Some of Oregon’s largest industrial companies are warning the Legislature that a much-touted renewable energy bill could harm their competitiveness and cost the state well-paying jobs.
The manufacturing sector, which accounts for 10 percent of the state’s work force, should not be put at risk in an effort to promote renewable energy and fuel, and development of an emerging clean-technology sector, these companies say.
They say the bill lacks adequate protections against unexpected rate increases, to which energy-intensive companies are particularly vulnerable.
“Existing manufacturing companies are too important to be playing these kinds of dangerous games,” said Jonathan Williams, an Intel lobbyist, who has been aggressively working the Capitol corridors.
Weyerhaeuser and other voracious users of electricity are part of an 11th-hour lobbying blitz to amend Senate Bill 838 before it reaches the House for a vote, perhaps late next week.
They’re facing an uphill fight. Gov. Ted Kulongoski, a Democrat, considers the bill the centerpiece of his energy agenda. He maintains that the legislation, which requires utilities to supply customers with 25 percent renewable energy by 2025, is good for the environment and the economy.
He’s not buying manufacturers’ argument.
Anna Richter Taylor, a spokeswoman for the governor, said, “It’s disappointing that some of the state’s largest corporations, with the reputation for being forward thinking and cutting edge, are the loudest opponents to a bill that would advance Oregon’s competitiveness globally in one of the fastest growing industries: renewable energy,”
Kulongoski and the bill are backed by a broad coalition of consumer, environmental, financial and renewable energy interests. A Senate and a House with Democrat majorities further bolster support.
Opponents include Associated Oregon Industries, the state’s largest business lobby; Industrial Customers of Northwest Utilities; Northwest Food Processors Association; and the American Forest and Paper Association.
The bill already has passed the Senate. The House Energy and the Environment Committee gave it the nod last month. But fears that support for the bill was eroding sent it back to the energy committee for an amendment or two. That re-referral by the full House came on Friday.
Rep. Jackie Dingfelder, D-Portland, who chairs the energy committee, said she’s willing to revise the bill to address the concerns of small consumer-owned utilities seeking less stringent mandates. A proposed amendment would ease the 25 percent renewable requirement to 10 percent by 2025.
The higher bar would apply primarily to investor-owned utilities Portland General Electric and Pacific Power, which together account for more than 70 percent of the electricity consumed in the state.
Dingfelder said lawmakers already have beefed up ratepayer protections, and she isn’t inclined to make further changes for industry. More than 20 other states have passed similar bills and none has experienced significant rate increases, she said.
“I’m perplexed why industry isn’t supporting this,” she said. “They talk about doing right by the economy, they talk about sustainability. . . . I’m at a loss.”
Kulongoski also appears resistant to industry’s appeal for last-minute changes.
“The window of opportunity has been open, but it’s shutting quickly,” Taylor said.
Nevertheless, manufacturers have pulled out the crowbar.
“We’re the economic engine of the state,” said Greg Miller, a lobbyist for Weyerhaeuser Co. “When people ask why we’re so firm in having ratepayer protections, it’s because we have every right to be, given what’s at stake.”
Opponents also have taken aim at the environmental community, which is among the bill’s strongest advocates.
“To have environmental advocates doing economic development policy might not be the best way to go,” said Intel’s Williams. An Intel spokesman said the company spent $50 million last year locally on electricity, and Weyerhaeuser said its Oregon bill for electricity last year was $40 million.
Jason Eisdorfer, an attorney for the Citizens’ Utility Board, called opponents’ arguments shortsighted. “The biggest threat to rates in the future comes from neglecting the environmental implications of energy,” he said.
Intel and Weyerhaeuser have been the bill’s most vocal opponents . Intel is Oregon’s largest private employer, with a work force of 16,100. Weyerhaeuser employs about 3,800 people in its Oregon forest products operations.
Pulp and paper companies, which employ “well over 10,000” workers in Oregon, also are pushing for changes, industry lobbyist Paul Cosgrove said.
“We’re all looking at increased costs in all sorts of ways,” Cosgrove said. “We’re trying to protect the ability of manufacturing to do business in this state.”
The debate comes down to provisions of the bill that deal with cost caps and reviews by the Oregon Public Utility Commission, the agency that regulates investor-owned utilities.
The coalition supporting the bill wants to cap any rate increases associated with renewable energy at 2 percent, and it wants extensive rate-case reviews by the PUC. It also wants temporary exemptions from the mandates should renewable energy prices suddenly soar.
The bill currently includes a 4 percent cost cap tied to utility revenues, and it requires the PUC to hold hearings when renewables become part of a rate-hike request. It allows utilities to put money into an account, rather than into renewable purchases, in any given year if prices jump excessively.
By Gail Kinsey Hill
12 May 2007
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