Oregon regulators move to make data centers pay more for grid expansion

The Oregon Public Utility Commission (PUC) has issued its first major order to implement the state's 2025 POWER Act, establishing a new regulatory framework to ensure large data centers directly cover the costs of the electricity infrastructure they require. This initiative, driven by House Bill 3546, aims to prevent expensive grid expansion costs from being passed on to ordinary utility ratepayers. The order introduces a new rate classification, "Schedule 96," for data centers consuming 20 megawatts or more in Portland General Electric (PGE) territory. Key provisions include new contract requirements, minimum payment obligations, exit fees, and surcharges. Notably, a one-cent-per-kilowatt-hour surcharge will apply to very large facilities (100 megawatts or more) to fund energy-efficiency programs for vulnerable customers. Rep. Nathan Sosa, chief sponsor of the POWER Act, lauded the decision, emphasizing its goal to ensure data centers pay their fair share. Both PGE and the Oregon Citizens’ Utility Board (CUB), a consumer advocacy organization, supported the order, deeming it crucial for balancing growth, reliability, and affordability. The framework also integrates Oregon’s clean energy mandates, stipulating that new large data centers can only connect if sufficient emissions-free electricity is available. The new rate changes are slated to take effect on June 10, with similar regulatory proceedings anticipated for other utilities like Pacific Power.