PGE Seeks Increased Electricity Rates for Data Centers

Portland General Electric on Thursday filed a rate increase request for data centers that aims to protect residents and businesses from bearing the cost of new infrastructure and electricity demands from data centers.

The electric utility asked the Oregon Public Utility Commission for a 29% rate increase for data centers and rate decreases for residential and small business customers, in an effort to limit costs of energy infrastructure needed to power these facilities from falling on residents.

The proposed rate changes are associated with a docket filed in 2025 that invokes a 2025 law called the Oregon POWER Act for the first time in history. The POWER Act creates a new “customer class” for data centers, forcing them to pay the direct cost for their own energy usage. By creating a separate category for data centers, individuals are protected from paying for the energy cost and infrastructure required by the large centers.

The growth of data centers drives up energy bills for residents and local businesses in the area as demand increases. Backers of the POWER Act calculated that growth in data centers over the past five years has equated to adding 406,000 people to PGE’s system. Over that period, PGE’s household bills have increased by almost 50%.

PGE, the state’s largest electricity provider, said the new rate-setting mechanism will provide relief to household customers.

“As energy demand from large-energy users grows, this approach helps ensure the costs of new infrastructure are paid by the customers driving that growth, protecting residential and small business customers while continuing to support economic development across our region,” John McFarland, chief customer officer at PGE, said in an email statement.

In early May, PGE secured approval from the Oregon Public Utility Commission to create a new framework designed to fairly distribute electricity costs from data centers. The approval also included measures intended to manage data center growth, including “exit fees” if data centers abandon a project before their contract, a minimum charge that must be paid regardless of actual usage and special contracts supporting clean energy development.

That framework arrives amid a public backlash to the power and water use by data centers across Oregon—an issue that proved pivotal in several Democratic Party primary races last month.

Residential customers will see a 1.3% decrease in their rates, small businesses a 3.7% decrease, commercial customers a 2.2% decrease and industrial customers a 1.5% decrease.

If the Public Utility Commission approves the new rates, they will go into effect June 10.