PGE data center tariff could earn $300
An RMI analysis shows annual revenue from large load tariffs for a 300-MW data center varies from $144.8 million at Xcel Energy to over $300 million at Portland General Electric.
Portland General Electric could earn more than $300 million annually from a single 300-megawatt data center under its state-approved large load tariff. This revenue estimate, from an analysis by the firm RMI, is the highest among several major U.S. utilities creating special rates for massive power users like data centers. As electricity prices and data center opposition become major voter priorities, whether data centers can actually offset utility bills and benefit local grids has become a key political talking point.
RMI modeled the total annual revenue a generic 300-MW customer operating at full capacity would generate under each utility's tariff framework. The wide variance in potential earnings highlights how different state approaches and utility structures affect who bears the cost of new grid demand.
Tariff structures drive revenue gaps
PGE's tariff, mandated by Oregon's legislature, sets a minimum billing demand at 90% of contracted capacity and can include terms up to 30 years. It applies a one-cent per kilowatt-hour community benefit surcharge for loads over 100 MW and includes a "peak growth modifier" assigning more new grid costs to fast-growing customer classes. Roughly two-thirds of PGE's modeled $300 million revenue comes from riders and adjustments, with only one-third from basic demand and energy charges.
Dominion Energy's tariff, effective in January, is estimated to bring in just over $241 million for the same hypothetical data center. It requires large loads to pay 85% of expected transmission and distribution demand and 60% of generation costs, alongside a 14-year contract and a collateral requirement of $1.5 million per MW.
At the lower end, Evergy Kansas would earn $184 million. Its 2025-approved tariff includes a 12-year contract term and an 80% minimum demand floor. The primary driver of the gap with PGE is pass-through riders. PGE's state-mandated community benefit surcharge alone adds $26.28 million yearly, and its fuel cost adjustment rider adds $130 million, more than double Evergy's equivalent charge.
| Utility | Estimated Annual Revenue (300 MW) | Key Tariff Features |
|---|---|---|
| Portland General Electric (OR) | > $300 million | 90% min. demand, up to 30-yr term, 1¢/kWh community fee |
| Dominion Energy (VA) | ~ $241 million | 85% T&D demand, 60% generation, $1.5M/MW collateral |
| Evergy Kansas | $184 million | 80% min. demand, 12-yr term after optional ramp-up |
Colorado case highlights revenue trade-offs
RMI presented its analysis in a proceeding for Xcel Energy in Colorado, where regulators ordered utilities to create frameworks that protect existing ratepayers from the costs and risks of large loads. Xcel's pending proposal would create a new rate class for loads of 50 MW or more, featuring a 15-year minimum contract, an 80% minimum billing demand floor, and exit fees.
RMI's modeling, done for Colorado's Office of the Utility Consumer Advocate, found Xcel's proposed tariff would yield the lowest annual utility revenue among its peers at $144.8 million. The consumer advocate argued that two optional pathways in Xcel's plan are reducing potential revenue, and potential savings for other customers.
Xcel's clean transition tariff, which lets customers fund new clean energy, excludes mature sources like wind, solar, and batteries. The consumer advocate said this suppresses participation and means Xcel misses out on revenue from the most available clean technologies. Nevada Energy's similar tariff, pioneered with Google, allows a broad technology mix.
Meanwhile, Xcel's "speed-to-market pathway" offers faster grid connection through privately negotiated contracts instead of public tariff rules. The advocate warned this could let fast-tracked data centers negotiate weaker ratepayer protections or bypass baseline requirements. To narrow the revenue gap and bolster protections, Colorado's Utility Consumer Advocate made several recommendations. It argued Xcel should open its clean transition tariff to more clean energy sources and bring its fast-track program under the public tariff so data centers must provide grid benefits to jump the queue.
The advocate also urged modifications to automatic billing rules. Under the current proposal, if a data center is delayed or uses less power than projected, revenue shortfalls are spread across all customer classes. The advocate wants rules to prevent ratepayers from covering such bills. Finally, the filing suggested Xcel follow PGE's lead by adding a dedicated community benefit fee. Such a charge could fund low-income energy assistance, home weatherization, and grid repairs in poorer neighborhoods.
