Oregon lawmakers pass bill to ensure data centers cover their own energy costs

Oregon lawmakers approved legislation Thursday designed to ensure data centers bear the full burden of their electricity demands, insulating consumers and other industries from potential impacts on rates.

House Bill 3546 puts server farms and cryptocurrency miners in a new class of electricity customer under state law and gives Oregon regulators explicit authority to ensure these big energy users cover the cost of new generating plants and transmission lines to meet their growing power demands.

The bill also requires new data centers to sign a 10-year contract to ensure they’ll stick around to pay off utilities’ investment in new resources.

Gov. Tina Kotek has indicated she intends to sign the legislation.

Data centers consume 11% of all Oregon’s electricity

, according to industry estimates, more than double the power used by all of Portland’s homes combined. With the artificial intelligence market booming, power forecasters expect Oregon data centers will use at least twice as much electricity by the end of the decade.

Oregon power rates are already soaring in response to the costs of wildfire prevention and growing energy demand. State regulators and consumer watchdogs had warned that existing state law didn’t give the Public Utility Commission enough authority to ensure data centers didn’t add to those costs.

HB 3546 “ensures that those who create the need for massive infrastructure investments are the ones that pay for them, not Oregon families already struggling with rising energy costs,” Sen. Janeen Sollman, D-Hillsboro, said before the Senate voted on the bill Tuesday.

The Senate voted 18-12 in favor, making minor amendments to a version of

the bill that passed the House in April

. The revised bill passed the House 37-17 on Thursday.

Many of the world’s largest tech companies operate large Oregon data centers, among them Amazon, Apple, Google and Meta, Facebook’s parent company. They benefit from some of the most generous data center tax breaks anywhere in the world, saving more than $330 million a year in local taxes.

Oregon’s data centers mostly operate east of the Cascades and are served primarily by consumer-owned electric cooperatives, which already have the authority to protect residential ratepayers from data centers’ costs.

HB 3546 gives the Oregon Public Utility Commission similar authority over data centers in Hillsboro and other parts of the state served by Portland General Electric and PacifiCorp.

Google and other data center operators indicated they supported the legislation, in principle, but were concerned the bill singled out data center operators and crypto miners. Industry advocates and some Republican lawmakers suggested the legislation should apply to other large industries, too.

“We’re picking one class of power user, not large energy users, but specifically it targets bitcoin mining and things like that, and specifically the data centers,” Sen. Noah Robinson, R-Cave Junction, said Tuesday.

Other states are considering similar legislation. A bill pending in California’s Legislature would create a special tariff for data centers to cover the cost of data centers. A bill moving through the Texas Legislature aims to prevent rolling blackouts by giving power grid operators a “kill switch” to cut off electricity to data centers at times the state’s fragile energy system is overloaded.