A new data center can bring jobs and investment to an Oregon community. It can also require a power company to build miles of electrical lines, expand substations and secure enough electricity to keep servers running around the clock. The question before state regulators is who pays for that work after the facility opens.
Pacific Power has reached an agreement that would place the costs of serving new, large data centers on the facilities themselves. The proposed terms would cover new power generation and storage, electricity purchased to meet their demand, local electrical equipment and a share of larger transmission projects. The agreement was filed with the Oregon Public Utility Commission on September 16 and still requires its approval.
The proposal follows Oregon’s 2025 POWER Act, which requires a separate rate class for large computing and data processing facilities. It applies to facilities using, or reserving capacity for, at least 20 megawatts of electricity. The law is intended to keep the expense of serving those customers from being unfairly passed to households and other businesses.
Under the agreement, a new data center would pay for the generation and storage projects needed to supply it, even when those projects also provide some benefit to other customers. It would cover the power Pacific Power buys on the market to serve the facility, along with local poles, wires and other distribution work required for the connection.
Larger lines and substations that serve several kinds of customers would be handled differently. Their costs would be shared according to use. If a data center accounted for half the demand served by a new transmission line, it would be assigned half that line’s cost.
Those details matter well beyond the communities where data centers are built. A household may never see a server building, but utility investments can affect customers across a service area. Oregon regulators have already approved a separate Pacific Power change requiring very large new customers to pay a greater share of certain upfront connection costs. The new agreement addresses the wider expense of supplying their electricity over time.
The proposed protections would appear in individual service contracts reviewed by the Public Utility Commission. Data centers using more than 100 megawatts would also pay a surcharge to support energy efficiency improvements for low-income households. The agreement calls for flexibility in their electricity use to help protect the reliability of the system when supplies are strained.
Pacific Power’s proposal concentrates on new facilities. The treatment of its existing data centers remains for a later proceeding. That also means current residential customers should not expect this agreement, by itself, to lower their bills. Its immediate purpose is to keep future data center growth from adding unwarranted costs to those bills.
The pressure to settle that question is growing. The U.S. Department of Energy estimated that data centers consumed 4.4 percent of the nation’s electricity in 2023 and projected that their share could reach between 6.7 percent and 12 percent by 2028. Those are national projections, but they show why utilities must plan for facilities whose power needs can be far larger than those of ordinary commercial customers.
For Oregon, the commission’s decision will determine the rules Pacific Power uses as new data centers seek service. Until regulators act, the agreement remains a proposal. If approved, each new qualifying facility would face a clearer obligation to pay for the electrical system its arrival requires, before those costs find their way into everyone else’s rates.