Portland utility slaps data centers with a 29% rate hike as home customers get a small break

Portland's largest electric utility wants data centers and other massive power users to shoulder a much larger share of the costs tied to rising electricity demand.

For households and small businesses, that could bring a rare bit of good news: lower rates instead of another increase.

According to Oregon Public Broadcasting, Portland General Electric proposed a 29% rate hike for "large load" customers, such as data centers, while lowering rates by 1.3% for residential customers and 2.2% for commercial customers.

The proposal is tied to Oregon's new POWER Act, which last year created a separate rate class for energy-intensive customers such as data centers, cryptocurrency operations, and other large industrial users.

The law applies to projects that use more than 20 megawatts of electricity, which is about what a major industrial facility, such as a paper mill, consumes.

PGE said at least 16 data centers would be affected by the change.

The utility's filing still requires approval from the Oregon Public Utility Commission, and if regulators sign off, the new rates would take effect June 10.

The proposal comes as Oregon's data center footprint continues to grow.

The Data Center Map shows Oregon now has 125 data center facilities, and those operations can require enormous amounts of electricity to support cloud computing and artificial intelligence systems.

Oregon households have faced rising utility bills for years, and PGE increased residential rates by 5% in April, adding roughly $8 to a typical monthly bill.

Consumer advocates have argued that residential customers were shouldering too much of the burden for new infrastructure needed to serve rapidly growing data center demand.

The Oregon Citizens' Utility Board said residential customers were paying more than double the per-kilowatt-hour rate charged to data centers.

The POWER Act is the main driver of the proposal, providing PGE and other utilities with a clearer framework for charging large new electricity users more directly for the costs they create.

PGE said that, going forward, higher-use data centers would pay the growth costs tied to them instead of leaving residential and small-business customers to absorb them.

The utility described the plan as a way to support economic development without undermining affordability.

Regulators still must review the proposal, and consumer groups said more work may be needed.

Oregon CUB has argued that some costs, including local poles and wires, still fall disproportionately on residential customers, meaning additional rate changes could emerge in future cases.

PGE spokesperson Drew Hanson said the new structure should "even out and lessen the pressure on all other customer groups."

Oregon CUB Executive Director Bob Jenks said, "With the new rate structure, we should see a slowdown in the significant increases to home PGE bills."

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