Oregon curbs data centre subsidies

The Oregon Public Utility Commission approved key parts of Portland General Electric’s proposal on May 8 to make large-load data centers pay more for the infrastructure needed to serve them. The order creates a separate customer class for large data center loads and adopts tools including growth-based cost allocation, minimum charges and exit fees, according to PGE and the commission. PGE said the changes are meant to protect residential and small-business customers from costs linked to rapid load growth. (portlandgeneral.com) (opb.org) ### What exactly did Oregon approve? The May 8 order approved a new customer classification, Schedule 96, for large-load data centers in Portland General Electric’s territory, PGE said. The utility said the commission also approved a peak growth modifier, with changes, to allocate more costs to customer groups driving demand growth. The Oregon Public Utility Commission said in a separate overview that it is reviewing how utilities assign the risks and costs of serving very large new loads. The commission said load growth from data centers, artificial intelligence and industrial development could lift electricity demand growth to as much as 4.7% annually over the next five years, after roughly 1% annual growth over the last 20 years. (portlandgeneral.com) ### Why are exit fees and minimum charges part of this? PGE said the order includes exit fees and minimum charges to protect other customers from stranded-asset costs if a large data center scales back or leaves after the utility has built infrastructure to serve it. (portlandgeneral.com) The company said those provisions are intended to ensure data centers commit to a certain level of payment. Letha Tawney, chair of the Oregon Public Utility Commission, said in a statement reported by OPB that “Oregonians should not bear the costs of explosive data center growth.” Tawney said the decision is intended to ensure the largest energy users in PGE’s service area “pay their fair share” while supporting grid reliability. (oregon.gov) ### How many customers are affected, and what will bills look like? Ben Morris, a PGE spokesperson, told OPB that 16 data centers will be affected by the order. Morris said the company knew data centers would be “paying a little bit more for the costs associated with growth,” while residential and small-business customers “should see some relief in their bills.” (portlandgeneral.com) PGE said it still has implementation work ahead. OPB reported that the utility has until June 3 to determine how the changes will affect customers under the revised rate structure. (opb.org) ### Why is this fight spreading beyond Oregon? The International Energy Agency said in 2025 that a 100-megawatt AI-focused hyperscale data center can consume as much electricity annually as 100,000 households. The agency said some facilities already under construction could use far more. (opb.org) A University of Houston survey released on May 18 found 85% of Houston-area residents use AI, but 63% opposed building a data center within one mile of their homes. The university said respondents’ concerns centered on grid reliability and energy demand. (opb.org) The U.S. Department of Energy said data centers consumed about 4.4% of total U.S. electricity in 2023 and are expected to account for about 6.7% to 12% by 2028. Bloomberg reported this month that power prices on the largest U.S. grid rose 76% in the first quarter amid demand from data centers. (downtoearth.org.in) ### What comes next in Oregon? June 3 is the next concrete date in the Oregon case. OPB reported that Portland General Electric must determine by then how the approved changes will flow through to customer bills, while the commission continues broader work on large-load policy and related tariff issues. (uh.edu) (opb.org) (energy.gov)