Oregon PUC Approves PGE's Data Center Rates, Effective July 8, a Day After Amazon and Three Others Asked It to Reopen the Order

The Public Utility Commission of Oregon on Tuesday approved Portland General Electric’s new data center tariffs, effective Wednesday, July 8: an average 29 percent rate increase for PGE’s data center customers and small decreases for every other class ^[1]. The day before, four parties had asked the Commission to reopen the May order those tariffs carry out ^[6,7,8,10]. The rates are in force. The order behind them is under challenge.

This is a state commission case, Docket UM 2377, and the first time Oregon has applied the 2025 POWER Act, House Bill 3546, to a utility ^[3].

What the Commission approved on July 7

The underlying decision is Order No. 26-154, entered May 7 ^[3]. It created Schedule 96, a rate class for data centers that use or can use 20 megawatts or more, the POWER Act’s threshold ^[3]. It set minimum transmission and generation demand charges at 90 percent of contracted capacity, a flat distribution charge covering 100 percent of the cost of expanding the distribution system, exceedance penalties and exit fees ^[3]. Contract terms start at 10 years for a 20 MW load and add a year for each 10 MW increment, up to 30 years for 220 MW or more ^[3]. Customers with 100 MW or more of allocated system capacity pay a 1 cent per kWh surcharge ^[3].

PGE filed its compliance tariffs, Advice No. 26-24, on June 3, asking for a June 10 start ^[5]. The Commission took more time instead; Chair Letha Tawney said then that staff needed it “to carefully review the large volume of tariff updates to prevent errors” ^[4]. PGE filed corrections on June 30 and July 2 ^[1,2].

Staff’s July 1 report counts more than 175 updated tariff sheets ^[2]. The package creates Schedule 96 and its direct access versions (Schedules 496, 596 and 696), rewrites terms in Schedules 89 and 90 for large nonresidential customers, creates Schedule 111 to collect the surcharge, and revises Rule I, which governs new connections, line extensions and system upgrades ^[2]. PGE also wrote in an interconnection queue for Schedule 96 and said it would develop the queue’s management practices and bring any needed tariff changes to its next general rate case ^[5].

Staff listed seven fixes made between filing and approval ^[2]. Three bear directly on data centers:

• PGE had extended its uniform industrial pricing to Schedule 96 without counting Schedule 96’s own revenue requirement and load in the calculation ^[2].
• The exceedance penalty language in Schedules 89 and 90 did not say it applies only to customers who signed a Large Load Customer Agreement, as the order directed ^[2].
• Schedule 111 originally said PGE would collect, administer and disburse the surcharge money itself. Staff found that was not in the order or the testimony, and the provision came out; administration will be settled in a later proceeding ^[2].

The Commission adopted the staff recommendation and approved the rates effective July 8 ^[1]. OPB reported the vote as unanimous ^[12].

Who pays more, and how much

The Commission’s figures: data centers up an average of 29 percent; residential customers down 1.3 percent; commercial down 2.1 percent; other industrial customers down 1.4 percent ^[1]. A typical residential customer using 780 kWh a month saves about $1.91 ^[1]. PGE says the changes affect about 963,000 customers, and the June release said they were not expected to change the company’s overall revenues ^[1,4]. The money moves between classes; PGE’s total does not.

Compare the June 3 filing: commercial was down 2.2 percent and industrial down 1.5 percent ^[5]. The corrections moved a little cost back onto those classes. Staff’s report also gives the residential saving as about 1.1 percent of a typical bill, slightly less than the class average ^[2].

Staff flagged three items it did not settle. Whether Schedule 96 should share PGE’s uniform industrial rates goes to the next general rate case; staff wrote that it “prefers that Schedule 96’s rate design not be influenced by other schedules and vice versa” ^[2]. A change to Schedules 83 and 85 that recovers all fixed costs through the demand charge was in PGE’s testimony but, staff wrote, “no party either found the change or took issue with it,” and staff plans to look again ^[2]. The third is a Peak Growth Modifier credit for classes that lowered their contribution to peak demand, which staff called consistent with the order but open to a future proceeding ^[2].

None of the documents gives a megawatt total for the data centers now on Schedule 96. The order does cite the Coalition’s testimony that PGE’s data center customers run at a 79 percent load factor ^[3].

Four requests to reopen the May order

Order No. 26-154 gave parties 60 days from service to seek rehearing or reconsideration ^[3]. July 6 was the 60th day after the May 7 entry, by this column’s count, and four parties used it.

Amazon Data Services challenges one piece: the data-center-only interconnection queue ^[6]. The order says customers in that queue “will not be served until a reliable plan of service” exists that does not impede PGE’s obligations under HB 2021, Oregon’s clean electricity law ^[3]. Amazon argues the order subordinates PGE’s statutory duty to serve to HB 2021 targets and shifts the utility’s compliance burden onto customers ^[6]. It also points to FERC’s June 18 show-cause orders to six regional grid operators on large-load interconnection, saying they raise questions of “federal and state consistency” ^[6].

The Data Center Coalition asks for more. Its list includes the queue, the 1-cent surcharge, the minimum bills and exceedance charges, the Peak Growth Modifier, new reporting requirements and the compliance timing ^[7]. Its sharpest number: a new 225 MW data center would face “more than $1.5 billion in financial obligations before taking any service” from contract terms and exit fees, a figure it says counts only minimum obligations and asks PGE to verify ^[7]. It argues the combined requirements “will drive new data-center development outside of the Company’s service territory” ^[7].

Verrus, which describes itself as an asset-backed flexible data center developer, says it does not oppose an exit fee that recovers reasonable stranded costs ^[10]. Its objection is that the adopted fee “could result in amounts as great as ten times the actual stranded costs” ^[10]. The order chose the Coalition’s version, an exit fee worth the expected transmission, generation and distribution charges for the length of the contract ^[3].

The Alliance of Western Energy Consumers challenges the minimum demand charges and exceedance penalty applied to Schedules 89 and 90, not Schedule 96 ^[8]. It argues the Commission could not approve changes to schedules PGE had never filed ^[8]. AWEC calculates that a Schedule 90 customer assigned growth costs under the Peak Growth Modifier would see a 35 percent increase for the new growth ^[8]. It also filed a separate complaint asking for a hearing on the compliance filing itself, calling it a general rate revision that should carry the supporting information a rate case requires ^[9].

On the other side, the Coalition of environmental and community groups supported the compliance filing and asked the Commission to open a separate docket on who administers the Schedule 111 money, naming the Energy Trust of Oregon as the administrator it had proposed ^[11]. In the May order, the Commission answered the leave-the-territory argument directly: the risk that the queue shifts data centers to utilities outside HB 2021 “does not obviate our duty to see HB 2021’s mandates fulfilled” ^[3]. Tawney’s statement on Tuesday framed the rates as “enabling responsible data centers to pay their own way” ^[1]. PGE’s Ben Morris told OPB the company will be the first utility to put the POWER Act into practice ^[12].

What I’m watching

The reconsideration ruling. The rates took effect regardless; what the four applications can change is the order’s structure, starting with the queue and the exit fee ^[6,7,10]. The Commission had not set a date for its answer in the documents this column draws on.

January 2027. Gov. Tina Kotek is waiting on her Data Center Advisory Committee’s recommendations and plans to work with lawmakers when the session opens in January, OPB reported ^[12]. The Data Center Coalition has already put that committee’s record into this docket ^[7].