Pacific Power and State Regulators Near Deal, Protects Consumers from Data Center Costs
Pacific Power and Oregon state regulators are nearing a deal to directly assign energy infrastructure costs for data centers to operators, rather than having other customers subsidize them. This agreement, expected to be approved by the Oregon Public Utility Commission, follows the state's POWER Act mandating separate rate classes for data centers. The deal, which goes further than a similar one by Portland General Electric, requires new data centers to cover all associated generation, storage, and infrastructure costs.
Oregon's second-largest investor-owned electric utility, Pacific Power, has reached an agreement with state regulators to directly assign the costs of new energy projects and infrastructure required by data centers to the operators themselves. This deal, a result of months of negotiations with the Oregon Public Utility Commission (OPUC) staff, the Citizens’ Utility Board, and various advocacy groups, is anticipated to be approved by the OPUC on November 13. Charlotte Shuff, a spokesperson for the Citizens’ Utility Board, hailed it as "the strongest from a for-profit electric utility yet" under the state's POWER Act, which mandates utilities create separate rate classes for data centers to prevent other customers from subsidizing their high energy demands.
The agreement by Pacific Power goes further than a similar proposal approved for Portland General Electric (PGE), the state's largest utility. While PGE's plan assigns costs based on "peak demand growth" and applies to both future and existing data centers, Pacific Power's proposal requires new data centers to cover all costs for new energy generation, storage projects, and infrastructure upgrades specifically needed to serve them, even if these also benefit other customer classes. This direct allocation would include expenses for transmission lines and market-purchased energy. The Data Center Coalition, an industry group, is expected to appeal Pacific Power's deal, having previously appealed PGE's proposal, which led to a nearly 30% rate increase for data centers on that utility's system.
Utility representatives emphasized the differing challenges faced by the two companies; Pacific Power's service area is more spread out, with large data centers in rural areas like Madras, making it easier to directly tie infrastructure costs to specific customers. Conversely, PGE serves a higher number of smaller data centers in densely populated counties like Washington County. Bob Jenks, Executive Director of the Citizens’ Utility Board, noted that Pacific Power currently has few data center customers but expects "dozens want to get onto their system, and some of them are massive." The utility will address costs for its current data center customers next spring.