Oregon forces data centers to pay

The Oregon Public Utility Commission on May 7 approved a new rate structure for large data centers and other big-load customers served by Portland General Electric, moving costs for grid expansion and power procurement more directly onto those users. The order creates a new customer class, Schedule 96, under Oregon’s 2025 POWER Act, which requires large energy users to pay a proportional share of the costs they impose on the system. PUC Chair Letha Tawney said the decision was meant to keep “explosive data center growth” from raising bills for households and small businesses. Portland General Electric said the order lets it charge data centers more for infrastructure tied to their growth while it works out the final customer impacts. ### What did Oregon regulators actually approve? The May 7 order created Schedule 96, a separate rate class for large data centers and other large-load customers on PGE’s system. The Oregon PUC said the class was required by House Bill 3546, the POWER Act, which became law in 2025 and directed regulators to create a classification for large energy use facilities. The new framework requires those customers to pay charges tied more closely to the costs of serving their load. (flashalert.net) The PUC said that includes making data centers’ bills reflect the infrastructure built for them, while also imposing new contract requirements on future agreements between PGE and data center customers. ### Which customers get hit by the new charges? Oregon’s POWER Act applies to large energy use facilities consuming more than 20 megawatts, according to reporting on the law and the PGE tariff case. (flashalert.net) PGE spokesman Ben Morris told OPB that 16 data centers would be affected by the commission’s order. The order also adds an extra surcharge for the very largest facilities. The PUC approved a 1-cent-per-kilowatt-hour surcharge for Schedule 96 customers with 100 megawatts or more of allocated system capacity, with revenue directed to programs intended to offset residential customer costs, including low-income bill-reduction programs. (flashalert.net) ### How do the rules make data centers pay more? RTO Insider reported that the order requires large data centers to cover 100% of the distribution expansion costs associated with serving them through a flat billed distribution charge. (opb.org) The same report said the PUC imposed minimum transmission and generation demand charges set at 90% of contracted capacity. The commission also adopted penalties and contract terms aimed at limiting stranded-cost risk. (flashalert.net) If a data center exceeds its allocated system capacity, it must pay an exceedance penalty of four times the transmission rate and 1.5 times the generation rate per hour, RTO Insider reported, citing the order. The order also set minimum contract terms starting at 10 years for a 20-megawatt load and rising with project size, up to 30 years for loads of 220 megawatts or more. (rtoinsider.com) ### Why is Oregon doing this now? Oregon lawmakers passed House Bill 3546 in 2025 after disputes over whether fast-growing data-center demand was pushing system costs onto ordinary ratepayers. The law requires investor-owned utilities to separate out large energy users and allocate the costs of serving them to those customers. Gov. Tina Kotek signed the bill in June 2025, according to state and legislative tracking records. (rtoinsider.com) The PUC said in its May 7 release that “very large loads can also push up the cost of the energy and equipment needed to serve other customers.” Tawney said the ruling was designed to give large users “clarity and predictability” while protecting other customers from the costs of rapid load growth. ### How does this fit into the wider U.S. power story? PJM Interconnection, the largest U.S. grid, saw first-quarter power prices jump 76% from a year earlier as demand from data centers tightened supply, according to reporting that cited grid monitor Monitoring Analytics. (fastdemocracy.com) Bloomberg reported wholesale prices rose to $136.53 per megawatt-hour from $77.78 a year earlier, while TechCrunch cited Monitoring Analytics as saying the customer impacts were “very large” and “not reversible.” (flashalert.net) A separate market report highlighted by Vice said data-center demand is reshaping where power capacity, new generation and balancing resources are needed in the United States. CleanTechnica, citing the U.S. Energy Information Administration’s long-term outlook, reported that electricity use by data-center servers is expected to keep rising across commercial buildings, especially standalone facilities. (bloomberg.com) ### What happens next for PGE and data-center operators? Portland General Electric told OPB on May 12 that it had until June 3 to determine how the order would affect customers, and said residential and small-business customers should see some bill relief once the changes are implemented. PGE separately said it would keep working with regulators and stakeholders on implementation details after the commission’s order. (enerdatics.com) PacifiCorp, Oregon’s other major investor-owned utility, faces a separate implementation process under the same law. KTVZ reported on May 11 that PacifiCorp had already filed its own proposal aimed at shielding customers from costs tied to large energy users. (rtoinsider.com) (opb.org)