PGE Seeks Increased Electricity Rates for Data Centers
Portland General Electric (PGE) has filed a request with the Oregon Public Utility Commission for a 29% electricity rate increase for data centers. This action aims to shift the cost of new energy infrastructure and increased electricity demands away from residential and small business customers. The proposed changes, if approved, will utilize the Oregon POWER Act, creating a new customer class for data centers to bear their direct energy costs.
Portland General Electric (PGE) has formally requested a 29% electricity rate increase for data centers from the Oregon Public Utility Commission (OPUC). The utility states that this move is designed to protect residents and small businesses from the escalating costs of new infrastructure and increased electricity demands driven by data center growth.
This proposal marks the first time the 2025 Oregon POWER Act has been invoked, a law that establishes data centers as a distinct "customer class." This classification mandates that data centers directly cover the costs associated with their energy consumption and the necessary infrastructure. John McFarland, chief customer officer at PGE, emphasized that this approach ensures those driving the growth also pay for the associated infrastructure, thereby safeguarding household and small business customers while supporting regional economic development.
The initiative follows OPUC's approval in early May of a new framework intended to fairly distribute electricity costs from data centers. This framework also included measures to manage data center expansion, such as "exit fees" for abandoned projects, minimum usage charges, and special clean energy development contracts. This regulatory effort comes amid significant public concern in Oregon regarding data centers' power and water consumption, an issue that influenced recent Democratic Party primary elections.
If the OPUC approves PGE's latest rate request, residential customers are expected to see a 1.3% decrease in their rates, small businesses a 3.7% decrease, commercial customers a 2.2% decrease, and industrial customers a 1.5% decrease. The new rates are slated to take effect on June 10.