You don’t have to look any further than this link to review the number of articles that the Hillsboro Herald has written on the explosion of Data Centers in both Hillsboro and the State Of Oregon. Over the past four years, we have covered at least 50 storylines on these concrete behemoths and their impacts on communities. However, they are here to stay, and as a result, citizens must understand their impacts, both significant and minor.
At the local level here in Hillsboro, Oregon, there has been no opposition from City Leaders to the onslaught of Data Centers. Hillsboro now ranks as having the 4th most significant concentration of Data Centers in the United States. With at least 15 facilities operating, the Herald has identified at least 10 more that are in development or being constructed as we speak. Many of our readers want to know why. There is a straightforward answer that I want to make abundantly clear to everyone. The reasons are:
- Affordable, accessible, level, and serviceable land.
- A willing City and County Governmental environment.
- Plentiful, pristine water.
- CHEAP POWER – Relative to other places like Virginia, where power is exceedingly expensive and dominated by coal-fired plants.
- Incredible Property Tax Exemptions- 5 Years- No Property Taxes
Now, if that was not enough reason, let me show you why Hillsboro, Oregon, will lead not only the West Coast, but potentially the Nation in terms of total facilities and Megawatts used. This in one graphic will show you all you need to know.
What was once a single Trans-Pacific Fiber cable installed by WCI Cable, which I came across lying on the old railway tracks outside Timber, Oregon, has now become seven. Seven massive round bundles of fiber-optic line/cable are laid on the bottom of the Pacific Ocean that connect our little berg to the most powerful economies in the world. So connected that a pin that drops on a table in a conference room in Seoul, South Korea, can be heard hitting at the very same time in Hillsboro. Mighty Los Angeles has one cable. Hillsboro has seven.
To be on the spine, near or adjacent to those cables, is a home run for companies like QTS, STACK, ALIGNED, T-5, and Flexential. Many more are rushing in to capitalize on the opportunities. The closer these power suckers are to those Trans-Pac cables, the faster and more effective they are.
Today, news comes that the Oregon House of Representatives has passed House Bill 3546 with an overwhelming vote. The story written by Mike Rogaway of Oregon Live does a good job of explaining what the Oregon leaders did.
Here is a Summary from the State website dedicated to this bill.
SUMMARY
Digest: Tells the PUC to provide for a class of service for facilities that use large amounts of energy. (Flesch Readability Score: 66.3).
Directs the Public Utility Commission to provide for a classification of service for large energy use facilities. Directs the commission to require an electric company to assign the costs of serving large energy use facilities to the facilities and mitigate the risks to other classes of retail electricity consumers. Defines “large energy use facility.” Declares an emergency, effective on passage.Modifies and adds definitions. Requires the classification of service for retail electricity consumers that are large energy use facilities have their own tariff schedule. Establishes tariff schedule requirements adopted by the Oregon Public Utility Commission (PUC). Requires PUC to consider certain factors when deciding whether to approve a proposed tariff schedule. Modifies requirements PUC for requiring an electric company that is providing electricity service to a retail electricity consumer that is a large energy use facility to enter into a contract with the retail electricity consumer that covers the provision of the electricity service, including certain elements. Requires PUC, no later than September 1 of each even-numbered year, to submit to the interim committees of the Legislative Assembly related to energy, a report reviewing trends in load requirements and other implications from retail electricity consumers that are large energy use facilities and other retail electricity consumers that use large amounts of electricity. Repeals study and reporting requirements on January 2, 2035.
A Massive amount of testimony was submitted in support of the bill. One of the groups represented was the Climate Reality Project. They made hard-hitting points on how much of the total power grid in Oregon is being monopolized by Data Centers. 11% of all power and growing? Wow.
Read all the testimony here- https://olis.oregonlegislature.gov/liz/2025R1/Downloads/PublicTestimonyDocument/143211
This bill appears to require power providers to track the costs of supplying power to data centers and limit or prevent these costs from being added to the overall consumer base. This is a long-overdue requirement. Our power rates in Greater Portland have skyrocketed, with much of the increase attributed to upgrades of lines, substations, and equipment. Essentially, from now on, large Data Centers will be responsible for a greater share of the costs associated with upgrades.
THIS BILL IS A START, BUT NOT ENOUGH- YOU ARE PAYING 4X MORE than Data Centers
Based on our review of the rate charts, Portland General Electric (PGE) offers lower electricity rates to large industrial customers, such as data centers and companies like Intel, compared to residential customers.
Rate Comparison
Large Industrial Customers: These customers, including data centers, pay approximately 2 cents per kilowatt-hour (kWh) .opb
Residential Customers: Residential customers pay close to 8 cents per kWh .portlandgeneral.com+2opb+2portlandgeneral.com+2
This indicates that large industrial customers pay approximately one-quarter of the rate that residential customers do.
Rate Structures
PGE’s pricing plans for medium and large businesses (Schedules 83, 85, or 89) include lower rates for electricity used during off-peak times, such as nights and weekends. These plans also account for basic charges, transmission and distribution costs, and other required adjustments.portlandgeneral.com+2portlandgeneral.com+2portlandgeneral.com+2
SUMMARY:
In summary, while large industrial customers benefit from lower per-kWh rates due to their substantial and consistent energy usage, this has raised questions about rate fairness and the financial burden placed on residential customers.
Let that sink in. We are all paying about 400% more for our power than Data Centers are. Why would the legislature and Governor Kotek allow this to happen? Where is the Equity in this? Many people are being cut off from power every day. And yet we allow mostly Wall Street out of State companies to come into Oregon, abuse our natural resources, and we pay 400% more?
Why? This Bill does little in the face of those facts.
Conclusion
I appreciate what the Legislature did. This was a half-step at best. They are not hearing or seeing the real game. The power rates. And frankly, these big players will pay up if forced. Each building can serve up Millions of queries daily and millions of customers. A small raise in the monthly fee for Internet and Co-Location rack space, and they are not out one penny. So Salem needs to wise up. They need to do it quickly.
Hillsboro and Washington County See the ATM Aspects of Data Centers
One last point today, but maybe the most essential part of the overall story. Governments and Politicians love money and income. That is how they can run social programs and provide essential services, and for Hillsboro, come goodies like nice libraries, parks, and baseball stadiums. But where does that money come from? Those Intel jobs don’t benefit Hillsboro. A city leader was honest with me recently. Intel pays very little, if any, property taxes. Hillsboro does not receive any of the income taxes generated by the State now that the Gain-Share programs are essentially over. And the people who come to work for Intel and live in greater Hillsboro are a drain – they need police, fire, roads, parks, schools – you name it. It is a net loss.
BUT, Data Centers! YES! No jobs when done = No People. The first 5 years, data centers pay NO PROPERTY TAXES under the Enterprise Zone program run by the State and County. I think that is a giveaway we can not afford to offer. However, the facts are that the more data centers that can be built in Hillsboro and Washington County, the richer those coffers will be. Not only that, but the income will continue indefinitely, well into the future.
Data Centers are massive ATMs – and the more of them, the better when viewed from those offices and with that lens:
Let me show you one example. Here are the 5 QTS Data Centers located in Hillsboro, Oregon at NW Huffman and NW Brookwood Blvd.
The Washington County Department of Assessment and Taxation shows last year’s Tax bill as follows.
Let’s break down what we noted on the screen shot:
- Net Assesed Value is $34,363,750.
- QTS paid a property tax last year of $580,631.49 – This was massively reduced due to the Enterprise Zone which has 4 more years left.
- The RMV or Real Market Value is shown at $427,331,610 dollars. That is almost 1/2 a Billion Dollars. And that Facility is worth at least that much.
Based on a $16.90 Millage (per $1000 in value) property tax rate for that area of Washington County, the real property taxes should have been $7,221,100.
So let’s say Hillsboro and Washington County end up with 25 Data Centers in a few years. Considering Forest Grove and other locations are in the mix for the cement monsters, that seems about right. That would mean that property tax revenues could reach $50 to $100 million a year. And that folks will buy a lot of goodwill and a lot of programs. And it’s a reliable source of revenue.
No, I do not like the Heat Islands these structures create. I do not like the threat to our climate. And I sure hate the loss of farmland and my sense of place. If I wanted to live in a concrete Jungle, I would move to Los Angeles. But I want you all to understand what is happening. Do you read this sort of journalism elsewhere? Do you enjoy this free press work? You can join us by writing for us, by commenting, and by chipping in to our Patreon support- we need coffee and internet storage, yes at a Data Center, to keep up the good work.
Next up:
- Hillsboro needs a City Tax on data Centers – 1.5% of gross earnings? How about a 2% City Tax on all the power they use? That would generate $100 million for parks, schools, and homelessness. It’s Initiative Petition time!
- City Leaders must honestly analyze the climate issues these facilities create. It is time for a community gathering with everyone at the table.
That is all for today – class it out of session.
Have a blessed Spring Afternoon!
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QTS paid $580K is property taxes. How much did the farmer that owned those 90 acres before QTS pay per year?
Is the City of Hillsboro and the people of Hillsboro getting more or less property tax with that land used for a seed farm or data farm?
Ah, “Jason,” making the same argument in each of these threads. OK, we can play that game: How many head of livestock did QTS feed? How many pounds of oat did it produce? How much carbon or rainwater does it absorb and convert?
I’d say your tech-to-ag comparisons are like apples to oranges, but judging by your previous posts I don’t think you recognize an apple that isn’t based in Cupertino or an orange that isn’t the shade of the Bitcoin logo.
Touche!
Rich coming from the moderate that doesn’t let half the comments in Dirk!
Jason-
No one blocks any comments in our forum. However, since you spend your time on Reddit and Next Door dogging me an anyone who you, from your Troll’s chair, disagree with, and have never yourself added anything positive or helpful to the conversation, I will make you the first person every not allowed to continue here at the Herald. Someday when you post something intelligent, we will reconsider. Until then, study up buttercup!
Thanks for playing!
Dirk
Odd that we have 3 Jasons here. BTW I’m Jason Hinton.
QTS feeds no cattle. Does the USA have a shortage of feed for our cattle? Are we in any danger of not being able to feed the cattle in our feedlots and dairies? Last I checked the answer was no. If there truly is a shortage of cattle feed then maybe we should stop shipping it to China and Saudi Arabia: https://capitalpress.com/2018/10/02/hay-exporters-worried-about-china/. We should stop exporting oats, wheat, corn, and soybeans. But alas we have no shortage of feedcrops in the USA. We do have a shortage of actual food crops but the land in question isn’t involved in growing food for people.
However, Dirk’s argument was economic – that the data centers aren’t paying enough property tax so it is a perfectly justified question to ask how much property tax was coming from the farmer that owned the land before the data center He won’t answer, just as he never answers the question of how many jobs per acres the ag use was providing. I’m guessing the data centers are paying many times more than the farmer before them.
Yes, my argument is the same. Hillsboro needs more jobs and houses in Hillsboro and land use that brings more jobs, houses, and more tax revenue is a good thing.
You and Dirk make the same argument as well. Hillsboro has too many houses, too many businesses, and too many jobs already. That life was better is some past time that is never coming back.
“Hillsboro has too many houses, too many businesses, and too many jobs already. That life was better is some past time that is never coming back.”
I don’t know where you’ve conjured this particular argument from, but it certainly isn’t mine.
“Hillsboro has too many houses” is not the argument of someone who’s long argued that the proper use of North Hillsboro land west of the airport is, in fact, residential. It ties to the residential communities to the south, it’s situated near residential amenities including the Jackson, Evergreen, and Glencoe schools (and the new DPW and HPD facilities), and ties into the new northbound road, sidewalk, and bike lane projects on 25th, Jackson School and Glencoe.
“Too many businesses and too many jobs already.” The issue isn’t with jobs and businesses, but with the region’s meager definition of them. “Businesses” equate to multi-acre data center facilities that employ fewer than a 25 people apiece and receive 5- to 10-year tax abatements. They not only provide nominally more jobs than the farms they replace, but consume far greater amounts of electricity and water while requiring greater amounts of infrastructure to be built at public cost–and repaid in higher utility bills.
Also, I love that you think that fescue and orchard and timothy grass only feed–or that the seed from those grasses aren’t harvested here as one of Oregon’s largest cash crops. The variety of livestock that feeds off of what Oregon lands grow is more diverse than you’d expect, and the export of those feed crops goes to countries that pay richly for what tends to grow well here. Also, have you not seen the fields to the north? Wheat and oat get their turn as part of the crop rotation. Just because it’s not in a particular field this year doesn’t mean it won’t grow there the next.
I think much of Hillsboro would just like to hear the honest reasoning behind data center development: It pays landowners an immense premium per acre, it provides a modest uptick in jobs over agriculture, but—and this is key—it doesn’t add population significant enough to tax the roadways, schools, public services or other infrastructure that would require the city to invest the tax dollars it’s abated.
Hillsboro can cite “development” and “progress” without adding many jobs or services, but without choking the roads with commuters. Sure, there are a few more lights and wires around, but it’s more low-impact than, say, parking a Micron campus here and saddling the area with an actual city.
Let’s just stop framing this as “Hillsboro needs more/less jobs” because jobs have nothing to do with North Hillsboro development. Other commenters here have alluded to it: The key jobs they provide last the extent of the construction period. They keep the construction sector busy in the absence of any actual urban planning (Hillsboro hasn’t recognized the sky above its head within much of its UGB) and, as mentioned before, provide good union jobs for the region’s glut of blue-collar workers instead of building labor-heavy facilities that require white-collar workers who typically leave this state after graduation.
What we see with data centers here is the realistic outcome of the state’s distribution of labor. And Jason Hinton, I could argue all day with you over the virtues of oat and wheat over data farms but, let’s face it, if oat and wheat provided the generational support that the families of this area sought—or the products that this city still valued—the tulip-farming VanderZandens wouldn’t have been so vastly outnumbered by their Jackson East neighbors who wanted to sell.
As I mentioned earlier, nobody along the Urban Growth Boundary expects anything to stay the same forever. But I’d love to hear everyone be even slightly more honest about why things have changed the way they have.
good article Dirk – gives us a better understanding of what is really going on in that concrete jungle. I’d like to know more about the tariffs schedule comment since tariffs are all over the news these days and this statement “Repeals study and reporting requirements on January 2, 2035.”
Is this when this bill would take effect?
Great report…l wonder whom is getting the short end of this stick)? (Why can’t those large companies pay their fare share?
Most likely the people of Hillsboro our getting to pick up the tab.
Drive around that the houses need upkeep, new roof, fences, painting, windows and many other things. With utilities, taxes, food, gasoline, most of us don’t have two pennies to run together.
If those companies pay their fair share maybe the seniors of Hillsboro could get a brake on property taxes!
I found this map today. https://lnkd.in/g8vp2zuz It purports to show all the data center infrastructure in the United States.