March 9, 2025
Public hearing – March 7
The surge in electricity demand from large data centers is negatively impacting other electricity consumers, who are already beginning to pay higher rates. Under current electricity pricing approaches, for-profit public utilities like PGE and PacifiCorp (also called “electric companies”) have an incentive to preferentially serve data centers. This is because the data centers’ need for a great deal of power incentivizes the utilities to engage in profit-making buildout of more electric power plants. Other electricity consumers, including low-income residential consumers, are in charged higher rates – while the benefit of the new infrastructure built on their money goes mainly to the big data centers.
This bill provides a corrective to this damaging and unfair new dynamic in electricity markets. Under this bill, Oregon’s Public Utility Commission will require electric companies to enter into contracts of at least 10 years duration with big data centers that use 20 MW or more power. Thise contracts must require the data center to pay a minimum amount based on their electricity usage, and this amount may include further charges for excess demand.
The bill also defines the big data centers as a new class of consumers for which a specific new ratemaking process will apply. The costs of serving this new class of big data center consumers will be borne by the big data centers themselves. These costs must include the costs of transmission, distribution, energy and capacity, and any other costs involved.
The bill also requires the electric companies to mitigate the risks to other consumers. The electric companies’ servicing of the data centers is expensive. Under this part of the bill, current ratepayers will not be on the hook for paying those added costs.
The bill will apply to any large data center that submits an application for electricity service on or after the effective date that this bill passes. It also declares an emergency, being essential to preserving the public’s peace, health and safety.