The state of Oregon’s utility regulator is implementing a new rule starting Wednesday that will raise the electricity bills of data centers and other large energy users to allow lower rates for other customers.
The Oregon Public Utility Commission (PUC) approved updated electricity rates for data centers and other residential and commercial customers that Portland General Electric (PGE) was required to change under a state law known as the Protecting Oregonians With Energy Responsibility (POWER) Act.
Under the law, PGE will raise rates by an average of 29% on data center customers, while residential customers will see an average decrease of 1.3%, commercial rates will fall by an average of 2.1%, and other industrial customers’ rates will decline by an average of 1.4%. PUC estimated that the move will impact about 963,000 customers across PGE’s service territory.
“These changes ensure that costs created by data centers in PGE’s territory are more accurately reflected in their rates,” said Commission Chair Letha Tawney. “By putting this structure in place now, we are getting ahead of a bigger issue, enabling responsible data centers to pay their own way, and protecting customers from higher costs in the future.”
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PGE’s rate changes officially take effect on Wednesday after a month-long review by PUC, after the changes were delayed from their original implementation date in early June to accommodate the more in-depth review. It is the first utility in Oregon to adopt a new rate schedule for data center customers under the law.
The POWER Act was signed into law last year by Gov. Tina Kotek after the legislation passed the state’s Democratic-controlled legislature on votes that largely went along party lines in both chambers.
Kotek said in a statement that the POWER Act “was intended to ensure fairness and accountability when large energy users, like data centers, take up more load on Oregon’s electrical grid.”
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Oregon’s move comes amid concerns about the impact of the rapid build out of data centers powering artificial intelligence (AI) tools on the electric grid and the costs borne by consumers and other businesses.
The Data Center Coalition, a group representing data center owners, operators and builders, has said it supports efforts to protect consumers from price increases and data centers paying the cost of expanding grid capacity, but told FOX Business that Oregon PUC’s order is “significantly out of step with the approaches and best practices being implemented in many other states.”
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DCC’s vice president of energy, Aaron Tinjum, said in a statement to FOX Business that the group has filed a petition for Oregon PUC to reconsider its order, emphasizing that the data center industry is “committed to paying its full cost for the energy it uses to ensure that those costs are not shifted to other customers.”
“A workable approach, like those established in other markets, should align costs with cost causation, protect existing customers, and give data center customers a clear path to continue helping to drive clean energy and economic growth in Oregon,” Tinjum said.
“Protections should be evidence-based, structured carefully, and grounded in specific cost risks; otherwise they risk creating market friction, introducing uncertainty, and making Oregon less predictable and less competitive,” he added.
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