Bill to boost small-scale renewables in Oregon runs into opposition

Oregon’s two biggest utilities, major industrial users and the Citizens’ Utility Board are all opposing legislation that would carve out a portion of Oregon’s renewable portfolio standard for small-scale projects.

At a House committee hearing on Monday, advocates for H.B. 2136 said it would ensure diversity in Oregon’s energy sources — bringing projects beyond big wind and solar — and encourage economic development throughout the state. But opponents said the bill, by in effect proscribing the projects that utilities could use to meet their renewable requirements, would drive up costs.

Most wind farms in the Northwest, like PGE's Tucannon River Wind Farm, shown here, are far bigger than the 20-megawatt "small renewables" cap.
Enlarge
Most wind farms in the Northwest, like PGE's Tucannon River Wind Farm, shown here, are… more

“We are very concerned that if this bill passes, that will trigger the (renewable portfolio standard) cost cap and that will result ultimately in fewer renewables that we’re able to develop in an affordable way,” Portland General Electric lobbyist Varner Seaman told the House Committee On Energy and Environment.

That assessment mirrored the complaint of the Industrial Customers of Northwest Utilities, which in written testimony said the bill "creates a situation where PGE and PacifiCorp could be forced to take the energy from a limited pool of eligible facilities at whatever price these facilities decide to charge."

Under last year’s Clean Electricity and Coal Transition law, Portland General Electric and Pacific Power (the name for PacifiCorp's Oregon operations) are required to grow their share of renewable energy from 15 percent now to 25 percent by 2025 and to 50 percent by 2040. The measure includes a cap of 4 percent on the added cost of meeting the RPS.

That law also dictates that 8 percent of the utilities' generating capacity come in the form of “small” renewable energy projects — defined as those that produce 20 megawatts or less — by 2025.

H.B. 2136 would change the small-renewables mandate to actual energy sold instead of capacity, and grow it from 6 percent in 2020, to 8 percent in 2025 and on up to 17 percent by 2040. Basically, the small-renewables requirement would account for about of a third of the utilities’ total renewable requirement as it ratchets up.

The bill was sponsored by the Community Renewable Energy Association.

A panel in support of the bill highlighted low-impact hydropower projects undertaken by Hood River’s Farmers Irrigation District and the Three Sisters Irrigation District as the type of renewables the bill would encourage. They said the projects have produced clean power while allowing the districts to make their irrigation systems more environmentally friendly and economically competitive.

“These projects will help diversify Oregon’s energy portfolio,” Gilliam County Judge Steve Shaffer said. “They’ll improve Oregon’s air quality, thereby the health of the public. They’ll provide economic development opportunity. They’ll also provide resiliency in the wake of a disaster.”

The “diversity” argument was turned on its head by Bob Jenks of the Citizens’ Utility Board, a Portland-based ratepayer advocacy group, who said the bill’s requirement that the small renewables be located on a grid that serves Oregon directly would limit the state’s renewable options.

“The idea of limiting ourselves to local renewable resources is great for local economic development, but for customer rates, for making the grid work, we want to have a broader path,” Jenks said.

He suggested, for instance, that when PacifiCorp retires its coal plants, opening up transmission capacity to Wyoming, Oregon utilities may want to seize the opportunity unconstrained by a small-renewables requirement.

“If we can bring in some of that Wyoming wind through transmission assets that we’ve already paid for, we should do that," Jenks said, noting that Wyoming wind farms operate at higher capacity factors and can deliver power at times that complement Oregon's fleet.