Friday, March 16, 2007

News From My Backyard: Hearings Begin on Proposed Oregon Renewable Energy Standard

Senate Environment and Natural Resources Committee Hears Nearly Six Hours of Overwhelmingly Positive Testimony on Oregon Renewable Energy Act Establishing 25% by 2025 Renewable Energy Standard

[Please see full disclosure at end of this post]

Hearings have begun in the Oregon Senate Environment and Natural Resource Committee on the Oregon Renewable Energy Act. The Oregon Renewable Energy Act, Senate Bill 838, would establish a Renewable Energy Standard requiring Oregon's utilities to gradually increase the amount of renewable energy in their electricity mix until 25% of their electricity is supplied by new renewable energy sources by 2025.

Over four committee sessions during the past two weeks, the Environment and Natural Resources Committe, chaired by Senator Brad Avakian (D-Portland/NE Washington County), heard nearly six hours of overwhelmingly positive testimony in support of the Oregon Renewable Energy Act.

Governor Ted Kulongoski kicked off the committee hearings on March 6th, testifying in support of the Renewable Energy Standard, describing it as "the centerpiece" of the package of renewable energy legislation proposed by a Renewable Energy Working Group established by the governor in 2005.

The other bills proposed by the Renewable Energy Working Group expand business and residential tax credits for renewable energy and establish a package of incentives and mandates intended to jump-start a biofuels industry in Oregon. The three bills passed the Oregon House with near unanimous support on March 1st and are expected the receive no major opposition in the Senate [see previous post]

Governor Kulongoski, who has staked his personal legacy on establishing Oregon as a leader in renewable energy, described an Oregon whose economy, communities, environment and energy independence have all been bolstered by the enactment of a Renewable Energy Standard.

Governor Kulongoski told the committee that the proposed Renewable Energy Standard "will help Oregon do what we know we need to do, and what scientists are telling us the whole world needs to do: shift from carbon-based sources of energy to cleaner, renewable sources of energy ... [and] help build a stronger, more sustainable economy, healthier communities and energy security for Oregon."

The governor's testimony was the first of a wave of overwhelmingly positive testimony from a remarkably diverse range of constituents and organizations from all four corners of Oregon.

Renewable energy advocates and environmentalists have joined with rural Oregonian farmers, ranchers, irrigators and county officials, Native American tribes, business owners, venture capitalists, faith organizations and state government officials to support the proposed Renewable Energy Standard.

The state's two large investor-owned utilities, Portland General Electric and PacifiCorp, as well as the Oregon Municipal Utilities Association are all in support of SB 838 as well.

Supporters argued that the Renewable Energy Standard will spur the development of the state's abundant renewable energy resources and enhance Oregon's energy independence, diversify Oregon's electricity supply and protect electricity consumers from volatile and rising fossil fuel prices, help reduce global warming pollution and increase the state's use of clean energy, drive economic development, particularly in rural Oregon, and help make Oregon a center for the growing clean energy economy.

John Lamoreau, former County Commissioner from Union County in the northeastern corner of the state and self-described "not liberal," was one of several who drove more than 100 miles from Eastern Oregon counties to testify in support of the bill. Mr. Lamoreau testified early during the first hearing arguing that it only makes sense to develop Oregon's abundant homegrown renewable energy resources.

"When I go to a sea food restaurant in Portland, I don't want to eat Salmon imported from Chile," Mr. Lamoreau said. "When I build my home in La Grande, I don't want to use timber imported from Canada. And when I buy my electricity, I don't want it to come from coal in Wyoming or natural gas from overseas when the wind blows freely and abundantly across Union County."

The potential for renewable energy to bridge the urban/rural, east/west divide that is so often prevalent in Oregon was a reoccurring theme in supporters' testimony. The broad range of support for the bill from urban, farm, forest and coastal communities alike is testament to the potential the bill has to bridge and potential help heal these divides.

Representative Ben Cannon (D-NE and SE Portland), a member of the House Committee on Energy and Environment, gave a particularly eloquent testimony to that effect saying:

"Let's look back a little in Oregon's history. There was a time when the primary reason for the existence of Oregon's cities was to do the shipping, the financing, the trading, and the manufacturing for Oregon's natural resource economy. A majority of Oregonians living in cities had ... a stake in rural Oregon.

Unfortunately, this is no longer the case. Many of the ties that once bound this state have been severed. Oregon's urban economy is more connected to the swings in Silicon Valley and Wall Street than to Mill City and Reedsport. The "Oregon partnership" has been frayed. ...

A renewable energy standard is not going to solve this problem, at least not on its own. But join with me in imagining a future where more than a quarter of the energy that heats and lights the homes of my constituents [in Portland] comes from wind mills in the Columbia Basin, solar arrays in Wheeler County, geothermal energy from the Klamath region, biomass from our forests and wave energy off the coast. ... Imagine the connections that this scenario would re-create between people in very different parts of the state. ...

[W]e have, with this bill, the opportunity to restore some of the economic ties that once bound the state, and with them the cultural, social, and political ties that follow. Nothing could be more critical to meeting squarely the extraordinary challenges that face our increasingly complex and vast society - challenges that include not only global warming but making sure people are healthy, food reaches our tables, and new technologies are used appropriately and ethically."
The following is a partial list of organizations testifying in support of the Oregon Renewable Energy Act [a longer by still by no means comprehensive list of supporters can be found here]:

* American Federation of State, County and Municipal Employees, Oregon Chapter
* American Institute of Architects, Portland Chapter
* American Wind Energy Association (AWEA)
* Association of Oregon Counties
* Association of Northwest Steelheaders
* Citizen's Utility Board of Oregon
* Community Renewable Energy Association
* Confederated Tribes of Umatilla
* Ecumenical Ministries of Oregon
* Fair & Clean Energy Coalition
* Gerding-Edlen Development Company LLC
* League of Oregon Cities
* Linn, Benton and Lincoln County Workforce Investment Board
* Mid-Columbia Economic Development District
* Middle Fork Irrigation District
* Northwest Energy Coalition
* Oregon AFL-CIO
* Oregon Apollo Alliance
* Oregon Bus Project
* Oregon Business Alliance (OBA)
* Oregon Center for Christian Values
* Oregon Environmental Council
* Oregon Municipal Electric Utilities Assocation
* Oregon Physicians for Social Responsibility
* Oregon Public Utility Commission
* Oregon Solar Electric Industries Association
* Oregon State Public Interest Research Group (OSPIRG)
* National Wildlife Federation
* Nth Power LLC, Venture Capital Energy Technology Fund
* PacifiCorp - A Mid-American Energy Holdings Company
* Portland Jobs with Justice
* Portland General Electric
* Renewable Northwest Project
* Sierra Club, Oregon Chapter

With such a broad list of supporters, you might be asking "whose opposed to this bill?"

The answer is that two main groups remain in opposition to the Oregon Renewable Energy Act: the state's Public Utility Districts and rural electric cooperatives as well as some of the state's large industrial energy consumers.

The Committee heard the first opposition testimony this Thursday, March 15th, when representatives of the Oregon Public Utilities Association, Oregon Rural Electric Cooperatives Association, Association of Oregon Industries and Industrial Customers of Northwest Utilities all testified against SB 838.

The PUDs and coops argue that the bill will take local control away from the elected governing bodies of the PUDs and Coops. The PUD and coop associations argue that their member utilities already purchase the bulk of their electricity from clean, renewable sources, referring to purchases of hydropower from the Bonneville Power Administration. They also expressed concern about the effect of mandates on some of Oregon's very small rural PUDs and coops.

The two organizations representing Oregon's large industrial energy consumers, AOI and ICNU, both argued that the bill will raise rates, putting Oregon businesses at a competitive disadvantage and wrecking Oregon's economy.

The concerns of both of the rural PUDs and coops and the industrial customers were heard throughout the Renewable Energy Working Group stakeholder process that drafted the Oregon Renewable Energy Act and supporters of the act argue that they have been addressed by various components of the bill.

The bill exempts small utilities that make up less than 1% of Oregon's load from the main renewable energy standard. These small utilities are held to a much less stringent standard requiring just 5% of the utilities electricity mix to come from new renewable energy sources by 2025.

The bill also lets consumer-owned utilities (COUs) - PUDs, rural coops and municipal electric utilities - police their own compliance, respecting the tradition of local control for Oregon's COUs (the Public Utility Commission only has oversight over the state's investor-owned utilities and electric service suppliers).

Additionally, the bill includes provisions that specify that a utility will not be required to give up access to any low-cost hydropower from BPA or from any other non-fossil resources if complying with the standard would require them to procure new resources in excess of their load growth, addressing the concerns of slow-growing utilities.

The bill also includes a cost cap provision designed to address concerns about potentially increased costs.

Supporters of the bill, including the Oregon Business Association and ratepayer advocates, the Citizens Utility Board of Oregon, argue that any cost increases will be minor and likely only in the short term, as increased use of renewable energy sources providing stable, predictable rates will eventually save money in the long run and protect consumers from the rising costs of fossil fuel resources and the costs of future carbon regulations.

However, should the cost of complying with the bill prove higher than expected, a cost cap provision will exempt utilities from compliance in any given year if the cost of compliance would increase customers' rates by more than 4%. (For utility policy wonks out there, the cost cap is tied to the utility's annual retail revenue requirement as a proxy for rates, exempting utilities from compliance if the cost of compliance exceeds 4% of the utility's revenue requirement).

[Stay tuned for a post summarizing the bill's provisions coming soon, or check out the more detailed Section by Section Summary in the Resources below...]

The few opponents of the bill seemed to recognize that they face overwhelming support for the Renewable Energy Standard. The representative of the PUDs association started his testimony by saying he felt "like a wind turbine standing in the face of gale force winds."

Despite allowing each hearing to go for a full two hours and offering three full hearings (the March 8th hearing was more-or-less canceled due to a political meltdown over an unrelated issue, the Corporate Kicker and Rainy Day Fund, for those following Oregon politics), the sheer number of people interested in testifying before the committee meant that Thursday's hearing closed with people still waiting to testify.

The committee will hear testimony from a few more people on Tuesday, March 19th, including a representative of the Oregon Municipal Electric Utilities Association, who is expected to offer the organizations support for the bill. The committee will then move on to a working session where amendments may be offered by committee members. The committee will likely vote to pass the bill out of committee at the end of the working session.

[Those of you interested in watching the committee session next Tuesday can do so at www.OregonChannel.org. The session will be held at 3:00 pm in Capitol Hearing Room B and streaming video and audio feeds are available. Archived audio will be made available after the session.]

I predict a 4-1 vote with Senator Jason Atkinson (R-Medford) joining the committees three Democrats in support of the bill. Senator Roger Beyer (R-Molalla) has seemed disinclined to support the bill and will likely be the lone 'no' vote on the committee. Democrats hold a majority on the five person committee and can pass the bill along party lines, although Chairman Avakian is hoping to send the bill to the Senate floor with bipartisan support.

A Senate floor vote will likely follow soon after the bill is passed from committee although the timing of that vote is a bit of a moving target.

[Stay tuned at WattHead for continued coverage of the Oregon Renewable Energy Act as it moves through the Oregon Legislature...]

Resources:

  • Powering Oregon's Future - Information and Resources on SB 838, the Oregon Renewable Energy Act
  • Text of Senate Bill 838 (as introduced to Senate Environment and Natural Resources Committee, March 15th 2007)
  • Section-by-Section Summary of SB 838 [prepared by me]
  • Audio archive of March 6th Senate Environment and Natural Resources Hearing on SB 838
  • Audio archive of March 8th Senate Environment and Natural Resources Hearing on SB 838
  • Audio archive of March 13th Senate Environment and Natural Resources Hearing on SB 838
  • Audio archive of March 15th Senate Environment and Natural Resources Hearing on SB 838

  • A note on bill numbers: Those of you who may have been following the progress of the Oregon Renewable Energy Act may be a bit confused about the bill numbers right now. The bill was originally introduced as Senate Bill 373 and the first three committee hearings heard testimony in support of SB 373. For some unexplained reason, the bill number for the Oregon Renewable Energy Act was changed to SB 838 at the beginning of Thursday's hearing. The committee has ensured everyone that any testimony or letters submitted on SB 373 will be considered for SB 838.

    Just remember: SB 838 = SB 373 = the Oregon Renewable Energy Act = a 25% by 2025 Renewable Energy Standard for Oregon.

    [Full disclosure: I work for Renewable Northwest Project, key advocates of the proposed Renewable Energy Standard. I am responsible for maintaining the Powering Oregon's Future website and am responsible for most of it's content. I should be no means be considered an 'unbiased party' but have done my best to report in a factual and balanced manner the events that have transpired during the hearings on SB 838.]

    No comments: