Bill requires utilities to generate carbon-free power by 2040
Oregon will require its major utilities to generate all of their power carbon-free under a bill that is on its way to Gov. Kate Brown.
The Senate passed House Bill 2021 unamended on a 16-12 vote Saturday, June 26. The House passed it the previous day, 35-20. Democrats cast all of the votes for it; Republicans all against it, plus one Democrat and one independent in the Senate.
The bill requires Oregon's two largest privately owned utilities — Portland General Electric and Pacific Power, which serve about two-thirds of utility customers — to generate carbon-free power and reduce greenhouse gases 100% by 2040. It sets interim reduction targets of 80% by 2030 and 90% by 2035. Idaho Power, which serves northeast Oregon, is exempt, as are consumer-owned utilities that serve mostly rural areas. An exception is Eugene Water and Electric Board, a public agency also considered a consumer-owned utility.
Both large utilities will submit their plans to the Oregon Public Utility Commission, which will review them every two years.
The baselines for greenhouse-gas emissions would be developed by the Environmental Quality Commission, the policy-making arm of the Department of Environmental Quality, which is writing the state plan for overall reduction of greenhouse gases by 80% by 2050. Brown issued an executive order for the plan in March 2020 after the Legislature failed to pass broader climate-change legislation in 2019 and 2020. Democratic majorities were stymied by Republican walkouts that denied them the required number of members to conduct business.
Power generation, plus transportation in the form of gasoline and diesel usage by vehicles, are the largest sources of greenhouse gas emissions in Oregon. DEQ already monitors them.
According to a report by the U.S. Energy Information Administration, Oregon generated 49% of utility-level power from hydroelectricity in 2019, and 13% from renewable sources, mostly (11%) from wind turbines. The rest comes from power plants fired by natural gas or coal. Portland General Electric shut down its coal-fired plant near Boardman last year, but coal-fired power is still imported from Montana.
The leaders of the energy and environment committees in both chambers say the bill does not specify how utilities should reach those targets. The bill does bar any new power plants fired by natural gas or coal.
"In a little less than 20 years, Oregon's electricity will be powered by energy sources that produce no greenhouse gas emissions," Rep. Pam Marsh, a Democrat from Ashland, said.
"But it also will encompass energy sources still in development," she said, such as development of power using offshore tides. "The bill's ambitious timeline will send a critical market signal to spur advancement of those new technologies."
Sen. Lee Beyer, a Democrat from Springfield, said utilities already are moving toward sources other than fossil fuels.
"There is an economic reason why this change will happen," Beyer, who sat on the Public Utility Commission between his legislative stints, said. "In the Western market today, buying renewable power is cheaper than any other source."
In addition, utilities can promote measures such as energy efficiency, energy conservation and consumer shifts to off-peak power.
A less controversial measure, House Bill 2842, provides $10 million for the Oregon Health Authority to award grants for home repairs that improve energy efficiency. It passed the Senate on Saturday, 23-4, and the House earlier, 56-2.
Sen. Lynn Findley of Vale, the top Republican on the Senate Energy and Environment Committee, questioned the need for the carbon-free bill.
"If we did not do this bill today," he said, "we would still be 100% green by 2045 because our investor-owned utilities are moving that way now."
Two other things the bill does is to set aside $50 million for development of small-scale renewable energy projects — utilities would have to buy 10% of their power from them, up from the currently required 8% by 2025 — and set labor standards for project contractors.
Rep. Khanh Pham, a Democrat from Portland who worked on the successful 2018 campaign to create a city fund for small energy-related grants, said the legislation would draw in people of color, low-income people and rural communities that often feel excluded from the process. Utilities would have to ensure representation from these groups in naming advisory boards for their plans.
"It is rare to see a coalition this broad and this diverse come together and be united around a comprehensive solution to a complicated issue," Pham said.
Nikita Daryanani is the climate and energy policy manager for the Coalition of Communities of Color based in Portland.
"Now, as a result, Oregonians in every part of the state can see major benefits from more clean energy, such as good-quality jobs, community ownership of disaster-resilient solar projects, and less air pollution," Daryanani said. "We have adopted the fastest clean electricity timeline of any U.S. state with standard-setting opportunities and benefits for workers and the nation's first ban on new or expanded fossil fuel power plants."
Though most wind-turbine sites in the Columbia Gorge have been developed, wind and solar energy projects can be developed on the coast, Southern and Eastern Oregon.
"Almost all of this generation will take place in rural areas," Beyer said. "It is one of the biggest economic development programs that will hit rural Oregon."
But Findley was skeptical, based on previous environmental challenges to wind farms.
"For you to think we are going to develop all this electricity in rural Oregon," he said, "I guarantee you that most of those projects will not make it, because the land use process will stop them."
Transition or not?
Rep. David Brock Smith of Port Orford, the top Republican on the House Energy and Environment Committee, also was skeptical of the bill.
"The technology does not exist to achieve what this bill does," he said. "There is no technology out there to achieve the last 15% of the 100% clean goal — it does not exist."
He said $50 million is far too little to develop the amount of power envisioned by the bill's sponsors from small-scale projects — and that Oregon still will need to use fossil fuels to generate power that consumers demand. He referred to record-setting temperatures across Oregon as lawmakers wind down the 2021 regular session.
"We all know we cannot have that resiliency without the fossil fuels that provide the energy we need to make sure those air conditioners are running and people remain cool," he said.
But Meredith Connolly, Oregon director of Climate Solutions, said that is exactly why the bill is needed.
"As Oregonians swelter in a climate-fueled heat wave this weekend, the Legislature is taking needed action to transition to clean energy," she said. "In the face of unrelenting climate impacts, we need unrelenting climate progress. This is a momentous step."
The bill caps permitted rate increases at 6% of utility revenues, although the Public Utility Commission can intervene if increases have a negative effect on communities or if increases are required to maintain "system reliability."
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