PORTLAND, Ore. (KATU) — The Citizens Utility Board (CUB) has accused Portland General Electric (PGE) of circumventing Oregon’s new POWER Act, which mandates that data centers cover their own energy costs.

CUB claims PGE’s proposed cost-sharing framework unfairly burdens residential customers with a significant portion of the expenses associated with data center growth.

The consumer advocacy group was established in 1984, as a utility watchdog over Oregon’s three investor-owned electric utilities, PGE, Pacific Power and Idaho Power.

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According to CUB, PGE’s plan would charge residential customers 34-45% of the costs for new power supply and transmission, despite data centers being the primary drivers of increased energy demand.

CUB argues that this approach contradicts the intent of the POWER Act, which aims to prevent Oregon families from subsidizing data centers.

PGE, however, defends its proposal. The company mentioned a new tool called the Peak Growth Modifier as a means to ensure that those driving peak demand growth bear the associated costs.

“The electric grid and generating resources are built to make sure customers are reliably served at moments when usage is at its highest point – this is peak demand,” PGE said. “The principle is simple: customer groups driving peak-demand growth should pay for the infrastructure needed to serve that growth.”

The Oregon Public Utility Commission is currently reviewing PGE’s plan, with a decision expected by April 2026.

The POWER Act, signed by Gov. Kotek, instructed the commission to create a new industrial customer class for those using over 20 megawatts of energy, primarily data centers.

The bill also included provisions for infrastructure cost-sharing mechanisms, customer protections, and long-term contracts for data centers.

What’s the buzz around data centers?

Data centers are facilities that house and run large computer systems. They have been expanding at a fast pace to power the fast-growing AI economy across the country.

They usually contain several computer servers, data storage devices, network equipment and other devices that allow for storing, managing, processing and transmitting data.

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Currently, residential customers account for 40% of total electricity consumption, while data centers represent only 6% in Oregon.

However, data centers are expected to grow to approximately 20% of total consumption by 2030.

Oregon currently has 138 data centers, according to Data Center Map’s database.

Data centers use a lot of electricity, especially those specifically built to support generative AI.

A new Pew Research Center analysis of federal and international data shows U.S. data centers used 183 terawatt-hours of electricity in 2024, about 4% of all electricity used nationwide, according to the International Energy Agency (IEA).

That’s roughly equal to the entire annual electricity use of Pakistan.

According to Pew and the IEA, a typical AI-optimized hyperscale center uses as much electricity as 100,000 homes a year. Newer mega-facilities could use 20 times more once they go online.

In major hubs, especially Northern Virginia, clusters of these centers now consume more than a quarter of the state’s total electricity supply, the Electric Power Research Institute reports.

Carnegie Mellon University estimates U.S. electricity bills could rise 8% by 2030 just from data centers and crypto mining alone, with even steeper hikes in the most data-center-dense regions.

Data centers in the U.S. also consumed 17 billion gallons of fresh, drinking water in 2023, mainly to cool energy-intensive AI chips.

By 2028, hyperscale centers alone could be consuming 16 to 33 billion gallons annually — roughly the yearly use of a mid-sized U.S. city.

The Associated Press and Emma Withrow of The National Desk contributed to this report.