Oregon’s state utility regulator is implementing a new rule starting Wednesday that will increase the electricity bills data centers and other large energy consumers to enable lower rates for other customers.
The Oregon Public Utilities Commission (PUC) approved updated electricity rates for data centers and other residential and commercial customers that Portland General Electric (PGE) was required to modify under a state law known as the Protecting Oregonians With Energy Responsibility (POWER) Act.
Under the law, PGE will increase rates by an average of 29% for data center customers, while residential customers will experience an average decrease of 1.3%, commercial rates will decrease by an average of 2.1%, and rates for other industrial customers will decrease by an average of 1.4%. PUC estimates that this decision will affect approximately 963,000 customers in PGE’s service territory.
“These changes ensure that the costs generated by data centers in PGE’s territory are more accurately reflected in their rates,” said Commission Chair Letha Tawney. “By putting this structure in place now, we get ahead of a bigger problem, allowing responsible data centers to pay for themselves and protecting customers from higher costs in the future.”
VIRGINIA COUNTY URGES ENERGY SAVING MEASURES AMID 25% HIKE IN ELECTRICITY RATE AND DATA CENTER GROWTH
Data centers located in PGE’s coverage area will pay higher electricity rates under the new Oregon law. (Amanda Andrade-Rhoades for The Washington Post via Getty Images)
The PGE rate changes officially take effect Wednesday following a month-long review by the PUC, after the changes were delayed from their original implementation date in early June to allow for further review. It is the first utility of Oregon to adopt a new pricing schedule for data center customers under the law.
THE POWER law was signed into law last year by Gov. Tina Kotek after the legislation passed the Democratic-controlled Legislature on votes largely along partisan lines in both chambers.
Kotek said in a statement that the POWER Act “aims to ensure fairness and accountability when large energy users, like data centers, take on more of the load on Oregon’s power grid.”
THE DATA CENTER BOOM POWERING THE AI REVOLUTION MAY DRAIN US NETWORKS – AND WALLETS
Data centers help power AI models and enable cloud storage and other digital tools. (Lexi Critchett/Bloomberg)
Oregon’s decision comes amid concerns about the impact of rapid development of data centers powering artificial intelligence (AI) tools on the electricity grid and the costs borne by consumers and other businesses.
The Data Center Coalition, a group representing data center owners, operators and builders, said it supports efforts to protect consumers price increases and data centers paying the cost of expanding network capacity, but told FOX Business that the Oregon PUC order is “significantly out of step with approaches and best practices implemented in many other states.”
DATA CENTERS RAPIDLY TRANSFORM SMALL AMERICAN CITIES
The rapid construction of AI data centers has increased the load on the power grid. (Marc Félix/Bloomberg via Getty Images)
Aaron Tinjum, DCC’s vice president of energy, said in a statement to FOX Business that the group filed a request for the Oregon PUC to reconsider its order, emphasizing that the data center industry “is committed to paying the full cost of the energy it uses to ensure those costs are not shifted to other customers.”
“A feasible approach, like those established in other markets, should align costs with their causation, protect existing customers, and give data center customers a clear path to continue contributing to clean energy and economic growth in Oregon,” Tinjum said.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
“Protections must be evidence-based, carefully structured, and grounded in specific cost risks; otherwise they risk creating market friction, introducing uncertainty, and making Oregon less predictable and less competitive.”