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By Bill Poehler
Salem Statesman Journal
USA TODAY Network via Reuters Connect

The Oregon Public Utility Commission is expected to approve new rates for Portland General Electric customers that drastically increases the cost of electricity for data centers and reduces it for all other customers.

PGE on June 3 filed a rate case that would increase costs for data centers by 29 percent while reducing residential rates by 1.3 percent. The PUC delayed a decision on those rate changes until its July 7 meeting.

Oregon’s 2025 law, known as the POWER Act, was the first of its kind in the nation and separated data centers from all other classifications of customers.

鈥淭he PUC’s actions will represent an important milestone in carrying out the intent of the POWER Act, creating a more equitable system where the customers driving the greatest demand on our electric grid pay the costs associated with that demand,鈥� Gov. Tina Kotek held a press conference in East Salem on July 2.

There are 125 data centers in Oregon, according to datacentermap.com, with a dozen more in the planning stages.

Oregon Citizens’ Utility Board Executive Director Bob Jenks said data centers use 5.6 percent of the electricity in Oregon and expects that to rise significantly in the coming years.

鈥淏y all indications, we’re expecting a significant shift in costs from non-data center customers onto data centers in the commission order that’s coming out,鈥� Jenks said.

Jenks said he expects other benefits for residential customers to come from the law in future years.

Legislature separates data centers into their own class in 2025

separated data centers from other types of customers, including residential, and mandated 10-year contracts between the investor-owned utilities and data centers for rates.

The law was designed to ensure data centers would pay their fair share for the infrastructure and energy costs and not pass them off to residential customers.

Jenks said he expects some of the companies that own data center or representatives of them to appeal some of the POWER Act implementation.

鈥淎s they continue to grow and outpace the growth of any other customer class, we’ll see them absorbing more industrial costs and that puts less upward pressure on everyone else,鈥� Jenks said.

Although the PGE rate-setting process is nearly complete, Pacific Power is still in the process of creating its rates in compliance with the law. Jenks said he doesn’t expect the other investor-owned utility, Idaho Power, to file a case as it is in the process of exchanging its Oregon territory.

The law also doesn’t cover municipal power providers and co-ops.

鈥淲e’re hoping that the electric co-ops in other parts of the state that also provide power, they have also been looking at their needs as well and some of them have tried to make sure the costs locally for the data centers are more fair for the rate payers,鈥� Kotek said.

Kotek formed the Oregon Data Center Advisory Committee to come up with policy recommendations for data centers for the state Legislature to consider in the 2027 session.

鈥淲e will have some very specific actions coming out of the group by the fall that we will take into the next legislative session,鈥� Kotek said. 鈥淭he state will have a much more prominent role, making sure development of data center and other large users meets the needs of the entire state.鈥�