understand it, of the tariff and the contractual arrangements that were put in place ensures that local customers actually receive the lowest cost power first.

2974s How does that work?

2975s And how does that impact then what those customers actually end up paying?

2979s [SPEAKER_00]
You know, one of the visions I think really came to fruition over that time was in order to make this successful for the community, I think Microsoft saw early on