View full sizeApple sent representatives to tour Facebook's big new Prineville data center last summer.Google, Facebook, Amazon -- and now Apple?
The world's largest tech company is nearing a decision about whether to build a large data center in Prineville, a quarter mile south of the Facebook server farm that opened this year, according to two people with direct knowledge of Apple's plans.
Apple would be the latest in a quick succession of big-name tech companies to build a data center in Oregon. The state is a hot destination for server farms, which attract huge investment but employ relatively few.
What's in a code name?
In pursuit of a competitive advantage, data centers try to keep their identities secret until they've committed to build at a given site. Facebook went by "Project Vitesse" before announcing plans to build its Prineville data center last year. Vitesse, French for "speed," is the name of Facebook site operations director Tom Furlong's boat.
Here's a look at three other projects that considered Crook County:
"Cloud"
: This project is Texas-based Rackspace, according to regional officials. Power planning documents describe it as a 100-megawatt project, potentially drawing enough electricity to power 73,000 homes. Rackspace had narrowed its choices to Prineville and Morrow County, and
.
"Jasper"
: A project between 50 and 70 megawatts, this "build-to-suit" data center company's identity is unknown. Regional planning officials say the project isn't going forward right away because Jasper hasn't found a client to occupy its data center.
"Maverick"
: People familiar with the project say Maverick is actually Apple. The company is proposing a 31-megawatt data center and faces a decision this month on whether to buy 160 acres of land in Prineville.
Oregon's mild climate and relatively low power costs are part of the draw, but tax breaks are the big attraction.
Rural "enterprise zones" spare computers and other equipment from the property taxes that other businesses pay. The exemption could be worth several million dollars or more to Apple, depending on the size of its investment.
Apple did not respond to an inquiry on its plans, but the company had a team examining Facebook's Prineville facility last summer on the same day The Oregonian visited the site.
Those familiar with the discussions say that Apple's Oregon plans have been in flux while it awaited word on whether there would be adequate electricity transmission in Prineville to meet its needs.
With transmission capacity expanding and other companies now looking elsewhere, a door opened for Apple.
, and at least two other companies were ahead of Apple for Crook County's power, which is limited by transmission constraints.
The Bonneville Power Administration, at the urging of the state's congressional delegation, moved up plans to upgrade the Ponderosa Substation in Crook County and expand the region's transmission capacity. That upgrade is now due to be complete in June 2013, a year ahead of schedule.
Additionally, another big data center,
. Rackspace had been known as "Cloud" in regional power planning documents. Another large project, known as "Jasper," has postponed its plans indefinitely.
That frees up electricity for Apple, which goes by the code name "Maverick" in its discussions with utilities and planning officials. Maverick has an option to buy 160 acres of land now owned by Crook County. That option expires at the end of the month and regional planning officials expect a decision within the next few weeks.
"They've either got to say yes they are or no they aren't," said Bill Zelenka, Crook County's planning director. He declined to identify Maverick, but said the company has been even more thorough in scouting its Prineville location than Facebook was.
"I'm hopeful," Zelenka said. "They seem pretty serious about it."
One potential hang-up could be Oregon tax policy. Zelenka said Maverick has expressed concern about the way the state Department of Revenue taxes data centers.
Facebook has raised concerns that a "central assessment" by the
including the value of a company's brand.
Big-name companies such as Facebook and Apple obviously ascribe a lot of value to their brands. Though the revenue department says any taxes would be negligible, Facebook isn't convinced. Central Oregon lawmakers plan to introduce a bill to block such taxation when the Legislature convenes in February.
That's after Maverick's option expires, but Zelenka said the company hasn't asked Crook County for an extension on the land purchase.
In the meantime, the city is in the process of annexing the 160-acre property so that it can provide sewer and water services to the site should Maverick proceed.
Expanding capacity
Apple is expanding its data center capacity to support its iTunes music downloads and its new
service, which stores customers' photos, songs, videos and documents online. The company opened a $1 billion facility in North Carolina.
Data center growth in North Carolina is moving parallel to activity in Oregon; Google has a data center there, and Facebook is now building a data center in North Carolina modeled on its first facility in Prineville.
North Carolina is attractive to server farms for the same reason Oregon is: tax breaks. The Tarheel State changed its tax structure to lure Apple,
. The paper reports that Apple also received local incentives worth $21 million.
By comparison,
or $71 million through its last fiscal year.
Data centers don't employ many people -- Facebook has just 55 in Prineville -- but they're packed with thousands of computers, which need huge volumes of electricity to run and stay cool.
BPA planning documents describe Maverick as a 31-megawatt data center, which would be a bit smaller than Google's large facility in The Dalles. Thirty-one megawatts is enough to power more than 22,000 homes. That's five cities of Prineville's size.
Prineville, Crook County and regional economic development officials have actively courted data centers in hopes of diversifying the regional economy and alleviating high unemployment.
Additionally, data center construction creates a valuable short-term economic stimulus. Facebook started construction on its Prineville facility last year and will continue expanding the facility through at least the end of 2013. On average, it has at least 200 people working on site while construction continues.
Read more about the state's newest industry in The Oregonian's series
.
Crook County has the state's highest unemployment rate, at 15.8 percent.
Data centers also generate franchise fees for local governments with their high electricity use, and Apple would bring its Prineville property onto local tax rolls by acquiring it from the county.
Apple would have plenty of room to expand on its 160 acre site -- Google occupies just 37 acres in The Dalles -- but it's not clear whether the company would have the need or ability to expand.
Electricity issues
Electrical transmission into the Prineville area is nearly maxed out, in large part because of the big data center Facebook opened there this year.
Facebook's data center had an initial capacity of 15 megawatts. Fully built out, it has the capacity to use 120 megawatts -- though regional power officials say the facility is running more efficiently than anticipated and may never reach its full electrical capacity.
To serve Facebook and other data centers in Crook County, the BPA says that it must upgrade the nearby Ponderosa Substation, add transmission lines and eventually add another substation. The full build-out would take two or three years and cost around $26.5 million.
"Our belief is that once this work is done, that it would not only accommodate Facebook but central Oregon's desire to land additional data centers," said Bob Gravely, spokesman for PacifiCorp, which serves parts of the Prineville area.
Though the substation upgrade won't be done for 18 months, building a new data center would take nearly that long. So Jeff Beaman, member services director for the Central Electric Cooperative, which also serves Prineville, said there's probably enough transmission capacity to serve another data center.
"In light of that, it seems doable," he said.
-- Mike Rogoway; twitter: @rogoway; phone: 503-294-7699