Gov. Kotek seeks answers from state utility commission amid public outcry over rising utility rates

Yahoo

25-03-2025

Demand for electricity in the Northwest is expected to grow at its fastest pace in decades. Demand in Oregon is being driven by an influx of large data centers in the region. (Photo by Robert Zullo/States Newsroom)
Oregon Gov. Tina Kotek's office has heard from thousands of Oregonians concerned with utility rate increases that have gone up for most by about 50% in the last five years.
Kotek detailed this and her own concerns in a March 20 letter to the three governor-appointed chairs and executive director of the Oregon Public Utility Commission, which is charged with regulating the rates of investor-owned, monopoly electric and gas utilities operating in the state.
She also laid out her expectations for the commission in the letter, including honoring the state's climate commitments while considering requests for rate increases from utilities.
She asked that members provide information by Aug. 1 about their ability going forward to keep electricity and gas services affordable for Oregonians, handle the impacts of new heavy users such as data centers and ensure sound investments are being made in modernizing grid and distribution systems so Oregonians get reliable energy deliveries.
'It is imperative to balance these pressures with smart policy choices that ensure reliable energy while not breaking the bank for consumers,' Kotek wrote.
Zachariah Baker, a policy adviser for the Oregon Public Utility Commission, said in an email the group is preparing a response to Kotek's request for more information and is in general agreement with the expectations she's laid out.
'We appreciate the governor's focus on the critical issues facing utility customers. The PUC shares these priorities and will continue to make progress on these issues with the stakeholder community,' Baker wrote.
Kotek acknowledged both electric and natural gas utilities have and continue to face increasing insurance costs from the threat of catastrophic wildfires, inflationary pressures and volatile fuel prices. Everyday customers face those challenges, too.
'These challenges are clearly a burden for Oregonians struggling with a steep increase in the cost of living — from groceries, to housing, to health care. Day-to-day life is quite simply becoming more and more expensive,' she said in her letter.
Kotek had three main requests for information that fall under the categories of affordability, large user growth and grid modernization and reliability.
First, the governor asked for an update on the commission's ongoing implementation of House Bill 2475, passed in 2021, which gave the commission the authority to enforce a rate differential for low-income customers of the utilities and made grants available to organizations hoping to represent low-income customers in rate-case hearings, which can be technical, time consuming and expensive for everyday people to participate in.
Baker of the commission said in the last four years, commissioners have passed rules requiring private utilities to offer bill discounts for income-qualifying residential customers and prohibited disconnections for elderly Oregonians and Oregonians with disabilities who fall behind on payments. Since 2021, the commission has also required utilities to report the number of disconnections they execute each year.
In 2024, the state's investor-owned utilities disconnected a record number of Oregonians, according to those reports. Portland General Electric and Pacific Power — the two largest electric utilities in the state, serving nearly 75% of all Oregonians — collectively shut off power for nonpayment to nearly 10,000 Oregonians in 2024, nearly twice as many as the year prior.
NW Natural, the state's largest private gas utility, turned off gas to 376 Oregonians in 2024 – a 30% increase since 2023. In the last five years, residential rates for customers of all three utilities have risen by about 50%, and the Oregon's Public Utility Commission has approved rate hikes requested by the utilities nearly every year.
When it comes to new heavy energy users such as data centers, Kotek asked the commission, along with the Oregon Department of Energy, to investigate impacts and risks of these industrial users and their large energy demand on residential customers, and how the state's monopoly utilities expect to meet that projected load growth.
Oregon's data center market is the fifth largest in the nation, according to Chicago-based commercial real estate group Cushman & Wakefield. Amazon, Apple, Facebook, Google and X, formerly named Twitter, have massive data centers in eastern Oregon as well as in The Dalles, Hillsboro and Prineville that require enormous amounts of energy to operate.
'The PUC and our stakeholder community recognize that planning and cost allocation practices need to be examined in the face of unprecedented growth in the electric sector,' Baker said.
The commission is considering several new rules that would ensure new large load users pay their 'fair share of infrastructure costs' related to getting them their power, according to Baker.
Lastly, Kotek asked for more information on efforts, opportunities and barriers to utilities obtaining cost-effective clean energy and to maintaining system reliability while they seek to comply with the state's Climate Protection Program.
That program, first passed in 2021 and reinstated in late 2024, mandated a 50% reduction in the state's greenhouse gas pollution by 2035 and a 90% reduction by 2050 to confront the growing threat of climate change. To get there, electric utilities and fossil fuel companies operating in Oregon will have to gradually decarbonize their energy supply, largely by shifting away from petroleum and natural gas, and incorporating more renewable energy sources such as wind, solar and biofuels — made from captured gas and decomposing matter — into their energy offerings.
'My administration is committed to implementing Oregon's Comprehensive Climate Action Plan to accelerate the clean energy transition, modernize our energy grid, and help lower energy bills for low-income Oregonians,' Kotek said in her letter. 'I expect utilities to match our commitment to meeting customers' needs while reducing greenhouse gas emissions, in line with our state's targets.'
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