Oregon Regulators Approve PGE’s Large-Load Tariff Framework, Shifting Data Center Costs to Hyperscale Customers
May 28, 2026
Oregon Regulators Approve PGE’s Large-Load Tariff Framework, Shifting Data Center Costs to Hyperscale Customers
Oregon has become one of the first states to implement a comprehensive large-load tariff specifically targeting data centers, as regulators approved a framework that shifts significant infrastructure costs and interconnection obligations onto hyperscale customers. The decision marks a key test of how state-level policies can manage the surging electricity demand driven by artificial intelligence and cloud computing.
On May 7, the Oregon Public Utility Commission (PUC) approved Schedule 96, a new large-load tariff framework for data centers exceeding 20 megawatts. The order, which applies to Portland General Electric (PGE) territory, is the first major implementation of Oregon’s 2025 POWER Act. It requires long-term contracts, customer-paid distribution upgrades, and a surcharge for the largest projects, linking interconnection approvals to emissions and clean energy requirements.
Under the framework, which takes effect on June 10, customers must cover 100% of distribution network upgrades needed to serve their projects. Minimum generation and transmission demand charges are set at 90% of contracted system capacity, even if actual usage is lower. Contract terms escalate with project size, starting at 10 years and extending to 30 years for loads of 220 MW or more. Early contract termination could result in penalties tied to remaining demand obligations and the unspent value of new distribution investments.
Projects larger than 100 MW will also pay a surcharge of 1 cent per kilowatt-hour. Revenue from this surcharge is intended to fund programs that offset residential customer costs and address low-income energy burden, according to the commission’s final ruling. The PUC also approved PGE’s proposed peak growth modifier with modifications, making growth-related infrastructure cost allocations indefinite rather than capping them at 10 years. Regulators rejected the utility’s proposal to establish rate credits for customer classes with declining load, instead assigning more shared infrastructure costs to the customer classes driving the fastest electricity demand growth.
The order further ties large-load interconnection approvals to clean energy availability and state emissions targets. Schedule 96 customers must demonstrate that their load growth plans can scale without undermining utility emissions obligations, making the decision both a rate design and climate policy measure. “As energy demand grows, it is critical that the costs of new infrastructure are allocated fairly and transparently,” said John McFarland, chief customer officer at PGE, in a company press release.
Analysts said the framework provides regulatory certainty for utility investment while limiting cost shifts to other customers, potentially creating a model for other utilities facing rapid data center growth. Capstone LLC, a policy analysis and investment research firm, noted that the order reinforces an existing bull case for PGE rather than creating a new one, as the utility had already highlighted load growth and rate-base expansion in its first-quarter earnings release. The firm expects the framework to increase service costs and interconnection risks for hyperscale customers.
The order applies only to PGE. A separate proceeding involving PacifiCorp and its Pacific Power operations remains unresolved and has faced challenges from consumer advocates. PGE must submit revised tariffs by June 3, and requests for rehearing are due July 6, leaving open the possibility of additional regulatory action.
Source: utilitydive
