Technology holds great promise towards addressing the pressing environmental challenges facing us today. But as Microsoft contributes towards creating a sustainable future for the world, we realize that our growing operations are creating new demands on the planet. We need to do more as a company in getting our own house in order, including our headquarters in Redmond, Washington.
Yesterday we took an important step in this sustainability journey when the Washington Utilities and Transportation Commission approved a new contract between Microsoft and Puget Sound Energy, which enables us to go to the open market to buy 100 percent carbon-free energy to power most of our Puget Sound operations in Washington state. This isn’t just an aspirational goal. In this contract, we’ve committed to buying renewable energy at levels substantially higher than Washington state law, targets that are not only aggressive but meaningful. If we fail to meet these requirements we will face penalties.
We need to be a good neighbor to the Puget Sound community and we took great care to add measures to ensure this move is good for everyone. We’re paying a substantial transition fee that will be distributed back to other Puget Sound Energy (PSE) customers to make sure they are not negatively impacted by our move. We also want to make sure local service programs are well funded, so we will continue to pay into conservation programs and increase by 50 percent our contribution to support PSE’s low-income customers.
Our local operations require a substantial amount of energy; eliminating carbon emissions from our local operations means we’re a better, cleaner neighbor. It can also help ensure that there is additional carbon-free power to meet the region’s demand as PSE moves to close the Colstrip power plant. We’re proud of the collaboration with PSE that created this structure, and we believe this contract is a good example of how companies and utilities can collaborate to find solutions that meet everyone’s needs, while advancing a greener grid. This is increasingly important as utilities and regulator across the country look for ways to address increased customer demand for clean energy.
We still have a lot of work ahead of us to install new meters, coordinate with suppliers and work with PSE to make this a reality, but today is an important step towards a carbon-free Microsoft campus. We look forward to sharing more about our plans and progress over the coming months.