Data Center Site Selection in Oregon

Oregon’s data center industry grew around three things: hydro-backed power from the Columbia River system, a mild climate that suits air-side economization, and a tax structure with no state sales tax and generous local property tax deals.⁸ The result is a state where data centers now make up a very large share of electricity demand. A September 2026 report by ECOnorthwest and the University of Virginia found that data centers accounted for about 23% of retail electricity sales statewide in 2025.¹

That concentration explains the policy response. Between 2025 and 2026 the legislature, the Public Utility Commission and the governor all acted on data center costs, land and incentives. For a site buyer, Oregon is no longer a state where power and tax treatment can be assumed from what earlier projects received. Each of those has to be checked against the current rules, which are summarized below. Our Pacific Northwest regional guide covers how Oregon compares with Washington and Idaho.

Oregon’s data center activity sits in a few clusters, and each has a different power and land profile.

Hillsboro is the metro market. It ended 2025 with 475.4 MW of inventory, a 0.2% vacancy rate and roughly 1 MW of available capacity, according to CBRE.⁶ PGE has worked to free up capacity there: a 2025 project with GridCARE identified more than 80 MW of incremental capacity for data center load in 2026, part of more than 400 MW the utility expects to energize by 2029.¹⁰

The Dalles, in the Columbia Gorge, is home to Google’s campus. Its power is delivered by Northern Wasco County PUD, a consumer-owned utility, which in one example carries more than 100 MW of wind energy from the Leaning Juniper IIB project in Gilliam County to Google under a power purchase agreement.⁹ Prineville in Central Oregon hosts large campuses for Meta and Apple, built under long-term property tax arrangements with fixed annual payments to the county.¹¹ Morrow and Umatilla counties in eastern Oregon form a further cluster of hyperscale campuses along the Columbia.

The Protecting Oregonians With Energy Responsibility (POWER) Act, House Bill 3546, became law in 2025. It directs the Public Utility Commission to create a separate classification and tariff for large energy use facilities of 20 MW or more, including data centers, and requires contracts of at least 10 years with a payment for a base level of energy use regardless of actual consumption.² The intent is that residential and small business customers do not pay for the infrastructure built to serve these loads.²

The PUC implemented the law for PGE in Order No. 26-154, entered May 7, 2026, in docket UM 2377.³ The resulting tariff, Schedule 96, took effect June 10, 2026, and its main terms are below.³

The new rates matter as much as the contract terms. When PGE’s updated rates took effect on July 8, 2026, data centers and other large energy users saw an average increase of about 29%, while other PGE customers saw decreases.¹² The commission also directed PacifiCorp to design its own data center rate structure, so terms in Pacific Power territory may differ from PGE’s and were still being developed.⁵

Much of Oregon’s high-voltage transmission is owned by the Bonneville Power Administration (BPA), which publishes a list of long-term transmission system constraints that it uses when evaluating transmission service requests. That list was last updated in January 2025.¹³ Industry executives have described data center construction in Washington and Oregon dropping sharply because transmission has not kept pace with large-scale demand.¹⁴

Utility-level work can help. PGE’s Hillsboro project used load forecasting and flexibility, including batteries and on-site generation, to validate capacity on existing infrastructure and bring loads online earlier than the original plan.¹⁰ Even so, the state-hosted report and regional planners describe new generation and transmission as necessary to meet projected large-load growth.¹

For a site, that means three separate questions: which retail utility serves the parcel, whether that utility has distribution and substation capacity in the needed timeframe, and whether the BPA or other transmission path behind it is constrained. A parcel can pass the first two and fail the third. Our guide to power timelines and interconnection queues explains how to read those risks, and flexible loads and demand response covers the flexibility tools PGE has used.

Oregon has no state sales tax, which has long been a draw for data centers because servers and equipment are bought without it.⁸ The other major tool was the enterprise zone program, which gives a complete property tax exemption for a set number of years in designated zones.⁸ Long-term rural enterprise zone deals in places like Prineville replaced most property tax with fixed annual payments.¹¹

House Bill 4084, effective June 5, 2026, made new data centers ineligible for enterprise zone property tax exemptions. The pause lasts until 90 days after the 2027 legislative session adjourns, which could run into fall 2027 or later.⁴ Data centers already receiving the exemption, and projects already approved for it, keep their benefits. The Strategic Investment Program, a separate property tax incentive, was not affected.⁴

Supporters said the pause gives Governor Kotek’s Oregon Data Center Advisory Committee time to study data center growth and its effects on the economy, environment and energy supply before the 2027 session.⁴ Incentive treatment for a new project should therefore be treated as open until that session acts. Our overview of data center tax incentives explains how property and sales tax exemptions usually interact.

Oregon’s land use system draws urban growth boundaries around cities, and industrial development outside them is difficult. That is the main land constraint in Hillsboro. In March 2026, Senate Bill 1586, which would have brought 373 acres into Hillsboro’s urban growth boundary and designated about 1,400 acres for future industrial use, was dropped after opposition from farmers, residents and land use advocates, much of it focused on language allowing data centers as an accessory use.⁷

State-owned land is also off the table for now. The governor directed agencies to pause land transactions for data center projects, including easements, rights-of-way, leases, land use permits and sales of state property, through July 1, 2027.¹⁵ A route that crosses state land for a transmission line, water line or access road can be held up by that pause even when the data center parcel itself is private.

1. 01Identify the retail utility. PGE, PacifiCorp and consumer-owned utilities such as PUDs operate under different rules; check the utility service territory before anything else.
2. 02In PGE territory, price the Schedule 96 terms: contract length for the planned size, the 90% minimum demand charge and the 1 cent surcharge at 100 MW or more.³⁵
3. 03In PacifiCorp territory, confirm the status of its data center rate design with the utility and the PUC.⁵
4. 04Ask about BPA transmission constraints behind the serving substation, not only local distribution capacity.¹³
5. 05Confirm whether the parcel is inside an urban growth boundary and zoned for industrial use.⁷
6. 06Check whether any access, utility route or easement crosses state land subject to the pause.¹⁵
7. 07Treat enterprise zone eligibility as unavailable for a new project until the 2027 session acts, and test whether the Strategic Investment Program fits.⁴

None of these steps replaces a written answer from the utility and county. They do show early whether a parcel is worth that effort. Our due diligence checklist covers the rest of the review, and you can get a site reviewed if you want an outside screen of a specific Oregon parcel.