Pacific Power to charge data centers all costs for energy needs
Pacific Power, Oregon's second-largest electric utility, has reached an agreement to charge data centers for all new energy infrastructure required to power them. This move, expected to be approved by the Oregon Public Utility Commission, follows the state's POWER Act, which mandates separate rate classes for data centers to prevent customer subsidization. The Data Center Coalition is expected to appeal the decision, similar to its ongoing challenge against a related Portland General Electric proposal.
Pacific Power, Oregon's second-largest investor-owned electric utility, has agreed to a proposal that would directly assign the full costs of new energy projects and infrastructure to data center operators. This agreement, reached after negotiations with the Oregon Public Utility Commission (PUC) and advocacy groups including the Citizens' Utility Board, is expected to be approved by the PUC on November 13. It is a direct result of Oregon's POWER Act, which mandates utilities create a separate rate class for data centers to ensure that other customers do not subsidize the substantial energy demands of server farms.
Under Pacific Power's plan, new data centers would be responsible for the costs of all new energy generation and storage projects, grid upgrades, transmission lines, and market-purchased energy needed to serve them. This approach is more extensive than a similar plan from Portland General Electric (PGE), the state's largest utility, which bases costs on "peak demand growth" and applies to both new and existing data centers. PGE's proposal, approved by the PUC in July, led to a nearly 30% rate increase for data centers.
The Data Center Coalition, an industry group, has already appealed PGE's proposal to the Oregon Court of Appeals and is expected to appeal Pacific Power's deal as well. Bob Jenks, executive director of the Citizens' Utilities Board, highlighted that Pacific Power's data center customers are primarily large facilities in rural areas, making it easier to directly attribute infrastructure costs, unlike PGE's more numerous small data centers in densely populated counties. Data center energy demand has increased significantly, with data centers now accounting for nearly a quarter of all retail electricity sales statewide.