Pacific Power agrees new Oregon data centres will pay for what they need
Victoria Shinder2 min readPacific Power, Oregon's second-largest investor-owned utility, has agreed to directly assign to data centre operators the costs of the new generation and infrastructure needed to serve them. The agreement was reached after months of negotiation with staff of the Oregon Public Utility Commission, the Citizens' Utility Board and several environmental and community groups, according to a report by the Oregon Capital Chronicle. The three-member commission is expected to decide on it on 13 November.
The deal implements Oregon's POWER Act, which requires the state's monopoly utilities to create a separate rate class for data centres so that other customers do not subsidise their demand. Under Pacific Power's proposal, new data centres would pay for all new generation and storage projects needed to power them, including power plants and batteries, even if those additions also benefit other customers; for upgrades built to serve them; for the wires and poles delivering their power; and for energy bought on the market for them. Shared transmission would be split by demand: in the Citizens' Utility Board's example, a 50 MW data centre served by a 100 MW line alongside other customers would pay half of it.
The Citizens' Utility Board called it the strongest agreement from a for-profit utility yet under the law. Its spokesperson expects the Data Center Coalition, which represents the tech companies, to try to appeal. Portland General Electric's own approach, approved in July, allocates costs by how much each class adds to peak demand and led to a data-centre rate increase of nearly 30%. According to the report, both utilities have raised customer rates by about 50% since 2020, while data centres grew to nearly a quarter of retail electricity sales in the state.
What it means
Oregon is one of the first states to turn the question "who pays for data-centre load?" into a statutory rate class with specific rules. Pacific Power's version goes further than PGE's by charging data centres for new resources even when others benefit from them, which removes the argument that a power plant built for a campus is a general system asset.
The appeal the consumer group expects will test how far a state can go. The outcome will be read well beyond Oregon, because the same question is being asked wherever hyperscale demand arrives faster than generation and transmission can be built.