The Oregon Public Utility Commission (PUC) has approved updated electricity rates that PGE is required to implement under the POWER Act, a policy signed last year by Governor Tina Kotek to align charges with cost causation and support grid expansion. Beginning this week, Portland General Electric (PGE) will apply a data-center rate increase that the commission says will better reflect the electricity usage of large data-center facilities, while residential and other rate classes see reductions under the same framework.
Under the order, data-center customers face an average rate rise of 29%. Residential customers are slated for an average rate decrease of about 1.3%, commercial customers roughly a 2.1% decline, and other industrial customers about a 1.4% drop. The PUC finance and economics staff estimated that roughly 963,000 customers in PGE’s service territory will be affected as the changes take effect after a month-long review.
Commission Chair Letha Tawney said the adjustments ensure that costs created by data centers in PGE’s territory are more accurately reflected in their rates. The commission added that the updated price signals will promote fairness by tying charges to actual consumption patterns of large energy users and by helping prevent cross-subsidies that could shift costs onto other customers.
Oregon’s move comes amid concern about the rapid growth of data centers powering AI models, cloud storage, and other digital services. The POWER Act was designed to bring accountability to how big energy users influence the grid, a goal Governor Kotek emphasized when the law was enacted.
PGE’s rate changes were formally approved after the PUC’s review, and the changes were delayed from an initial implementation date in early June to allow for the in-depth examination. Oregon becomes the first state utility to adopt a new data-center rate schedule under the POWER Act.
Industry representatives recognize the policy’s intent but have urged approaches that more closely reflect cost causation and avoid shifting a higher burden onto other customers. The Data Center Coalition (DCC), which represents data-center owners, operators, and developers, told FOX Business that while it supports protections for consumers and cost-sharing for grid expansion, the Oregon PUC’s order is significantly out of step with approaches and best practices seen in other markets.
Aaron Tinjum, DCC’s vice president of energy, stated that the group has filed a petition for the PUC to reconsider its order. He stressed that the data-center industry remains committed to paying its full share of the energy it uses and that a workable framework should align costs with cost causation, protect existing customers, and provide data-center customers with a clear path to continue backing clean energy and economic growth in Oregon.
The commission emphasized that the new structure aims to prevent future rate shocks and ensure that the cost of expanding grid capacity to serve data centers is borne by those centers rather than by other customers. Advocates argue that data centers are a growing economic driver for the state, while opponents warn that higher energy bills could affect households and businesses as the grid scales up.
