Microsoft deliberately burned through "millions of watts of electricity" to avoid a penalty for overestimating its power use last year, according to the New York Times. The company planned to continue wasting power at dozens of diesel generators in Quincy, Washington until the $210,000 fine was cut. Microsoft uses the utility as a backup for a large hydroelectric data center dedicated to cloud services and billed as a green, efficient facility. The company has pledged to go carbon neutral from this summer.

Since any excess power set aside could have been sold to other customers, the backup utility has a policy of charging clients extra for both over and underuse. Yahoo was the other company that overestimated its power consumption, but paid a fine of $94,608 without complaint. Microsoft, on the other hand, worked out that going through $70,000 of extra power by running "giant heaters" would put them in the clear and save $140,000 from the $210,000 fine.

The company's power use rose 5.5 million watts to a total of 34 million from the 16th to the 19th of December last year, a leap that represented more than half of Quincy's total power consumption. Eventually, the utility's board voted to reduce Microsoft's fine to $60,000. Speaking to the Times, a Microsoft spokesperson called the incident "a one-time event that was quickly resolved."

Update: Microsoft has quickly responded to the claims set by The New York Times, identifying out a number of faults in the analysis in regards to the alleged misappropriate use of diesel generators. In a post by Brian Janous, utility architect at Microsoft, he refutes the Times' article by stating:

One section of the article implies that Microsoft has run its diesel backup generators in excess of what is required to provide safe, reliable power to our data centers. We would respectfully disagree. Diesel generators are a costly alternative to grid-supplied power. The cost to run generators is several times higher than power purchased from the grid. And that doesn't account for the costs associated with purchasing, installing, and maintaining the generators.Janous' rebuttle also points out another error in the Times' reporting, suggesting that its portrayal of the utilization and efficiency of data centers was erroneous as well. He continues by adding insight into Microsoft's plans for creating efficient data centers, including the eventual removal of all generators and the company's continuous effort to work with communities and the government to ensure best practices. The response also explains how Microsoft believes that, in terms of energy consumption and environental sustainability, cloud computing is actually "a huge part of the solution."

Justin Rubio contributed to this report.