Oregon Public Utility Commission Partially Modifies PGE's Schedule 96 Data Center Tariff Under Order No. 26-309

Oregon Public Utility Commission Partially Modifies PGE's Schedule 96 Data Center Tariff Under Order No. 26-309

The intense regulatory battle in Oregon over who pays for the massive power grid upgrades required by AI data centers has reached a major milestone. On August 31, 2026, the Oregon Public Utility Commission (OPUC) issued Order No. 26-309, resolving the applications for rehearing, reconsideration, and clarification of the landmark Schedule 96 large-load tariff framework. The applications were filed on July 6, 2026, by Amazon Data Services (ADS), the Data Center Coalition (DCC), the Alliance of Western Energy Consumers (AWEC), and flexible-load developer Verrus.

The OPUC's ruling represents a partial compromise, granting some clarifications and minor modifications while leaving the core "growth pays for growth" framework of Schedule 96 intact¹.

The Core Battle: Who Pays for Shared Infrastructure?

Under the original Order No. 26-154, entered on May 7, 2026, the OPUC established a new industrial customer class for customers using 20 megawatts (MW) or more of energy—primarily targeting AI data centers. The tariff aimed to prevent ordinary residential ratepayers from subsidizing the massive grid expansion. However, consumer advocates and the utility have clashed over how to allocate the costs of shared grid infrastructure.

The Oregon Citizens' Utility Board (CUB) has argued that Portland General Electric (PGE) has attempted to shift significant data center-specific upgrade costs back onto residential households. As noted by CUB's Executive Director, Bob Jenks:

"PGE built a couple of substations out in Washington County to serve data centers. They cost $174 million. Not a single residential customer, not one, is served by those two substations, but PGE’s methodology would assign 47% of the cost of those substations to residential customers."

PGE defended its proposal by pointing to its Peak Growth Modifier (PGM), a tool designed to assign costs based on a rolling three-year lookback of who is driving peak demand growth:

"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."

Under PGE's compliance filing, the utility projected that Schedule 96 customers would see a substantial rate hike of upwards of 25%, while other customer classes could see decreases.

Financial Pressure on Portland General Electric (POR)

The rapid infrastructure buildout is putting severe capital expenditure and cash flow pressure on PGE. According to public markets data, Portland General Electric (POR) reported TTM revenue of $3.53 billion, but is experiencing highly negative free cash flow. For the quarter ending June 30, 2026, PGE's capital expenditures soared to $376.0 million, far outstripping its operating cash flow of $220.0 million, resulting in a negative free cash flow of -$156.0 million. The utility carries $5.21 billion in total debt against a market capitalization of $5.73 billion, highlighting the urgency of securing regulatory frameworks that protect its balance sheet while funding AI-driven growth.