Oregon data centers now have to pay full costs of expanding the power grid to meet their needs
News ClipKGW·OR·5/8/2026
Oregon regulators have approved new rules allowing Portland General Electric to charge data centers higher rates, requiring them to cover 100% of grid expansion costs. This aims to prevent smaller ratepayers from footing the bill for the energy-intensive facilities. The new rules, prompted by state legislation and rising demand, include surcharges and penalties for large energy users.
electricitygovernmentenvironmentalannouncement
Gov: Oregon Public Utility Commission, Oregon State Legislature, Northwest Power and Conservation Council
The Oregon Public Utility Commission (PUC) has given Portland General Electric (PGE) the green light to implement new electricity rates for data centers. These rules, published in an order on Thursday, aim to ensure that large energy users, particularly data centers, bear the full cost of expanding the power grid to meet their demands, preventing costs from shifting to residential and smaller business customers.
The regulatory change comes after six consecutive years of rate increases for Oregon ratepayers, driven significantly by an unprecedented surge in electricity demand from data centers. The PUC's decision was influenced by ongoing requests from utilities like PGE and a directive from the legislature through House Bill 3546. The order mandates that large energy use facilities, defined as those drawing over 20 megawatts, enter into contracts making them responsible for 100% of distribution network expansion costs and maintain at least 90% of their contracted power use capacity. Penalties are stipulated for exceeding capacity or early contract exit.
Additionally, a "very large loads" tier for customers drawing over 100 megawatts will face a new 1 cent per kilowatt-hour surcharge, with revenue directed towards reducing energy burden for vulnerable customers. The order also introduces a queue system, preventing data centers from connecting to the grid until sufficient zero-emission generating capacity is available, aligning with House Bill 2021's mandate for utilities to achieve 100% emission reduction by 2040. PGE's chief customer officer, John McFarland, stated the decision balances growth, reliability, and affordability.
Consumer advocacy group Oregon Citizens' Utility Board (CUB) lauded the ruling, with Executive Director Bob Jenks stating it provides "strong protections in the face of data centers' skyrocketing growth." CUB anticipates data centers will soon pay rates that more accurately reflect their grid impact. PGE is required to file a new pricing system by June 3, effective June 10, and submit annual reports on large energy users starting June 1, 2027.