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Oregon passed a law last year requiring data centers to pay their fair share of…

2026-05-13 · 11:57 UTC ·@fredstaffordcs ·2 min read

Brief

Oregon's Public Utilities Commission issued an order implementing last year’s law that forces data centers to pay their share of utility interconnection and growth costs. The order assigns growth-related generation/transmission costs to the customer classes that cause them, allows PUC-reviewed non‑emitting special contracts, requires queuing for available clean energy, and notes staff support—but limited capacity—for a flexible large-load tariff; the author says this shows what a traditionally regulated state can do and praises the 'utility of utilities.'

Why it matters

Oregon passed a law last year requiring data centers to pay their fair share of utility costs; the Oregon Public Utilities Commission (PUC) issued a new order detailing implementation.

Key details

  • The PUC will allocate generation and transmission assets needed for growth to the customer classes that cause the growth, making large loads (data centers) collectively responsible for new investments; large-load customers may procure their own resources in PUC-reviewed special contracts but those resources must be non-emitting and proven not to be better handled via rate base or PPAs.
  • Large loads must enter a queue and wait until sufficient clean energy exists to cover their demand; special contracts can help prioritize customer-developed projects. PUC staff favored a separate tariff for flexible large data-center loads but said the commission lacks staff capacity to design it.
Source evidence

Oregon passed a law last year to require data centers to pay their fare share of utility costs, protecting other customers from huge costs needed to interconnect them. Oregon is a traditionally regulated state so it has a lot of leeway here that restructured states don't have.

Now the Oregon public utilities commission (PUC) has weighed in on some implementation specifics for compliance with the law with a new order. That order, like in every state, uses input from the utilities but also from PUC staff and other stakeholder groups. Many posters who ideologically prefer market competition omit this crucial role of the state, though, by suggesting it's just up to the utilities. Read more in the linked article but here's what stuck out to me:

1) Generation and transmission assets needed for growth will be allocated to the customer classes that need them. So basically large loads like data centers, which are now under a new statutorily demanded customer class, will be collectively responsible for new investments that are needed to grow the system (as opposed to those needed for reliability or replacement?), rather than spreading those costs to, eg, residential customers and smaller commercial customers.

2) The order also allows large load customers to procure their own resources in special contracts that will be evaluated case by case by PUC. But they have to be non-emitting resources and must be demonstrated that it wouldn't be more beneficial to go into rate base or PPA that benefits all customers.

3) To comply with Oregon's clean energy mandate large loads will have to go into a queue and wait until there's enough clean energy that can cover their load. So these special contracts can be used to help prioritize them, by letting the customer find their own projects to develop alongside it.

4) The PUC staff thought having a separate tariff for large data center loads that were flexible was a good idea but lacked the staff resources -- the state capacity! -- to figure out the details. See attached excerpt. We need abundance for PUCs.

IMO the Oregon example shows what's possible in a traditionally regulated state. The utility of utilities strikes again.