Could a small electrical cooperative in eastern Oregon up-end the state’s renewable energy law?
That’s the question being asked as the Umatilla Electric Cooperative essentially tells legislators: Fix the renewable energy standards to satisfy our concerns or we’ll put an initiative on the ballot that largely guts the law.
Steve Eldrige, the co-op’s general manager, portrayed the initiative as the only way Umatilla could get the attention of state lawmakers and big energy players.
“They wouldn’t even talk to us until we started getting the signatures” for a ballot measure, he said.
The initiative would considerably ease renewable energy standards by allowing the region’s massive hydropower dams to count toward meeting the requirements.
Critics of the initiative question whether the utility is trying to strong-arm lawmakers into giving the co-op an unfair advantage as it pursues power-hungry data centers that bring jobs to rural areas.
“It’s unclear a fix is even needed,” said Scott Bolton, vice president of government affairs for PacifiCorp, who added:
“You don’t want to give them something special that makes them the data center capital of the world while other areas are begging for economic development.”
The high-stakes fight revolves around Oregon’s 2007 law that requires utilities to meet certain targets for using newly developed renewable energy.
Utilities that provide at least 3 percent of the state’s retail electricity sales have to gradually increase their use of new renewable energy sources so that renewables equal 25 percent of their load by the year 2025. Currently, just three utilities are large enough to have to meet that standard: PacifiCorp, Portland General Electric and the Eugene Water and Electric Board.
Umatilla now accounts for about 2 percent of the state’s sales and has to meet a much lower renewable target, 10 percent by 2025.
But Amazon is still expanding three large data centers in Umatilla’s service area, and Eldrige said another company is developing a fourth major center. As a result, Umatilla projects that it could hit the 3 percent threshold by 2016 and come under the stiffer requirements.
Eldrige said he’s worried that the utility will have to raise rates to buy enough renewable energy. Umatilla can’t get the same tax breaks as the big investor-owned utilities, he added, and is limited in its ability to turn renewable power into what he calls a “profit center.”
The utility unsuccessfully pushed for some relief from the requirements in the 2011 and 2013 legislative sessions, to no avail. Now Gov. John Kitzhaber and Rep. Greg Smith, R-Heppner, are co-chairing a work group looking into whether a legislative fix can be found.
At this point, progress seems spotty.
“We agree on the shape of the table,” said Jeff Bissonnette, organizing director of the Citizens Utility Board and one of the negotiators. “We just don’t agree on what the problem is to put on the table.”
Bissonnette and other defenders of the Renewable Portfolio Standard argue that the cooperative ought to be able to meet the terms of the law, which was hashed out by a wide variety of interest groups in 2007.
For example, utilities don’t have to meet the full requirements in any year in which it would increase their costs by more than 4 percent. The law also would allow Umatilla, as a newly large utility, well into the 2030s before it would have to meet the full 25 percent threshold.
The cooperative’s ballot measure doesn’t go into any of these technicalities. It takes the politically appealing approach – on the surface, at least – of simply saying that existing hydropower resources should count toward meeting the renewable energy standard.
Since hydropower accounts for nearly 39 percent of the electricity consumed in Oregon, passage of the initiative would largely remove the teeth from the 2007 renewable energy law.
Former House co-Speaker Bruce Hanna, R-Roseburg, wrote a column for The Oregonian last week portraying the initiative as simple common sense.
Utilities have been forced to invest “in high-priced, heavily subsidized wind and solar power when Oregon already has a local, sustainable and renewable energy source of its own: hydro.”
Rep. Jules Bailey, a Portland Democrat who chairs the House Energy and Environment Committee, said Oregonians are justifiably proud of the region’s hydropower system. But he said the intention of the 2007 law was to ensure that utilities develop additional sources of renewable energy – which could include new hydro projects – to help meet rising demand.
“Once people understand [the initiative] is a wolf in sheep’s clothing, that it’s an attempt to cut out investments in renewable energy, I don’t think people will support that,” said Bailey.
Hanna’s column has also been criticized because it implies that the renewable energy law led PacifiCorp and Portland General Electric to propose major rate hikes.
Utility officials say that in both cases, the rate hikes would have been roughly the same even if the utilities had not turned to renewable sources of power, most notably wind power.
Initiative supporters dispute that. They say the question of whether utilities – or their customers – are benefitting the most from the renewables law could be an issue next year if the measure reaches the ballot.
Paul Cosgrove, a lobbyist whose clients include the Umatilla co-op, is the chief sponsor of the initiative. He said his group, Oregonians for Renewable Power, recently stepped up its canvassing and has now collected more than 10,000 signatures. He’s confident it will qualify for the November ballot if no legislative resolution is reached. The group needs 87,213 valid signatures by July 3.
Some observers wonder if the initiative will get national help. The American Legislative Exchange Council, which promotes conservative legislation in states around the country, has been critical of renewable energy standards, as have some manufacturers and conventional energy companies.
Initiative backers have raised about $45,000, with $19,000 of it coming from the Umatilla co-op.
There’s no national money now, said Cosgrove. “Whether there could be in the future, we’ll see.”
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