The Hillsboro Herald has covered more stories on Data Centers, particularly in Hillsboro, Oregon, than any other news media outlet. At least 20 in-depth articles have been researched and covered here at the Herald. Collecting the data, the policies, and the story of their impacts on our communities has been a labor of love. They are here to stay, and finally, some traction is happening regarding how much electricity they use.
We have maintained that they create severe stress on our fragile power grids. Furthermore, they are not paying their fair share of the costs for improving transmission lines and substations, which can not handle these massive users. Seeing others join in the coverage and fight for Equity, including Senator Ron Wyden, the Oregonian, and the Oregon Capitol Chronicle, is a great feeling.
You can read up on the work we have done right here:
Wyden launched some pressure from his end in a strongly worded letter to PGE last week to CEO Maria Pope. That put her and the company on the defensive, but it also put her in a position of explaining the drivers to PGE’s costs and why massive rate increases have all of us citizens paying up to 40% more than we had just a few years ago.
The Oregon Capitol Chronicle received a statement from PGE’s spokesperson, Drew Hanson. One of the quotes from that excellent article stated:
“Energy demand from PGE’s residential customers has gone up about 5% in the last five years while industrial demand is up more than 34%, requiring PGE to make major investments in industrial energy storage, new transmission lines and more energy generation projects. Those costs have been spread across all customers, and today residential customers pay more per kilowatt hour of electricity than industrial customers, according to an analysis by the Citizens’ Utility Board, a watchdog group established by Oregon voters in 1984 to represent the interests of utility consumers.”
Read their story here-
Wyden says PGE will ‘do everything possible’ to keep rates below inflation after 2025
Read that section in RED- residential customers are paying for the costs of infrastructure almost totally driven by Data Centers and the likes of Intel. This is a serious inequity. And in Hillsboro, now the 4th largest Data Center Hub in the US, that means all of us. The Herald and community advocates have presented this issue to our Mayor and City Council in the past. We will continue. Our water utilities recently went through a massive effort to determine the Cost of Services this past year and look at each user category. As it turned out, Big Industry was the driver of the most costs, and as a result,t they will face larger water cost increases in the future than Residential users will. This would not have been possible had it not been for the efforts of citizen activist Charolyn Concepcion, who bull-dogged this process and got the Utilities Commissioners to see what was happening. They voted for an equitable increase by user group. One person can change the world.
The Oregonian weighed in with their own story today, reiterating the gravity of the situation.
Mike Rogaway wrote a better story on this matter a few days back.
https://www.oregonlive.com/silicon-forest/2024/10/oregons-data-centers-want-a-lot-more-electricity-whos-going-to-pay-it-could-be-you.html
His story featured a deep dive into the potential for rolling Black Outs, where we could all lose power due to these energy-sucking behemoths. And no one seems to be sure about what could happen. Hillsboro has attracted more Data Centers than anyone, which is due to the welcome mat being rolled out by our Industrial Park zoning and Tax-Free Enterprise zones. These Wall Street-funded centers do not pay Property Taxes for 5 to 10 years, employ almost nobody, and use our available land and resources.
“The Hillsboro market is a particular focus because of Intel’s expansion plans and a growing cluster of data centers underwritten with tax breaks. Utilities are looking closely at ways to route new power lines into Washington County, focused on another major power line through Forest Park.” Mike Rogoway, OregonLive- https://www.oregonlive.com/silicon-forest/2024/10/oregons-data-centers-want-a-lot-more-electricity-whos-going-to-pay-it-could-be-you.html
They are Vampires on the land and in our Community.
So why do we allow them, and why hasn’t our leadership stopped them through simple zoning restrictions?
Property Taxes: The Herald has 1st hand information that the goal is to allow them into the City and survive the initial tax-free years. The result? Cash Cows will put out hundreds of Millions in property tax revenues in Hillsboro, generating a lot for parks, schools, roads, and other essential services. Thanks to a tech slump and AI displacement, jobs are going away, which could put a significant % of us out of work in the next decade. How can a City stay vibrant and keep the lights on? An industry like this makes AI all possible and is helping to usher in job losses. However, it is an industry that will grow and be resilient, and people won’t need jobs to make it work and pay property taxes.
Everyone is On Board now…
Now that we all have our attention on this matter, here are some additional thoughts and points that no one has talked about yet.
- What rate are these Data Centers buying our power at? I assure you it is much lower than what we all pay per Kilowatt and Megawatt. This needs to be published and shared. That rate should increase to offset the costs incurred by PGE and BPA.
- Should Hillsboro Residents file an initiative petition to stop these Data Centers from Expanding here?
- Is a City Tax or Fee per Kilowatt/Megawatt something we should all be looking at? If these centers are the cash cows and darlings of Wall Street and AI companies, and all their profits leave our community, we have to take something as the energy flows in and the data flows through and out.
- How about a 9% fee based on the gross income of the facilities? Consider the Data Center’s clients and Data being served up in the same way we view human visitors to our City. We charge a 9% TLT or Lodging Tax here in Washington based on the cost of the rooms. So how about 9% of the cost of serving and storing all that data? Then we commit all that revenue to 1) Schools, 2) Job retraining and creation for AI casualties, 3) Power assistance for those cut off when in need, and 4) Other essential services like Parks, Fire, and Police. And if you think I am kidding, think again.
The New Hillsboro Leadership-
Hillsboro has as many as 22 Data Centers (see red dots above on the photo), and more are coming. What will Mayor Beach Pace and the three new Councilors do, if anything? This is so layered they may sit and do nothing. But if they are serving all of us and leading us, they will dig in and get serious. They need to do it now. The current group has been too busy with Baseball and Intel’s woes, which brought us to this point. Let’s communicate with them to make this a win-win for everyone!
Here is to hoping for a better 2025 for all of us and action on this most urgent matter.
Rogoway’s story makes a great point: This is largely an unforced error on the part of both PGE and local government.
Both tripped over themselves to offer companies incentives to land their data centers here without ever really asking what those companies wanted. As Rogoway points out, the tech companies want a spot by landing cables (in Hillsboro, done) and a steady delivery of energy. For years, local governments and PGE said it was the cheap cost of energy (subsidized by residential and commercial rates, as it turns out) that kept data centers here, but tech companies are actually willing to pay the going rate or more as long as the local utility can carry all the energy they need.
If tech companies paid market rates for electricity from the start (and perhaps a premium for infrastructure upgrades), commercial and residential customers would pay a fair market rate well below the current cost. There’s no going back in time to fix the initial error, but both local governments and PGE can recoup by eliminating energy incentives in favor of a more robust grid.
Dirk –
Wow. You are such a gift to the community! Thanks for your great reporting! I’m fairly new to the west side and have taken an interest in North Plains, as I have 40+ years of experience as a rural community response team leader & specialist who has witnessed what happens when large corporations and greedy land developers exploit smaller communities.
I have to run right now but hope to meet you sometime soon.
Note that I joined the Friends for North Plains Smart Development and hope to be able to use my skills, expertise on policy, and leadership training to mend a few relationships as well as build bridges towards a sustainable future. I also have a number of ideas for small businesses.
Thanks my friend!
David Wilde
(Cedar Hills Area)
Sustainable2011@hotmail.com
Great comment Jason.
Love the photo marking all the data centers–excellent visualization!! Yes, it is pretty exciting that PGE is being called to account–but seems that Wyden is saying After the 2025 increases will keep rates down–How About NOW–we have already had too much, and this Industry too little!
Sadly, I have to correct your water statement–NO great progress was made by me with the Utility Commission to get Large Industrial/Intel up to paying their fair share:
There was the Cost of Service updated report this year (waiting for a year for this), but Intel did NOT receive the highest increases–the rest of Industry did, and Public Entities–ie schools–so we Also Pay for this! Credit to Hillsboro Water can be given in that several other categories: multi-family, irrigation and even public entity was given lower increases than the study showed–consideration was given as after the 2018 study for years these categories received Huge Increases for many years (that Industry did Not get).
Pie Charts of Usage and Revenue show that the rest of Industry was already paying their fair share. This was now able to be seen as ONE improvement in transparency was made–which I think I can take credit for bringing about. Finally, all of Industry is no longer lumped together in these charts–therefore for the first time is clear to see ONLY Large Industry/Intel underpays. Mind you, it was 6 years ago that Intel’s Category was created (Large Industrial).
Nothing was done to correct Intel Not paying fully for what they use–despite being the highest driver of use–like Data Centers are with Electricity.
True Residential got the lowest % increases–but that is because they are and have been overpaying (again seen on Usage and Revenue Pie Charts). And the “break” given to these customers to help keep their rates lower: keeping the base rate the same–wasn’t altruistic–simply reflects they have been paying too much of the base rate (also shown by charts). There is no debate that Intel should pay the highest here–and since 2018 efforts have been made to improve these ratios.
And the Worst Failed area to act upon– which I clearly pointed out over and over:
In their increases for 2025 Residential will get a HIGHER % increase than the study showed, and Large Industrial/Intel is getting a LOWER increase. They are fine with that as at the end of the second year it evens out (which is true)–but will NOT change the fact that for 2025 Residential overpays, Intel underpays.
The fundamental issue that is used = the pass given–to give Intel the lowest (except the very low residential tier) usage rate, and will continue to show them using more than they pay on the pie charts–is that Intel doesn’t have a big spike in water usage in the summer. Totally ignoring the FACT that they are THE spike every month of the year.
I branched out and looked at other cities where Intel manufactures, as well as cities around us–I am NOT seeing any other water department use different rates for water usage. I do have more research to do here.
Keep up the excellent reporting Dirk!
All centers are located on prime farmland, unmatched worldwide for fertility and workability. Gone forever. Yet Hillsboro and Washington County have their eyes on 1700 more acres so the development community and land owners can make more millions in profits.
I may not be an expert but if sweetheart deals are not given to these big tech corporations, or changing contracts after the fact, threats to raising taxes… they will simply close shop and move to other states dumb enough to allow them to take advantage. Maybe good but not really a long term solution. We need to hold big tech more accountable on many levels, in addition to financial.
Matt –
With Billions in infrastructure they won’t leave. They won’t even flinch. There are 4 or 5 of the biggest fiber optic cables in the world running right through Hillsboro right at the locations these guys are located – those cables come from Austrailia, Indonesia, and all of Asia. So no site far from these cables is attractive. They really can not leave!
So the Oregon Senator from New York must be nearing re-election. That is when he makes sure he grabs some headlines without ever actually accomplishing anything. Gas prices came down some so he has to find someone other than those mean and nasty oil companies to go after.
People need to quit chasing after their feel-good alternative energy and start building more nuclear plants.
I dare say he has done more for his home state than almost any other Senator to ever serve. He is powerful and effective. As to Nuclear, the new smaller plants have incredible potential and I believe China this past week perfected a format where melt downs are almost all but eliminated as a concern!