Oregon Senate passes bill to protect state renewable energy mandates

A bill designed to shield Oregon's renewable energy mandates from a potentially game-changing ballot measure sailed through the Senate's Business and Transportation Committee Tuesday, even as opponents called it a back-room deal hatched to benefit industry insiders and ignore average citizens.

Oregon's renewable energy standard requires "large" utilities to meet 25 percent of demand with renewable power by 2025, and includes lower targets for smaller utilities. The law is one of the defining legacies of former Gov. Ted Kulongoski, and is a darling of environmentalists, renewable developers and even large utilities, who are investing heavily in new wind and solar facilities to meet the requirements.

Backers say the law has been effective at spurring development of clean energy and has created jobs and enhanced tax revenues in the process. Utilities also claim those resources were least-cost choices to meet demand, though they were based on natural gas price forecasts that proved far too high.  

Not everyone is a fan of the mandates. Wind power has proven unpopular for many residents of Eastern Oregon, who decry the visual blight, the environmental impacts and the massive subsidies taxpayers have provided to developers who sell their energy out of state. Spiking demand from new data centers, meanwhile, had threatened to push Hermiston-based Umatilla Electric Cooperative into the "large" utility category and saddle it with expensive investments to meet the mandates.

The utility first sought exemption from the law, then launched a signature gathering campaign for a ballot measure that would include existing hydroelectric projects as qualifying renewable resources. Since hydro already serves about 40 percent of electricity demand in the state, that would render the renewable standards moot.

House Bill 4126, a compromise crafted by a task force run by Rep Greg Smith, R-Heppner and the governors energy policy advisor, Margie Hoffman, would head off that effort. It allows smaller utilities to meet the initial mandates by purchasing unbundled renewable energy certificates they can buy cheaply on the open market. And it throws a bone to large utilities who balked at the double standard the bill creates, directing regulators to study the prospect of allowing them to sell customized portfolios of green energy to specific customers under a special green tariff.

If the law passes, Umatilla says it will withdraw the ballot measure. But citizen's in Eastern Oregon who signed on to support the initiative feel double crossed. And independent energy suppliers say the proposed green tariffs would threaten long established prohibitions against monopoly utilities offering specialized generation packages to a select group of customers at special rates.

Robin Severe, a resident of Helix who helped gather several hundred signatures for the ballot measure, said the mandates to invest in "expensive and unreliable" wind and solar projects are taking money out of the pockets of every Oregonian.

"How can Governor Kitzhaber, his minion Margie Hoffman, the Oregon Department of Energy and Rep. Greg Smith think that this can be a good thing for the citizens of Oregon?

Irene Gilbert, a La Grande resident who has helped organize opposition to wind farms in Union County, said the bill circumvents the opportunity for citizens negatively impacted by the renewable mandates to have a say in what is counted toward meeting them. In testimony to the committee, she called the bill "the result of a meeting of a group of energy power players and the governor brokering a mini-fix to save a pet program."

James Wood, the president of Noble Americas Energy Solutions, urged the committee to amend the bill's green tariff language. He said the tariffs would create an uneven playing field, allowing monopoly utilities to eliminate competition with energy service suppliers that commercial and industrial customers can turn to today to supply specialized generation products under direct access rules.

The bill passed out of committee unanimously, with no amendments, and goes to the Senate floor with a do pass recommendation.