PGE customers to see reduced rates at the expense of data centers
The Oregon Public Utility Commission approved a plan under the POWER Act, significantly increasing electricity rates for data centers by 29.7% while reducing rates for residential and commercial customers. This legislative change aims to shift the cost of grid upgrades onto data centers, which are driving increased demand. A legal challenge from data centers is anticipated.
The Oregon Public Utility Commission has approved Portland General Electric's (PGE) plan to implement the POWER Act, a law passed by the Oregon Legislature in 2025. This plan introduces a substantial 29.7% electricity rate increase for data centers, while concurrently decreasing rates by 1.3% for residential customers and 2.1% for commercial customers. This marks a significant shift, as data centers, previously categorized under industrial customers, now have their own customer category, with rates adjusted based on a grid study mandated by the POWER Act.
The legislation aims to reallocate the costs of grid upgrades and other infrastructure projects needed to meet the region's growing electricity demand, much of which is attributed to data centers. Bob Jenks, president of the Citizens' Utility Board, a consumer advocacy group instrumental in the bill's passage, estimates that this law will save non-data center PGE customers approximately $900 million over the next three decades. Jenks also anticipates that data centers will likely challenge the new law in court.
The approved rate adjustments are a recalculation of a 5.6% rate increase that took effect in January 2025. However, the law is not retroactive, meaning customers will not be reimbursed for higher rates paid before the new structure was implemented. This development follows a period of record-high rate hikes for PGE customers in the two years preceding the 2025 increase.