Idaho Power Divests Oregon Operations In $154 Million Deal To Control Rates

Idaho News · Economy/Market
August 22, 2026 at 5:30 PM PDT

Idaho Power plans to divest its service territory in Oregon, a strategic move designed to manage rising costs for customers across both states. The Boise-based utility agreed to sell its Western Oregon operations to the Oregon Trail Electric Cooperative for $154 million. This transaction aims to shield Idaho consumers from significant rate hikes driven by surging energy demand.

Why It Matters

The sale directly impacts how Idaho Power finances its infrastructure upgrades. The company faces pressure to meet unprecedented electricity consumption, largely fueled by data center expansion and industrial growth in Boise and beyond. Without this divestiture, Idaho Power indicated that customers could face a steep 17% rate increase. By shedding the Oregon operations, the utility projects a much more manageable 5.7% rate adjustment for its remaining customer base.

This decision aligns with broader efforts to stabilize energy costs in Idaho while maintaining grid reliability. It also shifts responsibility for Eastern Oregon’s power distribution to a local cooperative, potentially altering how rural communities in that region are served.

What Happened

Idaho Power submitted an application to the Idaho Public Utilities Commission to formalize the sale. The deal transfers distribution lines, substations, and related equipment located in Oregon to the Baker City-based cooperative.

Oregon Trail Electric Cooperative currently serves 60,000 customers across John Day, Burns, and La Grande. The acquisition will add approximately 20,000 former Idaho Power customers to its grid. The transfer covers 4,700 square miles spanning Malheur, Harney, Baker, and Wallowa counties.

Idaho Power has served Eastern Oregon for more than a century. However, the utility will retain ownership and operation of the high-voltage transmission line running from Boardman to Hemingway in Oregon. This ensures that major power flows remain under Idaho Power’s control, even as local distribution shifts hands.

By The Numbers

$154 million: Total sale price paid by the cooperative to Idaho Power.
660,000+: Total customers served by Idaho Power across Idaho and Oregon prior to the split.
4%: Portion of Idaho Power’s total customer base located in the Oregon territory being sold.
17% vs. 5.7%: Projected rate increase for Idaho customers without the sale versus with the sale.
Early 2027: Expected closing date for the transaction, pending regulatory approvals.

Zoom Out

The divestiture reflects a broader trend in the Pacific Northwest as utilities grapple with rapid electrification and data center booms. Idaho has seen massive investment in semiconductor manufacturing and AI infrastructure, including recent commitments from major tech firms. These facilities require substantial power capacity, driving up wholesale costs and necessitating grid modernization.

While Idaho Power focuses on its core Idaho operations, the Oregon Trail Electric Cooperative expands its footprint significantly. The cooperative’s service area will grow from 6,700 square miles to include nearly half of Eastern Oregon’s rural population. This shift may influence future local energy policy and infrastructure priorities in those counties.

What’s Next

The transaction must clear regulatory hurdles in both Idaho and Oregon before closing. State and federal agencies will review the terms to ensure consumer protection and market stability. If approved, the transfer is slated to complete in early 2027.

Idaho Power customers should anticipate modest rate adjustments as the utility reinvests in its own grid. Meanwhile, residents in Eastern Oregon will transition to a new provider, with the cooperative responsible for maintaining and upgrading local distribution infrastructure. The outcome of this deal could serve as a model for other utilities managing regional cost disparities amid national energy shifts.