Oregon lawmakers support House Bill 3546 for utility cost allocation amid data center growth

The Senate Committee on Energy and Environment convened on May 5, 2025, to discuss critical legislation impacting Oregon's energy landscape, particularly focusing on House Bill 3,546. This bill aims to provide the Public Utility Commission (PUC) with essential tools to enhance utility bill affordability as the demand for electricity surges, especially from data centers and AI-related companies.

The meeting highlighted the increasing requests for large amounts of electricity, which are becoming more common across the United States. Portland General Electric (PGE) emphasized the need to modernize and strengthen the electrical grid while ensuring that electricity costs remain manageable for consumers. The utility is also addressing cybersecurity threats and preparing for unpredictable weather and wildfires, all of which necessitate significant infrastructure upgrades.

PGE outlined three guiding principles for managing new large electricity loads: protecting residential and small business customers, fairly distributing costs and risks associated with serving large load customers, and fostering economic development opportunities in Oregon. The utility believes that House Bill 3,546 aligns with these principles by establishing clear cost allocation rules, thereby supporting customer affordability amid the sector's expansion.

Senator Brock Smith sought clarification on the UE 4 30 tariff, which relates to the cost allocation for large load customers. PGE representatives explained that this tariff was part of a filing with the PUC that anticipated data center growth and included provisions for upfront payments and long-term contracts. The PUC has since approved a revised version of this filing and opened further investigations, indicating that any contracts signed would be subject to revision as the process evolves.

The bill proposes the creation of a specific rate class for data centers, which would streamline the implementation of these new measures if passed. This legislative effort reflects Oregon's commitment to balancing the growing energy demands of emerging industries with the need to protect consumer interests and promote sustainable economic growth.

As the meeting concluded, the committee acknowledged the importance of these discussions in shaping the future of energy policy in Oregon, with further steps anticipated as the legislative process continues.