Oregon poised to hike electric rates for data centers
The Oregon Public Utility Commission is expected to approve new electricity rates for Portland General Electric customers, significantly increasing costs for data centers by 29% while reducing residential rates. This action is a key step in implementing Oregon's 2025 POWER Act, a state law designed to ensure data centers pay a more equitable share for grid infrastructure and energy costs. Governor Tina Kotek emphasizes the importance of these changes in creating a fairer system.
The Oregon Public Utility Commission (PUC) is poised to approve new electricity rates for Portland General Electric (PGE) customers, a move that will drastically increase costs for data centers by 29% while decreasing residential rates by 1.3%. The decision, initially slated for June 3, has been delayed until the PUC's July 7 meeting.
This rate adjustment is a direct implementation of Oregon’s 2025 POWER Act, a pioneering state law that segregates data centers from all other customer classifications. Governor Tina Kotek, speaking in East Salem, highlighted that the PUC's actions will mark a crucial milestone in fulfilling the POWER Act's purpose, ensuring that entities with the highest demand on the electric grid bear a proportional share of associated costs.
Bob Jenks, Executive Director of the Oregon Citizens’ Utility Board, noted that Oregon hosts 125 data centers, with more in development, collectively consuming 5.6% of the state's electricity – a figure projected to rise. Jenks anticipates a substantial shift of costs from non-data center customers to data centers, possibly leading to appeals from data center companies regarding the POWER Act's execution. He also foresees future benefits for residential customers as data centers absorb more industrial expenses.
While PGE's rate-setting process nears completion, Pacific Power is still in the process of developing its rates in compliance with the new law. Idaho Power, another investor-owned utility, is not expected to file a similar case as it is exchanging its Oregon territory. Furthermore, the POWER Act does not extend to municipal power providers or co-ops. Governor Kotek has established the Oregon Data Center Advisory Committee to develop further policy recommendations for the 2027 legislative session, aiming for a more prominent state role in managing data center development to meet statewide needs.