Pacific Power, Oregon's second-largest investor-owned electric utility, has agreed to a deal that would let it directly assign the costs of new energy generation and grid infrastructure to data center operators rather than spreading those costs across all customers. The agreement follows months of negotiation with staff of the Oregon Public Utility Commission, the watchdog Citizens' Utility Board, and a handful of environmental and community advocacy groups, according to a report from Oregon Capital Chronicle.
Under the agreement, new data centers that receive power from Pacific Power would have to cover the cost of all new power plants and battery storage built to serve them, even when those additions also benefit other customers. They would also pay for grid upgrades needed to serve them, the wires and poles built specifically for their service, and the cost of any power the utility buys on the market to supply them. As an example cited by the Citizens' Utility Board, if a 100-megawatt transmission line is needed to serve a 50-megawatt data center along with other customers, the data center would cover 50% of the line's cost, corresponding to its share of overall demand.
The deal comes under Oregon's new POWER Act, which requires the state's monopoly electric utilities to create a separate rate class for data centers so other ratepayers aren't subsidizing their energy demand. The Citizens' Utility Board called the Pacific Power agreement "the strongest from a for-profit electric utility yet" under the law. It goes further than a plan approved in July for Portland General Electric, Oregon's largest utility, which assigns costs based on how much each customer class contributes to peak demand growth rather than overall demand — a plan that led PGE to raise data center rates by nearly 30% while residential bills declined slightly.
The three-member Oregon Public Utility Commission is expected to approve Pacific Power's deal on November 13, according to Citizens' Utility Board spokesperson Charlotte Shuff, who said the industry group Data Center Coalition is likely to attempt an appeal, as it did with the PGE proposal — a challenge state regulators already rejected. Pacific Power's plan applies only to future data center customers; the utility still needs to work out costs for its existing data center customers next spring. The company currently has "just a handful" of data center customers, but "dozens want to get onto their system, and some of them are massive," Citizens' Utility Board executive director Bob Jenks said.