Oregon Gov. Kotek touts early POWER Act impacts as data center rates poised to rise
Oregon Governor Tina Kotek has highlighted the early impacts of the state's POWER Act, which aims to shift electricity costs from residential customers to large data centers. The Oregon Public Utility Commission is expected to vote on new rates that would increase electricity costs for data centers by 29% while decreasing residential bills by 1.6%. This is part of a broader statewide effort to regulate data center growth, including future legislation addressing grid capacity, water usage, and taxation.
Oregon Governor Tina Kotek announced that the state's landmark POWER Act is starting to achieve its goal of rebalancing electricity costs, shifting more expenses to large data centers and away from residential and small business customers. During a news conference, Governor Kotek underscored the unfairness of the previous system, where the cost of infrastructure for data center demand heavily impacted average ratepayers.
The Oregon Public Utility Commission (PUC) is anticipated to vote on July 7th on new rates for Portland General Electric (PGE). If approved, these changes would see large data centers face a 29% increase in their electricity rates, while the average residential customer would experience a 1.6% reduction in their bills, effective July 8th. Bob Jenks, Director of the Oregon Citizens Utility Board, noted that these shifts could amount to around $900 million over time, providing lasting relief to other customer classes.
The POWER Act, passed by the Oregon Legislature in 2025, sets the regulatory framework for these changes. Pacific Power is also undergoing a similar rate implementation process, with regulatory action expected later in the year. Governor Kotek emphasized that this is just the beginning of the state's efforts, stating a need for a "stronger statewide approach on data center growth" and to stop making it "too easy for them" in Oregon.
Looking ahead, Governor Kotek expects recommendations from her Data Center Advisory Council to shape new legislation in 2027. These future proposals are not only intended to address electricity rates but also critical issues such as grid capacity, water usage, and tax implications related to data center development.