PGE Data Center Rates Jump 29.7% as Oregon’s POWER Act Kicks In

The Oregon Public Utility Commission unanimously approved a 29.7% rate increase for Portland General Electric’s largest energy customers Tuesday, the first major rate hike the state has issued under its 2025 POWER Act for data centers, cryptocurrency operations, and other big industrial power users. The new rates take effect Wednesday, July 8, across PGE’s service area. Residential customers get a 1.3% residential decrease in the same change.

The vote makes PGE the first utility in Oregon to implement the POWER Act. The order also approves new service terms, a charge to fund energy-assistance programs, and updated rules for how new large users connect to PGE’s system. Commission Chair Letha Tawney said the structure is meant to keep regulators ahead of a bigger cost problem.

What Tuesday’s Order Does

The order reshuffles who pays for the grid expansion that PGE has built for its biggest customers. Most ratepayer classes get a small cut. Data center and cryptocurrency operators absorb the bulk of the new cost.

PGE serves about 963,000 customers in Oregon. Smaller commercial customers will see a 2.1% decrease, and other industrial customers will see a 1.4% decrease under the order. PGE has said 16 data centers fall under the new rate class starting Wednesday.

How the Rates Reshuffle

The new rate class inverts a long-standing pricing gap inside PGE’s territory. Before the POWER Act, detailed in the legislature’s POWER Act overview PDF, PGE’s data center customers paid about 8 cents per kilowatt hour, while residential customers paid closer to 20 cents per kilowatt hour, more than twice as much. The new rates ask the largest energy users to move closer to covering their own grid impact.

An Oregon Citizens’ Utility Board analysis found PGE spent $210 million on grid expansion tied to data center growth in Hillsboro last year alone. The watchdog has tracked PGE bills rising nearly 50% over the last five years. Robert Jenks, the group’s executive director, called the rate change “what is right for Oregonians” at a Thursday press conference in Salem. He’s now expecting data center operators to file an appeal of Tuesday’s order.

These changes ensure that costs created by data centers in PGE’s territory are more accurately reflected in their rates. By putting this structure in place now, we are getting ahead of a bigger issue, enabling responsible data centers to pay their own way, and protecting customers from higher costs in the future.

Commission Chair Letha Tawney issued that statement as part of Tuesday’s order. Senior commission economist Bret Stevens told commissioners the revisions yield “just and reasonable rates.”

The residential cut works out to about $1.91 a month less for a typical customer, PGE said. Governor Tina Kotek applauded the commission’s vote and called it a win for Oregonians. She said the POWER Act was designed to keep working families and small businesses from absorbing costs created by data centers. The Data Center Coalition, which represents 42 data center owners and operators, has called the order punitive. Coalition vice president of energy Aaron Tinjum said his members fully support paying transmission and renewable energy costs but called the order “out of step” with what other states are imposing.

The Four-Week Path to Approval

The vote capped a four-week correction process that started in early June. PGE submitted an updated proposal after commission staff flagged issues with the original filing. The utility and commission staff worked through what PGE called “technical clarifications.”

PGE spokesperson Ben Morris said the back-and-forth produced a small bump in the originally proposed rate. The 29% figure became 29.7%. The 1.3% residential decrease stayed at 1.3%. The commission declined the Alliance of Western Energy Consumers’ request for another suspension and a formal hearing. The alliance argued PGE’s revisions were extensive enough to qualify as a fresh general rate case.

1. Early June 2026: Oregon PUC puts PGE’s proposed data center rate hike on hold for further review.
2. June 10, 2026: PGE’s originally requested effective date slips as the review extends another month.
3. July 7, 2026: PUC unanimously approves a revised 29.7% rate increase.
4. July 8, 2026: New rates take effect across PGE’s service area.

The New Rules Wrapped Around the Rate

Tuesday’s order does more than reset kilowatt-hour prices. It restructures service terms for PGE’s largest users. New rules govern how large new customers connect to the grid.

A new charge funds energy-assistance programs for low-income households. Large customers connecting to PGE must commit to ten-year contracts under the POWER Act. They must meet renewable energy requirements before going live. Data centers that halt work before completing a project will pay exit fees.

Local opposition to data centers has been building alongside the buildout. La Pine residents packed hearings against a proposed 20-megawatt facility in their area. A land use nonprofit, a city councilor, and a teachers’ union have joined a lawsuit over enterprise zone tax breaks tied to data center projects.

Environmental groups including the Green Energy Institute at Lewis and Clark Law School have called for new disclosure rules on water use and pollution. Kotek signed the POWER Act at a 2025 ceremony attended by climate and consumer groups. She is now leaning on her Data Center Advisory Committee to settle on broader reforms later this year. The next Oregon legislative session convenes in January 2027. Other states are drafting bills similar to Oregon’s POWER Act, with most still in the discussion phase.

Hillsboro’s Data Centers Take the Hit

Hillsboro sits at the center of Oregon’s data center boom. The city’s data center community portal lists major operators and their footprints across the territory. Five major data center operators run campuses inside PGE’s service area. The new 29.7% rate lands directly on the bills each of them will pay for grid power starting Wednesday.

PGE’s first 16 in-territory data center customers will see the new rate on Wednesday’s billing. The Hillsboro cluster is now both the largest test case for the law and the most likely source of a legal appeal. Jenks, of the Citizens Utility Board, told reporters he expects operators to file an appeal within weeks. The Data Center Coalition has signaled it will press the case through the courts.

Major PGE-Territory Data Center Operators

• Flexential
• Stack Infrastructure
• QTS
• NTT
• Digital Realty Trust

Beyond Tuesday’s Vote

Kotek said she is leaning on her Data Center Advisory Committee to set additional guardrails on top of the POWER Act. She is awaiting the panel’s recommendations later this year. The next Oregon legislative session convenes in January 2027.

The PGE vote puts Oregon’s POWER Act into practice for the first time since the law passed as House Bill 3546 in 2025. Other states are drafting similar bills, with most still in the discussion phase. Oregon’s commission order is final unless a court reverses Tuesday’s decision.

Jenks expects the appeal to land within weeks of the order. Energy-assistance programs funded by the new charge should roll out in tandem with the rate change. Oregon’s first POWER Act test starts Wednesday, and the rate order will not be the last word.