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Thursday, March 22, 2007

News From My Backyard: More Hearings on Oregon Renewable Energy Act

Senate Environment and Natural Resources Committee Hears Final Day of Testimony Tuesday

[Please see full disclosure at end of this post]

The Oregon Senate Environment and Natural Resources Committee heard another hour-and-a-half of testimony on the Oregon Renewable Energy Act on Tuesday. The Oregon Municipal Electric Utilities Association and the state's largest consumer-owned utility, the Eugene Water and Electric Board, both added their support to the bill in the final day of public testimony.

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 (see previous post for bill summary).

Environment and Natural Resources Committee Chairman, Senator Brad Avakian, had anticipated being able to open a work session to hear amendments on the bill on Tuesday, but the long list of people still waiting to testify on the proposed Renewable Energy Standard convinced Avakian to hold another full public hearing. Tuesday's hearing was the fifth public hearing on the bill (see previous post for summary of first four hearings).

A panel of city and county officials kicked off the hearing submitting statements of support on behalf of the City of Portland, the Association of Oregon Counties and city and county commissioners from Portland, Clackamas County and Columbia County.

Gary Langenwalter, a Methodist Pastor and chair of the Oregon Interfaith Global Warming Campaign followed with an eloquent testimony imploring the committee to look at the issue as more than one of simple economics.

"As important as economics are, they should not be and cannot be the final deciding factor on this bill or any other, because energy is a moral issue." Mr. Langenwalter, a longtime businessman turned pastor said. "The people who talk about the economics of this bill ... seem to assume that we can continue with business as usual, taking resources out of the ground, processing them and putting the waste into the environment and that this won't affect the earth or it's ability to protect our lives. Those assumptions are wrong."

Mr. Langenwalter went on to ask the committee to consider the well-being of future generations who cannot appear before the committee to voice their concerns.

"The process of considering this legislation is democracy in action, and I'm proud of that. But democracy's major weakness is that the only people who can testify ... today are those who are currently alive. Future generations have no ability to speak to you. Ask yourself, who is considering the well-being of our citizens 50-years out, 100-years out, 500 years out. Ask yourself, if we continue to degrade the earth, how will our grandchildren live. ... When you consider this or other bills, look carefully at the picture of your children and grandchildren and vote on their behalf. That's who your decisions will ultimately affect, and vote to respect and preserve our earth, because in the final analysis, that's the most important legacy we can leave our children."
The Oregon Interfaith Global Warming Campaign involved members of a diversity of religious groups including Christians, Muslims, Jews, Roman Catholics, Native American and other faith groups.

Next, the National Electrical Contractors Association, International Brotherhood of Electrical Workers, and the Oregon State Building and Construction Trades Council all endorsed SB 838, as did a representative of the Confederated Tribes of Warm Springs.

They were followed by a representative of the Taxpayers Association of Oregon who opposes SB 838 because it extends the [highly successful, I might add] three percent public purpose charge added to PacifiCorp and PGE cusomters' bills.

Jason Williams, the association's executive director, described the public purpose charge as a "tax on an essential service," energy, which raised funds for an "unessential goal," protecting the environment. [Really the public purpose charge goes mostly to low-income energy assistance and to energy efficiency and conservation measures, both of which save utility customers money. Only 19% of the public purpose charge goes to renewable energy projects.]

The public purpose charge, originally enacted as part of Oregon's utility restructuring law in 1999, is currently set to expire in 2012. SB 838 would extend the public purpose charge to 2025 to coincide with the final RES targets and would re-purpose the renewable energy portion of the funds to support community-scale projects less than 20 megawatts in size.

Michael Early of the Industrial Customers of Northwest Utilities also testified in opposition of the bill. ICNU is perhaps the most vitriolic of the bill's small group of opponents and has opposed the idea of a Renewable Energy Standard from the beginning, repeatedly asserting that renewables will raise industrial customers' rates and put Oregon industry at a competitive disadvantage.

Mr. Early repeated some of the arguments made by ICNU's lobbyist last week and offered a package of eight amendments that would supposedly satisfy ICNU's concerns. The amendments drastically alter the current draft of the bill and likely will have little political traction at this point. [ICNU largely removed itself from negotiations and has been in full opposition of anything truly resembling a Renewable Energy Standard from the get go. Given the large amount of stakeholder input that has gone into the current draft, I doubt that Senator Avakian and the committee will adopt ICNU's amendments.]

Interestingly, Columbia Forest Products, a large industrial energy consumer and Oregon-based forest-products company, testified in support of the Renewable Energy Standard later in the hearing. Columbia Forest Product's Director of Corporate Sustainability testified that the company was "wholeheartedly" in support of SB 838.

John Charles, president and CEO of the Cascade Policy Institute, an Oregon-based libertarian "free-market" think tank, also testified in opposition of the bill, arguing that the standard was unnecessary given the already low carbon-intensity of Oregon's electricity supply. He also maintained that a standard was redundant and unnecessary given that many Oregon electricity customers already have the option to purchase green power from their utility, and although Oregon's participation in such programs ranks in the highest in the country, less than 6% of Oregon customers purchase green power.

"Why impose a renewable energy mandate when 96% of people don't want to pay more for green power and vote with their pocket books every day," Mr. Charles said.

Perhaps the most important testimony of the day was from Tom O'Conner, Executive Director of the Oregon Municipal Electric Utilities Association, which represents most of Oregon's municipal utilities.

Mr. O'Conner testified that after the long stakeholder process and recent negotiations and compromises, the current draft of the bill (the -2 amendments) "on balance meet the test of our principles." Mr. O'Conner was referring to a list of six principles outlining a policy framework for an RES that addressed municipal utilities' concerns.

Mr. O'Conner testified that each of those concerns had been addressed to the satisfaction of his organization in the current version of SB 838.

While the munis would have preferred that the RES targets were focused on load growth instead of overall load, Mr. O'Conner told the committee, he was comfortable with the current bill because it exempted utilities from complying if doing so would require them to acquire resources in excess of their load growth and require them to back off of non-fossil resources.

Another major concern of municipal utilities and other consumer-owned utilities has been retention of local control. Local elected governing boards regulate Oregon's consumer-owned utilities and COUs have been concerned that an RES may potentially remove this local control and/or give oversight of COUs to the Public Utility Commission. Mr. O'Conner testified that the current draft of the RES satisfied these concerns by allowing local boards to choose the best mix of resources to meet the targets (i.e. the bill contains no 'carve-outs' for specific resources like solar power), it avoids COU regulation by the PUC or the Oregon Department of Energy and allows local boards significant control over the details of RES implementation and compliance. [Oregon's public utilities and rural cooperatives associations should take note of Mr. O'Conner's testimony as they have expressed similar concerns but remain inexplicably unsatisfied with the current RES, despite the many provisions in the bill ensuring local control of COUs is retained]

Mr. O'Conner also testified that he felt the RES targets were reasonable, flexible enough and meaningful. He told the committee that while the later years' targets were aggressive and that uncertainties remain about the feasibility of compliance with those targets, the bill addresses these uncertainties with flexibility mechanisms (i.e., the alternative compliance payment option, the cost cap, exemptions for slow-growing utilities and a lower target for Oregon's smallest utilities).

With these concerns addressed, Mr. O'Conner pledged the Oregon Municipal Electric Utilities Assocation's support for Senate Bill 838 and the -2 amendments.

Mr. O'Conner was followed by a lobbyist representing the Eugene Water and Electric Board, Oregon's largest consumer-owned utility, who also testified that their original concerns about the bill had been addressed in the -2 amendments and that EWEB supports Senate Bill 838.

EWEB and the Municipal Utilities Association join Oregon's two largest utilities, Portland General Electric and PacifiCorp/Pacific Power in support of SB 838. PGE and PacifiCorp testified in support last Thursday.

The hearing was concluded after testimony from Natalie McIntire, Senior Policy Associate at the Renewable Northwest Project. Mrs. McIntire is an expert on transmission planning and wind integration issues and tried to ease any concerns about transmissions and integration issues associated with the Renewable Energy Standard.

Mrs. McIntire told the committee that a recent report from regional stakeholders, the Northwest Wind Integration Action Plan, concluded that there were no technical barriers to the integration of 6,000 megawatts of wind onto the Northwest grid. The report also identified a number of steps regional utilities could take to lower costs of integration and to go beyond the 6,000 megawatts in the future. The Northwest currently has around 1,500 megawatts of wind in the ground and will likely be pushing 3,500 megawatts by the end of 2008 (see a list of existing and planned projects here).

Mrs. McIntire also reminded the committee that utilities are already handling variability on their system since electricity demand is variable. Load goes up and down as people flip on and off light switches and air conditioners and as factories ramp up production lines, etc.

"Utilities are very comfortable managing variability, they have done it all along, and they manage the variability of their load throughout day." Mrs. McIntire said. "They balance a number of different loads against a number of different resources," she told the committee, and the variability of wind is simply another variable on the system that utilities can and will handle.

She also testified that the myth repeated by some of the bill's opponents that wind needs to be backed up by fossil resources on a one-to-one basis is just that - a myth. Utilities already deal with variability and unexpected outages with a planning reserve of resources and while some resources are needed to back up and integrate wind power, utilities by no means need to back up wind on a one-to-one basis. "This is something utilities are very comfortable with, and they don't need to back up wind one-to-one with another dispatchable resource," Mrs. McIntire testified.

Finally, Mrs. McIntire reminded the committee that Oregon's electricity demand is growing and that the region will need new transmission capacity soon regardless of what type of resources meet that load, renewable or otherwise. "The region does need more transmission capacity," she said, "but that situation is not driven by wind. The region is in that situation because we have not built much transmission infrastructure in the last 10-15 years" and our region's demand is growing. "We will need to solve that problem regardless of the resources we choose," Mrs. McIntire said. "It is not something that will be driven by this bill, and it's something that we can solve."

Chairman Avakian concluded the hearing by announcing that it would be the last day of public testimony on the bill, and that the committee would reconvene next Tuesday, March 27th, for a work session to hear amendments on the bill. Mr. Avakian announced that he would like to hold a committee vote at the end of that session if possible (i.e. if they can get through the amendments fast enough). If not Tuesday, then the vote will happen Thursday the 29th.

Committee member and vice-chair Senator Jason Atkinson (R-Grants Pass) is out of the country this week and will be returning next week in time for the vote. [Senator Atkinson is the one republican on the committee likely to vote in the favor of the bill, giving it a 4-1 bipartisan vote coming out of committee, and Chairman Avakian opted to wait until next week to vote to give Senator Atkinson a chance to vote on SB 838.]

A Senator floor vote is expected for sometime the following week (the week of April 2nd). [The bill is likely to pass the Senate at this point, with the remaining question being with how much support and with how many Republican votes.]

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


  • 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]
  • Previous post summarizing SB 838
  • PDF version of the above bill summary
  • Previous post on Senate Committee Hearings for Oregon Renewable Energy Act
  • Audio archive of March 20th hearing

  • [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.]

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