Portland General Electric to increase data center rates by 29%, cut residential rates by 1.3% - Oregon Public Broadcasting
Portland General Electric (PGE) plans to increase electricity rates for large industrial users, including data centers, by 29%. This change, driven by the state's POWER Act, aims to shift infrastructure costs to large energy consumers. The new rates, if approved by the Oregon Public Utility Commission, would also result in a slight decrease for residential and commercial customers.
Portland General Electric (PGE), Portland's largest electric utility, announced plans to increase rates for large energy users like data centers by 29%. This move is in response to the POWER Act, a landmark law passed by Oregon lawmakers last year, which mandates that industrial customers consuming over 20 megawatts pay their proportionate share of electricity usage costs. The utility's spokesperson, Drew Hanson, indicated that this legislation provides PGE with new mechanisms to ensure data centers contribute to the costs associated with their growth, rather than these expenses being borne by other customer groups.
Conversely, residential customers are expected to see a 1.3% decrease in their rates, while commercial customers will experience a 2.2% reduction. These proposed changes are currently under review by the Oregon Public Utility Commission, which regulates utilities and must approve any rate adjustments. If greenlit, the new rates are slated to become effective on June 10.
According to Bob Jenks, Executive Director of the Oregon Citizens' Utility Board (CUB), a watchdog group, this significant rate increase for data centers validates their long-held belief that these facilities were not adequately covering the costs of the services they consumed. Jenks views this as a major victory for Oregon households, anticipating a slowdown in the increases to home PGE bills. However, Jenks also suggested that further adjustments might be necessary in future cases, as the current realignment did not fully address all costs, particularly those related to local electrical infrastructure that disproportionately affect residential customers.
John McFarland, PGE's chief customer officer, emphasized that the POWER Act supports responsible growth by ensuring that the customers driving new energy demand and infrastructure costs are the ones who pay for them, thereby protecting residential and small business customers while still fostering economic development in the region. The rate adjustment comes as Oregon experiences a growing number of data centers coming online, with 125 facilities currently operating in the state.