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Regulators with the Oregon Public Utilities Commission have approved a 29% rate increase for data centers—a provision of a 2025 law intended to hold the power-hungry facilities accountable for their impact on the electric grid.
On Tuesday, the PUC announced it had agreed to Portland General Electric’s request to update its rates and terms of service, which now call for steeper rates for the booming data center industry.
In addition, residential customers will see rates decrease by an average of 1.3%. (Assuming monthly use of 780 kilowatt hours, a residential customer saves around $1.91 per month.) Commercial customers will see an average decrease of 2.1% while industrial customers save an average of 1.4%.
The rate hike for data centers was mandated by the POWER Act, approved by the Oregon Legislature in June of last year. The act sets separate rates for data centers and establishes them as their own unique category of industrial energy user.
Impacted companies in the Portland area include QTS, Flexential and Aligned Data Centers. All of them operate near Hillsboro, which has become the locus of a statewide fight over the tech industry. Outside Washington County, Amazon, Meta and Google operate data centers in rural parts of the state—and the rate hike applies to them, too.
The law was intended to prevent small electric customers from subsidizing infrastructure for data centers and to get them to pay their fair share, though a determination of exactly how much was left to PGE and the PUC. PGE submitted its proposed rate increase June 3, but the commission imposed a moratorium to study the complex issue.
Despite booming demand, data centers have faced nationwide backlash for their massive power and water consumption and other issues like noise—and generous incentives that critics call unnecessary.
The POWER Act also applies to cryptocurrency facilities, though none has yet been constructed in Oregon. And it also requires data center companies to pay for infrastructure and technological enhancements, which could further benefit small ratepayers.
The POWER Act was co-sponsored by state Sen. Janeen Sollman (D-Hillsboro), who in May lost a primary race that largely hinged on the data center issue. Her opponent, Forest Grove educator Myrna Muñoz, appealed to public disapproval of data centers and accused Sollman of catering to data centers due to her support for an unrelated bill.
Sollman tells WW other states have inquired with the PUC about the POWER Act, which she called groundbreaking.
“This is a major win for ratepayers,” she says. “It’s also very exciting that other states are looking at the POWER Act, because this isn’t just an Oregon issue. This is a nationwide issue.”
