The Oregon Public Utility Commission has ruled in favor of a PacifiCorp proposal that would penalize large-load customers, such as data centers, whose energy use at new facilities is not in line with forecast needs.

The Portland-based utility argued that the new measures would protect its broader ratepayer base from paying for grid investments that don't pan out.

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Transmission lines – Transmission Tower, Getty

"The scale of utility procurement and stranded asset risk associated with these loads creates a risk difference not only of degree, but of nature," the commissioners said in a statement.

The utility also contended that the new rules would incentivize data center operators to make more accurate forecasts, which would help avoid unnecessary or premature spending.

PacfiCorp has reported that large load customers signed agreements for around 13GW of new load between 2020 and 2023, far exceeding the utility’s peak demand of 10GW in 2023. However, only about "20 percent of requested load materializes in the first one to three years of service," the utility said.

Meta, the Data Center Coalition, and the Association of Western Energy Consumers opposed the proposal, arguing that the practice would be discriminatory, forcing large companies to bring capacity online simultaneously.

"If the company has historical information suggesting that it should not plan for all load to materialize exactly as customers forecast or have it all available on the first day of the customer taking service, it is the responsibility of a prudent utility operator to plan accordingly," Meta said in a statement.

PacifiCorp has laid out proposals for a five percent buffer for missed forecasts. However, Meta contended that the buffer should only be applied when loads come in less than 60 percent of the reserved amount.

The utility’s regulatory staff supported the changes but had concerns about "stranded asset risk, the possibility of shifting costs onto other customer classes, and spending valuable company efforts to deploy or acquire scarce resources that may not be optimally deployed due to a large customer’s load failing to materialize."

The new rules will come into effect in February 2025.

The utility is now looking to extend the rules in Utah and Washington.

PacifiCorp and its subsidiaries service areas across California, Idaho, Oregon, Utah, Washington, and Wyoming.

The new rules come amidst warnings that data center capacity across the Pacific Northwest could reach 4,000MW in the next five years, pushing the region’s power grid to its limits.