SALEM – A bill that would double Oregon’s renewable energy mandate and eliminate coal from the state’s power mix is headed to the state House for a floor vote, after lawmakers voted it out of committee on Thursday.
“We are going in a really good direction with this,” state Rep. Jessica Vega Pederson, D-Portland, said of the bill. Vega Pederson is chair of the House Committee on Energy and Environment, which voted 6-3 to pass the bill out of committee.
Nonetheless, several lawmakers on the committee said they had concerns about it and two Democrats who voted for the bill – Rep. Deborah Boone, D-Cannon Beach, and Rep. Paul Holvey, D-Eugene – said they voted “yes” as a courtesy to move the bill out of committee. Those lawmakers might vote against the bill when it comes up for a full vote in the House.
“I was always worried about not hearing enough from the Public Utility Commission on this process,” said Holvey, who added he hopes a Senate committee will thoroughly scrutinize the bill and perhaps make changes.
Boone also said she hoped more of the parties impacted by the bill would have a chance to shape it, as the legislation moves through the Legislature.
House Bill 4036, which was written by the state’s two largest utilities and environmental groups along with the Citizens’ Utility Board of Oregon, would double Oregon’s existing mandate to increase renewable energy. It would require Portland General Electric and PacifiCorp to use renewable power sources such as wind and solar to serve at least 50 percent of their customers’ energy demand in Oregon by 2040, up from the current state mandate of 25 percent renewable energy by 2025.
The bill would also require the investor-owned utilities to stop using coal to serve Oregon customers, but there are questions about whether the bill would actually do much to impact the phase-out of coal power in Oregon. Portland General Electric has already committed to close Oregon’s only coal plant, in Boardman, by 2020, and earlier this month the utility and an environmental group said the bill would have a greater impact on the types of power utilities use to replace coal.
The utilities negotiated the legislation in an effort to avoid ballot measures planned by the politically active nonprofit Renew Oregon, which represents a coalition of environmental groups, renewable energy companies and other businesses. The environmental groups agreed to drop their efforts to get voters to pass several new renewable energy mandates in November, including an initiative that would eliminate coal power, if lawmakers and the governor approve House Bill 4036.
The “no” votes on Thursday were all cast by Republicans, although Rep. Mark Johnson, R-Hood River, voted to move the bill out of committee.
“This is as far as we can go, putting requirements on our electric grid,” Johnson said. “It will be as green as we can be at the end of the day. We simply can’t impose further cost drivers, be it cap and trade or a carbon tax.”
Earlier this week, a competing climate bill passed out of the Oregon Senate Environment and Natural Resources Committee and advanced to the budget writing Joint Committee on Ways and Means. Senate Bill 1574, drafted by state Sen. Chris Edwards, D-Eugene, and Sen. Lee Beyer, D-Springfield, would replace the existing renewable energy goals with a new cap on carbon emissions and a system to buy and sell carbon pollution credits.
The most forceful opponent of House Bill 4036 on Thursday was Rep. Cliff Bentz, R-Ontario, who said the legislation would fundamentally undercut the ability of the Public Utility Commission to thoroughly vet rate increase requests from PacifiCorp and Portland General Electric, which are state-regulated monopolies.
Bentz often speaks about the need to combat climate change and voted last week for a bill to subsidize solar projects. However, he said a major problem with the coal and renewables bill was that it would allow utilities to seek rate increases based solely on the cost of new renewable energy projects. Bentz’ concerns echoed those raised by the Public Utility Commission in a public meeting last month.
When investor owned utilities make the case for the Public Utility Commission to approve a rate increase, Bentz said “they are generally required to bring in a complete picture of their business, not just a single issue.”
“The only way the PUC can make heads or tails of what’s told to them is to see the complete picture,” Bentz said.
Bentz, who works for a law firm that has represented Idaho Power, said when he asked “utility specialists” for their opinion of the bill, the “single issue ratemaking element” was the biggest red flag.
“This is a commitment by our ratepayers to a lot of money over a lot of years,” Bentz said.
Bob Jenks, executive director of the residential ratepayer advocacy group Citizens Utility Board, said the bill does allow utilities to ask the Public Utility Commission for rate increases to cover the cost of new facilities to meet the higher renewable energy mandate. However, Jenks said the utilities already have the ability to make these requests under the state’s existing, lower renewable energy requirements.
Jenks, whose group is tasked with representing ratepayers under Oregon law, said the Public Utility Commission can still revisit the rate increases for renewables as part of the bigger picture when utilities return with requests for broader rate increases.
“It’s a bridge to get them to the next general rate case and that scrutiny,” Jenks said. “It’s not a substitute for that.”
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