Every time you ask ChatGPT a question, search through your cloud-stored photos, or stream a video, massive data centers somewhere are consuming electricity—lots of it.
In Oregon, a battle is brewing over who should pay for the infrastructure needed to power these digital workhorses, and the answer may surprise you: it could be ordinary families footing much of the bill.
A Law With Good Intentions
This past summer, Oregon lawmakers thought they had solved a growing problem. As tech companies rushed to build data centers across the state, drawn by cheap hydroelectric power and favorable tax incentives, the state passed the POWER Act.
The legislation created a separate rate class for data centers, ensuring these energy-hungry facilities would pay for the transmission lines, substations, and power supply upgrades their operations demanded.
The message seemed clear: residential customers wouldn’t subsidize Big Tech’s expansion.
But Portland General Electric, the state’s largest utility, has other ideas.
The 3-Year Trick
PGE’s proposal to Oregon regulators contains a puzzling asymmetry. Under their plan, data centers would directly pay for infrastructure costs for just three years.
The remaining 47 years of costs—for equipment that typically lasts half a century—would be spread across all customers, including residential ratepayers.
Consider what this means in practice. When PGE built two substations in Washington County at a cost of 174 million dollars to serve data centers exclusively, the utility’s methodology would assign 47 percent of those costs to Oregon families.
Not because their homes need the capacity. Not because they benefit from the infrastructure. Simply because PGE’s formula spreads long-term costs across its entire customer base.
Consumer advocates call it a mathematical sleight of hand that undermines the POWER Act before the ink has dried.
The AI Boom’s Appetite
To understand the stakes, consider what’s actually happening inside these facilities. Modern data centers don’t just store family photos and email.
They’re increasingly powering artificial intelligence systems that require staggering amounts of computational power.
Training a single large AI model can consume as much electricity as 100 American homes use in an entire year. Inference—simply running these models to answer questions—adds up fast when multiplied across millions of daily queries.
A typical household in Oregon uses about 900 kilowatt-hours of electricity per month. A single large data center can consume enough power for 80,000 homes.
And the demand is accelerating. Tech companies are racing to build facilities that can support the next generation of AI applications, from autonomous vehicles to personalized medicine, all of which require massive computing infrastructure running around the clock.
This creates a profound imbalance. While a data center might bring a few dozen high-paying jobs to a community, the electrical infrastructure required to support it could cost hundreds of millions of dollars—infrastructure that, under PGE’s proposal, would be partially funded by families trying to keep their lights on and their own bills manageable.
Following the Money
Under PGE’s proposed cost allocation, residential customers would pay 45 percent of new power supply costs and 34 percent of new transmission infrastructure, regardless of who drives that growth. This matters enormously when data centers are the primary source of new demand.
Oregon has become an attractive location for these facilities precisely because of its abundant hydroelectric power.
The Columbia River’s dams provide clean, relatively cheap electricity—a magnet for companies looking to green their carbon footprint while managing costs.
But that hydropower infrastructure was built decades ago, paid for by previous generations of ratepayers. Now, as that capacity reaches its limits and new infrastructure becomes necessary, the question becomes: who pays for expansion driven by new, industrial-scale users?
PGE argues its methodology reflects the integrated nature of the electrical grid and the long-term benefits all customers receive from system improvements. The utility suggests that robust infrastructure serves everyone, even if immediate demand comes from specific customers.
Consumer advocates see it differently. They point out that the POWER Act specifically created a separate rate class to prevent exactly this kind of cost-shifting.
In their view, if a data center’s operations require building a new substation, that data center—and the profitable companies operating it—should bear the cost.
The April Reckoning
The Oregon Public Utility Commission now faces a decision that could set precedent far beyond the state’s borders. With a ruling expected by April 2026, commissioners must interpret whether PGE’s proposal complies with the POWER Act’s intent or subverts it through creative accounting.
The Citizens’ Utility Board, representing residential customers, has challenged the plan forcefully.
They argue that allowing utilities to charge data centers directly for only three years while spreading decades of costs across all ratepayers makes the POWER Act essentially meaningless. If the commission approves this approach, other utilities in Oregon and beyond may adopt similar strategies.
For Oregon families already dealing with rising living costs, the stakes are tangible. While individual monthly impacts might seem small at first—perhaps a few dollars per household—these costs compound over time. Across 47 years, a share of 174 million dollars in infrastructure costs adds up, especially when multiplied across multiple projects as data center construction continues.
Beyond Oregon’s Borders
This isn’t just an Oregon story. States across the country are grappling with similar questions as the AI revolution drives unprecedented demand for computing power. Virginia, which hosts the largest concentration of data centers in the world, has seen intense debates over grid capacity and cost allocation.
Texas, Arizona, and Georgia are all experiencing data center booms and the infrastructure challenges that follow.
The question resonates beyond utility bills. As society becomes increasingly dependent on AI-powered services—from healthcare diagnostics to financial systems to entertainment—someone must pay for the physical infrastructure that makes these digital services possible.
The Oregon case represents a test of whether that burden will be shared equitably or shifted to those with the least power to resist it.
What Comes Next
As the commission deliberates, several outcomes seem possible. They could reject PGE’s proposal outright, forcing the utility to develop a cost allocation that more clearly assigns data center infrastructure costs to data centers themselves.
They could approve it, potentially opening the door for similar approaches by other utilities. Or they could seek a middle ground, perhaps extending the period of direct data center payment beyond three years while still allowing some cost-sharing for long-term maintenance.
Whatever the decision, it will answer a fundamental question about the digital age: when the cloud comes to town, who pays for the electricity that keeps it running? For Oregon families, the answer could determine whether they’re partners in progress or involuntary sponsors of someone else’s computing power.
The commission’s ruling won’t just affect electricity bills. It will help define the social contract of the AI era—who benefits from technological advancement, and who bears its costs.
In a world where every chat with an AI, every cloud backup, and every streaming video requires physical infrastructure humming away somewhere, that question matters more than ever.
For now, Oregon families wait to learn whether a law designed to protect them will actually do so, or whether the fine print of utility regulation will write a different story altogether.
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