Data Centers & Oregon’s Energy Future

What is a Data Center?

From the outside, data centers don’t look like much. They are big buildings, often appearing as unassuming warehouses or office parks. But inside, these centers house vast networks of computing and storage resources.

When you log into your email or share a post on social media, the computing that makes that possible is housed in data centers. This storage maintains hospitals’ patient information online, operates telecommunication networks, provides hosting for websites, and more.

Our New Neighbors: Oregon Checks All of the Boxes for Data Centers

Oregon is extremely attractive to data centers because we check every box for their priorities for build-out:

1. Reliable, available power
2. Proximity to network infrastructure
3. Sufficient land availability
4. Cool climate
5. Low risk of natural disasters
6. Security Considerations
7. Cost considerations, including: land, construction, ongoing operations, electricity, tax breaks, incentives

Data center build-outs also rely on access to crucial under-the-ocean fiber optic network hubs, which are needed to connect the work of these data centers across the world. These hubs touch land in Oregon.

Because of these many attractive qualities, Oregon is becoming a top destination for data center growth in the country. While this is great for the tech industry, the scale of the energy demand and the speed of growth of these operations are causes for concern. We need to make sure our new data center neighbors are not causing harm to other energy customers, like regular Oregonians.

Data Centers: A New Type of Energy User

The Newest, Largest Energy Users

Data centers use a massive amount of electricity — an entire city’s worth! A single 30 MW data center uses more electricity than the City of Ashland. Larger, 250 MW data centers, associated with AI, require a similar amount of energy to the City of Eugene.

And these city-sized energy users are coming to Oregon in droves. In just the last five years, data centers’ growth for just Portland General Electric has been the equivalent of adding 162,400 families to PGE’s system.

Since 2016, PGE has seen more than a 95% growth in energy demand from industrial customers, where data centers are currently classified. Meanwhile, PGE’s residential customers’ energy demand has only increased 3.5% since 2016.

We have never seen a single type of energy customer grow at a rate that outpaces all others. Not only are these new data centers requiring more energy than almost anyone else, but they are growing well beyond what our utilities could have expected a decade ago.

The Size of a City that Never Sleeps

Imagine a city that never turned anything off and everything that was plugged in was running at full blast. That’s what data centers are asking from our energy grid. Data centers have extremely unique and large energy profiles. Data centers are essentially always on, operating near constantly at full capacity (aka at “peak” all the time).

Data centers are coming online at a pace far outpacing all other customers. They are quick to build, about 18 months from breaking ground to coming online, and coming en masse. Data centers are asking our utilities to accommodate a mid-sized Oregon city with less than two years’ notice.

Data Centers vs. Oregon’s Energy Systems

Spikes in the energy demand mean big investments from utilities at the cost of customers. We have already seen data center costs show up on our energy bills. And soon, we may see utilities struggling to meet clean energy requirements because of this increased demand for energy.

Big Growth Means Expensive Utility Investments

When there are massive increases in energy usage, utilities have to build the infrastructure to safely and reliably provide electricity to everyone. From new substations, battery storage projects, and more, data centers require a lot of upgrades to our energy systems.

For example, in the last few years, it has cost $210 million just to build out local transmission in Washington County to serve new large loads in PGE territory. This infrastructure does not necessarily benefit other customers. It was only built to serve data centers’ high energy needs.

Because our utilities are monopolies, the only option in the area, they have an obligation to provide electricity to the residents and businesses of that area. This means that when a data center—or multiple data centers— comes to town, the utilities must provide them with electricity. Even if that means spending a lot of money to make it happen.

Data Centers Are Driving Up Energy Costs for Everyone

Data centers have benefited from the fact that utilities spread the cost of growing energy demand across all customers. This means that everyone who is a customer of a for-profit utility has been covering utility costs that only benefit data centers.

Traditionally, growth in energy demand was relatively balanced across all types of customers. This balance made dividing costs roughly equally an easy choice for decades. But with this single group of extremely large, unique customers growing so fast and so disproportionately, that system is no longer fair.

Utility investments to serve data centers have been pushing up billing rates to residential, small business, and even other industrial customers. We’ve seen the dire impact of data centers rapidly rising energy costs—in 2024 Oregon’s for-profit utilities disconnected a record number of households because they could not afford their electricity bills.

Hyper-Scaled Energy Use Can Delay Our Clean Energy Transition

When a data center hooks up to an electricity grid of a for-profit utility in Oregon, its energy demand must be met according to our state’s renewable energy mandates. As more data centers come to Oregon, this is going to become increasingly more difficult.

In a recent report from Sightline, researchers found that data centers are pushing Northwest utilities to use more fossil fuels:

Data centers have [...] increased a handful of Northwest utilities’ reliance on purchasing dirty electricity and likely slowed each state’s transition to carbon-free energy. And if data centers gobble up electricity at the levels many analysts anticipate, they could push some Northwest utilities to rely on power from gas and coal burned in neighboring states with weaker environmental regulations for decades longer than they would have otherwise.

According to Oregon’s 100% Clean Electricity law, passed in 2021, our largest for-profit utilities must provide emission-free electricity by 2030. As data centers continue to scale, we are at risk of missing that mark.

Consumer Protections in the Face of Data Centers

CUB is working hard in 2025 to add more consumer protections against rising energy costs and more as data centers continue to boom in Oregon. This year, we are working on new legislation and regulations that will ensure data centers’ impacts are not harmful to consumers.

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