A diverse group of stakeholders in Oregon are hailing the passage of SB 1547, a bold piece of legislation that doubles the state’s renewable energy target to 50 percent by 2040. It also requires utilities to quit purchasing coal power by 2035, making Oregon the first state to end coal use through legislative action.
The bill was crafted with the backing of utilities, consumer groups, environmental advocates and voted in by lawmakers from both political parties. SB 1547 was approved by the Oregon Senate on Wednesday, after passing in the House on Tuesday. The bill now goes to Governor Kate Brown, who has indicated she will sign it.
“The Legislature has passed a bill that equips Oregon with a bold and progressive path towards the energy resource mix of the future,” Brown said in a statement. “I am committed to policies that increase the availability of renewable energy, and appreciate the efforts of a broad range of interests to come together to address issues around Oregonians’ investment in electricity produced by coal."
Oregon joins a handful of other states with ambitious renewable energy targets: California and New York, which have set 50 percent targets by 2030, Vermont, which has set a 75 percent target by 2032, and Hawaii, which has a 100 percent target by 2045.
SB 1547 specifically applies to Oregon’s two largest utilities, Portland General Electric and Pacific Power, which serve approximately 70 percent of Oregon customers’ electricity needs. No changes were made to existing requirements for consumer-owned utilities.
In addition to the energy targets, the bill instructs Oregon's Public Utility Commission to order electric utilities to propose programs designed to "accelerate transportation electrification" by the end of the year. Programs can include investments in or customer rebates for electric-vehicle charging or related infrastructure.
The provision builds on similar legislation in California and the recent approval of two widely supported proposals to deploy electric-vehicle charging stations in San Diego Gas & Electric and Southern California Edison territory.
SB 1547 also establishes a community solar program in Oregon, which allows residential and small commercial customers to buy a portion of an off-site solar project and have credits applied to their utility bills.
Environmental and renewable energy industry stakeholders cheered the approval of SB 1547 this week, noting it puts Oregon on track to reach its goal of reducing carbon emissions 75 percent below 1990 levels by 2050.
“[The] vote is a win-win for our climate and clean energy here in Oregon. The Clean Electricity and Coal Transition plan shows that we can come together to advance real climate solutions as we move away from coal and toward more clean energy," said Andy Maggi, Oregon Sierra Club chapter director.
“The U.S. wind energy industry applauds these commonsense, ‘no-regrets’ state laws spurring added economic investment, job creation, and consumer savings,” said Mike Garland, CEO of Pattern Energy, and current chair of the American Wind Energy Association. “These states are well ahead of the curve as new market drivers and state-federal policies point in the direction of a cleaner electric grid.”
"This is a solid win for Oregon ratepayers. The risk of high-cost coal is gone, and low-risk, affordable clean energy will increase. Our wallets and our values have been protected," said Bob Jenks, executive director of the Citizens' Utility Board of Oregon.
Despite receiving widespread support, the bill also saw opposition.
Emails obtained by Oregon Live show that the Oregon PUC was largely left out of earlier discussions on the legislation. John Savage, the longest-serving PUC commissioner, said the bill is “absolute crap…a shell game that will result in no actual emissions reductions and higher rates for Oregon customers.”
Travis Kavulla, president of the National Association of Regulatory Commissioners, told Utility Dive he was surprised the bill did not include a requirement for Portland General Electric and Pacific Power to phase out their existing coal capacity, which is mostly located in Montana and Wyoming. The bill only requires utilities to stop purchasing coal power for Oregonians.
"Presumably those utilities will simply reallocate their coal plants to customers in other states or engage some swapping behavior so the conscience of Oregonians can be clear," Kavulla said, "but it's pretty clear that this bill won't actually reduce carbon emissions, despite that being the ostensible purpose of it."
Oregon’s Republican minority also questioned the bill's environmental benefits and argued that transitioning to higher levels of renewable energy would increase costs for consumers.
Noah Long, NRDC's director of Western energy, said that while the Oregon bill doesn't require utilities to shut down their coal plants, similar legislation passed in California in 2006 (SB 1368) ended up reducing coal use across the region. "In my view, this bill does everything Oregon has legal authority to do to cut the market out from underneath coal plants from other Western states," he said. "And it's very likely as a result to bring about retirement and reductions at those coal facilities."
To address cost concerns, the legislation extended an existing ratepayer protection related to the RPS that caps the incremental costs of compliance at 4 percent of the utilities' annual revenue requirement for a compliance year. Lawmakers also added a new provision that permits the Oregon PUC to temporarily suspend RPS compliance if the utility determines that grid reliability is seriously compromised.
Oregon PUC staff are now meeting to determine the necessary rulemakings related to the bill.
“Concerning costs and service effects on consumers, we would have to examine, analyze and make recommendations to the commission concerning each RPS docket,” said Michael Dougherty, the PUC’s chief operating officer, in an email. “Historically, the RPS has not reached (or come close to reaching) the 4 percent of the IOUs' annual revenue requirement for the compliance year.”