Our Opinion: Proposed coal deal is the best path to clean energy
Compromise achieved through coercion is not the optimal way to plan for Oregons energy future. However, it is in the best interests of the states two largest electric utilities and their customers to help shape the Oregon Clean Electricity and Coal Transition Plan, rather than allow a more extreme measure to proceed to the November ballot.
With the 2016 Oregon Legislature now in session, lawmakers should work to improve and, ultimately, approve the energy plan negotiated between Portland General Electric, PacifiCorp and environmental and citizen groups. After reviewing the broad outlines of the deal, we believe it will protect the vast majority of the two utilities customers even as coal-generated energy is eliminated from Oregons mix of power supplies.
Lawmakers in the Oregon House voted 39-20 Monday to pass House Bill 4036, which would double the states renewable energy mandate and eliminate coal from the states power mix. The bill heads next to the state Senate, where lawmakers could make changes in committee to recognize the unique needs of large industrial users before it comes up for a floor vote.
Oregons relatively cheap electricity has long been a competitive advantage in attracting industries that have hefty power requirements. The Legislature should make sure the advantage is maintained, even as the state inevitably moves away from coal power.
Some of the people who have a direct stake in the Clean Electricity and Coal Transition Plan utilities, residential ratepayers and businesses may question whether Oregon can make anything more than a symbolic statement against the use of coal and its effect on global warming. After all, Oregon only has one coal-burning plant, and it is slated to close by the end of 2020.
However, to a large degree, House Bill 4036 aims to take Oregon to a place it will end up anyway. Coal-generated electricity is on the decline in the United States, with hundreds of plants slated to close.
The legislative deal negotiated by PGE, PacifiCorp and Renew Oregon supports this trend by phasing out the sale of coal-produced electricity in Oregon regardless of where it is generated on the grid by 2030 for PacifiCorp and 2035 for PGE. It also requires that renewable sources, not counting hydro power, make up 50 percent of the two utilities Oregon energy portfolio by 2040.
In that regard, the proposed legislation is similar to a ballot initiative that will go forward if lawmakers fail to pass this act in February. However, the ballot proposal gives the utilities less flexibility in achieving that goal. PacifiCorp estimates the negotiated alternative will save $600 million for its local utility, Pacific Power, compared to the cost of the proposed initiative, through 2030. As a regulated utility, much of Pacific Powers savings would go to the companys ratepayers.
Overall, PGE and PacifiCorp project a negligible impact on electric rates due to the legislation. PacifiCorp officials place the effect at less than 1 percent a year. Ratepayers are further protected by a provision in the proposed law that would suspend the clean-energy requirements if they cause rates to increase by more than 4 percent in a year.
Still, this legislation like all compromises has its flaws.
As pointed out by a coalition of large industrial energy customers, PGE and PacifiCorp negotiated for provisions in the bill that make it harder for publicly owned utilities to take over portions of the private utilities territories or customers. The bill also would impose new requirements on third-party electricity suppliers that sell power directly to big businesses.
Beyond these complaints from industry, members of the states Public Utility Commission also have concerns about whether the bills current language undermines past decisions made by the PUC in rate cases.
The choice for the Legislature, though, isnt between this deal and a more perfectly balanced compromise that might be negotiated some time in the future. Lawmakers can either pass something now or concede their responsibility to voters in November.
Theres little doubt in our minds that Oregon voters would approve a clean energy initiative brought to the ballot by environmental groups. It is far preferable, though, to craft complicated energy policy through legislative and regulatory processes than through a one-sided ballot measure. Plus, if the Legislature writes and approves a law, it will retain the political credibility to make changes as needed in the future.
Lawmakers should move forward with the Oregon Clean Energy Plan, but not without making a long-term commitment to monitor its ongoing effects on rates and on the use of renewable sources of power.
Technology evolves swiftly in the world of energy, and it would be foolish to think that a law designed in 2016 wouldnt require adjustments before 2030 or 2040.
Pamplin Media Group