Oregon Gov. Kotek says state is a ‘cheap date’ for data centers
Oregon Governor Tina Kotek announced plans to implement new statewide safeguards against the uncontrolled expansion of data centers, citing concerns over tax breaks, water usage, and energy consumption. An advisory committee will provide recommendations, and Portland General Electric has already proposed a significant rate increase for data centers, which state regulators will decide on next week. A previous moratorium on tax breaks for data centers has also initiated an ongoing legal battle.
Oregon Governor Tina Kotek indicated she would push for new statewide safeguards to curb the unfettered expansion of data centers, stating that "Oregon needs to stop being a cheap date." While declining to offer specifics, Governor Kotek will await recommendations from an advisory committee she convened in January, emphasizing a comprehensive approach to address environmental issues, water usage, energy consumption, and tax policies.
The Governor's comments coincide with a proposal by Portland General Electric (PGE), Oregon's largest utility, to raise power rates for data centers by 29% while decreasing residential rates by 1%. This proposal, which state utility regulators are set to decide on next week, is an initial attempt to reclassify high-energy users under a bill passed last year allowing for higher, specialized rates. Bob Jenks, executive director of the Citizens Utility Board, supports the rate hike, believing it is "right for Oregonians."
Advocacy groups, such as Climate Solutions, are pressing for further action, urging the Governor and state lawmakers to pass a "comprehensive statewide strategy for responsible data center growth." Oregon hosts approximately 125 data centers, primarily clustered in the Portland metro area, the Columbia River, and Central Oregon, and has seen increasing public backlash due to the rapid expansion amid the AI boom. Opposition from environmentalists, land-use advocates, and AI activists has even influenced local elections, such as a state Senate race in Hillsboro.
Governor Kotek previously supported a roughly one-year moratorium on some property tax breaks for data centers under the Enterprise Zone program, a shift from her initial stance. However, companies rushed to secure benefits before the moratorium took effect, leading to an ongoing legal battle.