Oregon Lawmakers Want to Protect Residents from Data Center Power Costs

Oregon lawmakers are creating legislation to protect residential consumers from the growing cost of supplying power-hungry high-tech data centers.

Electricity Consumption Expected to Reach Unprecedented Levels

Electricity consumption is forecast to reach unprecedented levels by the end of the decade, and lawmakers are concerned that residential customers will have to share the cost. With the state shifting towards electric vehicles, appliances, and machinery and away from fossil fuels, electricity consumption will increase exponentially.

Data centers dotting the landscape statewide are a familiar sight, and laws already exist categorizing a fair-share payment structure, depending on the type of consumer. Nevertheless, state regulators have been blind-sided by the increasing levels consumed by the high-tech industries.

Lawmakers want data centers to carry the brunt of the costs for new transmission lines and electricity plants needed to serve the mushrooming high-tech industry.

Residential customers have already been exposed to several hikes in the cost of electricity over the last four years, with power bills in Portland rising 50%.

LC 1547 Has Been Written by Rep. Pam Marsh, D-Ashland

The new legislation, known as Legislative Concept 1547, has been written by Rep. Pam Marsh, D-Ashland, and addresses price-hike challenges posed to Oregonians by the flourishing tech industry.

LC 1547 directs the Oregon Public Utility Commission to create a new class of customers for industries with base loads of at least 25 megawatt hours. The commission must ensure that big-power contracts will not result in risks or increased costs to other customers.

The legislation also calls for power-hungry consumers to commit to decade-long contracts. A payment provision ensures that the companies are held liable for a percentage payment of the cost of new transmission lines and power plants.

The proposed legislation is supported by Bob Jenks, director of the Oregon Citizens Utility Board, an advocate for residential customers, and applies to utilities, including PacifiCorp and Portland General Electric.

Legislation Could Prove Contentious

Observers believe the legislation could prove contentious.

Also, sight must not be lost of the fact that wealthy tech companies like Amazon, Apple, Google, and Meta, have tremendous clout in Oregon.

Two years ago, a proposal that data centers be subject to the same clean energy requirements as those applying to other industries was dropped by lawmakers who then also extended the tax break benefits program to 2032.

Data Center Consumption Could Quadruple by the End of the Decade

Power-hungry data centers presently consume more than 10% of all state electricity, and authorities expect this demand to double, if not quadruple, by the end of the decade.

To put this forecast into perspective, industry insiders believe that data centers could consume almost as much electricity as used today by all residential properties in Oregon and Washington.

The development of energy-intensive artificial intelligence is expected to play a major role in skyrocketing demands.

Oregon has one of the largest data center marketplaces in the U.S., a scenario unlikely to change because of the lucrative tax incentives offered by the state to entice the industry to make the state their home. The tax breaks will save tech companies billions of dollars in property taxes in future years.