Oregon bill to curb coal, set 50% RPS heads to governor after Senate passage

Dive Brief:

  • The Oregon Senate on Wednesday approved Senate Bill 1547, which would set a 50% renewable portfolio standard (RPS) by 2040 and require the elimination of coal-generated electricity in the state power mix. The legislation, product of a coalition of utilities, consumer advocates, and renewable energy advocates, now goes to Gov. Kate Brown, who is expected to sign it into law.
  • The bill, passed in the lower House this week after weeks of legislative wrangling, requires the state's investor owned utilities (IOUs) Pacific Power and Portland General Electric (PGE) to halt the generation and importation of coal electricity by 2035. Electric cooperatives and municipal utilities are exempt, but the two IOUs serve about 70% of Oregon electricity demand. 
  • Opponents argue that allowing the IOUs to fully depreciate their out-of-state coal investments before terminating deliveries from them means Oregon ratepayers will end up paying for high-cost renewable generation while the plants sell low-cost electricity into other states’ wholesale markets.

Dive Insight:

Oregon appears on its way to setting one of the nation's most ambitious renewable energy standards, but but the provisions to eliminate coal-fired electricity from the state's power mix have raised questions among critics in utility circles. 

Last month, as the Oregon House passed an earlier version of the bill, emails surfaced from a state utility regulator writing to NARUC President Travis Kavulla, calling the legislation "absolute crap" and claiming that the Public Utilities Commission (PUC) — which would be tasked with enforcing the provisions — was shut out of the collaborative process that crafted the bill. 

In an interview shortly after, Kavulla criticized the legislation, noting that it "amazingly" does not include a requirement for the utilities to shut down their existing coal capacity, most of which exists out of state in Wyoming and Montana.

"Presumably those utilities will simply reallocate their coal plants to customers in other states or engage some swapping behavior so the conscience of Oregonians can be clear," Kavulla said, "but it's pretty clear that this bill won't actually reduce carbon emissions despite that being the ostensible purpose of it."

That is a common line of opponents of SB 1547, who have argued throughout the legislative session that the bill would allow coal plants to continue operating while Oregon would be stuck with high-priced renewables. The bill's backers say EPA regulations and lack of demand will make the coal plants too expensive, resulting in shutdowns.

A key compromise in the bill was preserving a maximum 4% premium that IOUs can pay for mandate-compliant renewables, according to Pacific Power Spokesperson Ry Schwark. The cap is intended to protect consumers from unreasonable rate increases. The PUC can temporarily suspend the RPS if grid reliability is threatened.

Renewable Energy Certificates (RECs) for projects built before 2023 will have unlimited life for the utilities, providing an incentive to make renewable investments sooner.

The bill also creates a community solar program, allowing Oregonians without solar suitable roofs to own a portion of a larger central array and have credits applied to their electricity bills.

It also requires the two utilities to support electric transportation and allows them to submit plans to the PUC for deployment of charging stations

The 50% renewable portfolio standard would place Oregon among the most ambitious states in terms of clean energy goals. California has a 50% RPS by 2030 and New York Gov. Andrew Cuomo has called for the same goal in his state. Hawaii has a 100% renewable energy standard it must meet by 2045.

 

 

Top image credit: Flickr; jimmy thomas