Oregon's Public Utility Commission (PUC) has approved a significant increase in electricity rates for data centers and other large energy users, effective Wednesday, as mandated by the Protecting Oregonians With Energy Responsibility (POWER) Act [1]. Under the new rule, Portland General Electric (PGE) will raise rates for data center customers by an average of 29%, while residential customers will see an average decrease of 1.3%, commercial rates will fall by 2.1% on average, and other industrial customers will experience a 1.4% decline [1]. The PUC estimates that approximately 963,000 customers across PGE's service territory will be affected by these changes [1].
The POWER Act was signed into law last year by Governor Tina Kotek after passing the state's Democratic-controlled legislature, with the intent to ensure fairness and accountability for large energy users such as data centers that place significant demand on Oregon's electrical grid [1]. Commission Chair Letha Tawney stated that the new rate structure ensures that costs created by data centers are more accurately reflected in their rates, protecting other customers from higher costs in the future [1].
The rate changes were initially scheduled for early June but were delayed for a month-long review by the PUC to allow for more in-depth consideration [1]. PGE is the first utility in Oregon to adopt this new rate schedule for data center customers under the POWER Act [1]. The move comes amid growing concerns about the rapid expansion of data centers, particularly those supporting artificial intelligence (AI) tools, and their impact on the electric grid and consumer costs [1].
The Data Center Coalition (DCC), representing data center owners and operators, expressed support for protecting consumers from price increases and for data centers paying the cost of grid expansion. However, the DCC stated that Oregon's approach is "significantly out of step with the approaches and best practices being implemented in many other states" [1]. DCC Vice President of Energy, Aaron Tinjum, noted that the group has filed a petition for the Oregon PUC to reconsider its order, emphasizing the industry's commitment to paying its full cost for energy to avoid shifting costs to other customers [1].
CONCLUSION
Oregon's new law marks a substantial shift in electricity pricing for data centers, aiming to balance grid costs more equitably among users. While residential and commercial customers will benefit from lower rates, data centers face a notable increase, prompting industry pushback and a petition for reconsideration. The outcome may influence future regulatory approaches to large energy users in other states.