Oregon utility watchdogs say Portland General Electric’s proposed “Peak Growth Modifier” could shift long-lived grid upgrade costs from fast-growing data centers to households—despite the state’s new POWER Act. Here’s what’s in dispute, what PGE says, and what regulators decide next.
Oregon’s push to stop homeowners from subsidizing energy-hungry data centers is colliding with a high-stakes regulatory fight now unfolding around Portland General Electric (PGE). In recent reporting, the Oregon Citizens Utility Board (CUB) accused PGE of trying to sidestep the intent of the state’s new POWER Act—an affordability-focused law designed to make large-load customers like data centers pay a larger share of the power supply and grid infrastructure built to serve them. [1]
At the center of the dispute is PGE’s compliance proposal and a new cost-allocation tool it calls the “Peak Growth Modifier.” Supporters argue it’s a data-driven way to match costs to the customer groups driving growth during the most stressed hours on the grid. Critics say it effectively lets data centers pay more at first—then shifts decades of remaining costs back onto residential ratepayers over time. [2]
Why this dispute matters now
Oregon is already grappling with two realities at once: rapid growth in electricity demand tied to data centers and a cost-of-living crunch for households dealing with steeply rising utility bills. Recent coverage notes that PGE’s residential rates have climbed sharply in recent years, while demand growth from the industrial class that includes data centers has expanded much faster than household demand. [3]
Meanwhile, state leaders passed the POWER Act specifically to address a long-running concern—whether smaller customers are absorbing costs created by very large, highly concentrated electricity users. The law directs regulators to establish a new large-load customer class and build protections into how utilities allocate the costs of serving these customers. [4]
What Oregon’s POWER Act is intended to do
In plain terms, the POWER Act is Oregon’s attempt to create clearer “guardrails” so that when massive new electricity users arrive—especially data centers—the infrastructure required to serve them isn’t automatically socialized across everyone else’s bills. It requires Oregon’s investor-owned utilities to create a separate customer category for very large users and provides a framework for how infrastructure costs and risks should be handled. [5]
KATU’s reporting notes that the law instructs the Oregon Public Utility Commission (OPUC) to create a new industrial class for customers using more than 20 megawatts (a level commonly associated with data centers), along with related provisions intended to protect ratepayers. [6]
The watchdog’s core claim: “A workaround” that lasts decades
CUB’s argument is not that data centers should never pay more—rather, it’s about how long they should remain responsible for investments that are built largely to serve their growth.
According to OPB’s reporting (republished from the Oregon Capital Chronicle), CUB contends PGE’s plan would directly charge data centers for only the first three years of costs tied to infrastructure investments that are typically paid off over around 50 years. After that initial period, critics say the remaining costs could be spread across customer groups in a way that puts a significant portion back onto households. [7]
KATU similarly reports that CUB believes PGE’s plan could assign 34% to 45% of new power supply and transmission costs to residential customers, even though CUB argues data centers are the primary drivers of demand growth behind those investments. [8]
Real-world examples: Hillsboro-area upgrades and Washington County substations
This isn’t just theoretical. In the OPB story, CUB points to PGE’s Hillsboro Reliability Project, which it says had publicly available estimates around $210 million, and argues the demand driving the project came mostly from data centers and large high-tech facilities. Under the “Peak Growth Modifier” approach described, data centers could pay more up front, while households could still be assigned a substantial share of long-lived costs afterward. [9]
KATU’s coverage adds another example raised by CUB: two Washington County substations that CUB says cost $174 million, serving data centers and not residential customers—yet, under the disputed methodology, CUB claims residential customers could be allocated roughly 47% of those costs. [10]
(Importantly, PGE disputes the framing of what serves whom and emphasizes systemwide reliability and shared infrastructure—more on that below.) [11]
PGE’s defense: grid costs are driven by “peak demand,” not just total growth
PGE’s central point is that the grid—and the generation and transmission required to support it—must be built to reliably serve customers during the most stressed hours, when electricity use spikes (for example, during heat waves or extreme cold). In PGE’s view, the “fair share” question hinges on who is driving that peak-demand growth, not only who is adding total annual consumption. [12]
PGE spokesperson Drew Hanson described the “Peak Growth Modifier” as a rolling, backward-looking method that examines where growth occurred over the past three years and then uses that to guide how new shared infrastructure costs are allocated. [13]
OPB’s reporting explains how this can shift cost responsibility: even if households are a smaller share of total load growth, they may represent a larger share of growth during the system’s peak hours. PGE argues that’s relevant because peak is what forces many investments. [14]
“Dedicated” vs. “shared” infrastructure
One key distinction PGE makes is between:
- Dedicated infrastructure (for example, a substation serving a single customer), which PGE says the customer pays for; and
- Shared infrastructure (transmission lines, broader grid upgrades), which supports multiple customer classes and is harder to assign to one customer alone. [15]
That difference matters because much of the conflict is about whether certain big-ticket projects are effectively “for data centers,” or whether they should be treated as systemwide improvements that also support growing communities, business districts, and reliability needs. [16]
What happens to data center rates under PGE’s plan?
PGE argues the POWER Act’s new customer class gives regulators a better tool to assign costs directly to data centers than in the past. KATU reports Hanson saying the new data-center rate schedule could see a “substantial” increase—upward of 25%—while other classes could see decreases depending on final cost allocation decisions. [17]
CUB counters that the point of the law is not simply to raise data center rates for a few years—it’s to prevent long-term cost shifting for long-lived assets unless there’s evidence those assets are no longer primarily serving the large-load customers. [18]
What regulators are doing—and the timeline to watch
Both OPB and KATU report that the Oregon Public Utility Commission is reviewing PGE’s proposal, with a decision expected by the end of April (widely understood to mean April 2026 given the current schedule described in the coverage). [19]
KATU also reports that PGE planned to submit a revised proposal on Friday (following the story’s Dec. 16 update), though the utility did not detail what changes would be included. [20]
Separately, the OPUC has signaled in public materials that it is actively examining how costs and risks should be allocated for very large customers as Oregon grapples with large-load growth. [21]
The bigger picture: Oregon’s data centers are part of a national energy-and-AI crunch
Oregon’s fight is local, but it’s happening amid a widening national debate over who pays for the infrastructure behind the AI and cloud boom.
- National political scrutiny: On Tuesday, three U.S. senators said they were investigating whether electricity costs tied to data centers are being unfairly passed on to ordinary consumers and called for greater transparency in utility-data center arrangements. [22]
- Big Tech’s energy scramble: Reuters has reported that major tech companies are increasingly pursuing an “all of the above” power strategy—including renewables, gas, and nuclear—because data center load is rising faster than the grid can easily accommodate. [23]
- Ratepayer risk questions elsewhere: In Georgia, regulators are weighing major new investments largely tied to data center demand, with critics warning about the risk of overbuilding and pushing costs onto other customers if projected demand doesn’t fully materialize. [24]
For Oregon ratepayers, the POWER Act’s promise is that the state’s regulatory framework will be clearer than “build first, socialize later”—but the dispute over PGE’s implementation shows how contentious the details can be. [25]
What households should watch next
As of Dec. 17, 2025, the outcome remains unsettled—but several near-term markers are emerging from the reporting and regulatory timeline:
- PGE’s revised filing (expected later this week per KATU’s report). [26]
- Whether regulators require longer “direct assignment” of data-center-driven investments than the initial three-year window described in the reporting. [27]
- How the OPUC defines “shared” infrastructure in fast-growing areas like Washington County—and what evidence is required to prove an asset is primarily serving data centers. [28]
- The April decision that could set an early statewide template for how Oregon applies the POWER Act to future data center growth. [29]
Bottom line
Oregon wrote the POWER Act to keep data-center-driven grid expansion from landing on household bills by default. Now, the state’s first major test of that law is playing out in the details of PGE’s proposed “Peak Growth Modifier”—and in a fundamental question regulators must answer: Should costs follow total demand growth, peak demand growth, or a stricter “who benefits” standard for long-lived investments? [30]
With an OPUC decision expected in April and revised filings still ahead, Oregon ratepayers—and the fast-growing data center sector—are watching closely to see whether the POWER Act becomes a meaningful shield for household affordability, or a new framework with loopholes big enough to shift costs back onto everyone else. [31]
References
1. www.opb.org, 2. www.opb.org, 3. www.opb.org, 4. katu.com, 5. www.opb.org, 6. katu.com, 7. www.opb.org, 8. katu.com, 9. www.opb.org, 10. katu.com, 11. www.opb.org, 12. www.opb.org, 13. katu.com, 14. www.opb.org, 15. katu.com, 16. www.opb.org, 17. katu.com, 18. www.opb.org, 19. www.opb.org, 20. katu.com, 21. www.oregon.gov, 22. www.theguardian.com, 23. www.reuters.com, 24. apnews.com, 25. www.opb.org, 26. katu.com, 27. www.opb.org, 28. www.opb.org, 29. www.opb.org, 30. www.opb.org, 31. www.opb.org
