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Utilities, environmentalists strike huge deal to eliminate use of coal in Oregon, boost renewable energy

PHOTO COURTESY OF DAVID HANSON - A 2008 aerial photo shows the Colstrip coal plant in Montana; PGE is a minority owner of the plant. A potentially landmark deal between environmentalists and Portland electric utilities could phase out coal power in Oregon and speed its replacement with wind, solar and other renewable energy.

The deal, announced Wednesday, would avoid a ballot measure slugfest this fall, but only if the Oregon Legislature approves the compromise in its brief session next month.

Under the deal announced Wednesday, PGE and Pacific Power committed to halt selling coal power in Oregon by 2035, perhaps as soon as 2030. They also assured that half the energy they sell here by 2040 will come from green, renewable sources, not counting hydro power that’s currently part of their supply. The deal also could boost the use of electric vehicles in Oregon and make it easier to build large solar energy complexes.

Renew Oregon, a coalition of environmental groups working on a similar ballot initiative headed for the November ballot, struck the deal with the state’s two big electric utilities, along with the Sierra Club, which has been leading the charge against coal power here and nationally.

“We filed these initiatives and the utilities reached out shortly thereafter,” said Kristen Sheeran, Oregon director of Climate Solutions, which is part of the Renew Oregon coalition.

“If (the compromise) passes into law, we’ll withdraw the ballot measures,” said Brad Reed, communications director for Renew Oregon.

Angus Duncan, a consultant for the Natural Resources Defense Council who helped write the ballot measures, said environmentalists made relatively minor concessions.

“With a little shuffling, we could get maybe 90 or 95 percent of what we wanted,” said Duncan, who also serves as the volunteer chairman of the Oregon Global Warming Commission. In that capacity, he’s Oregon’s leading point person working to avert climate change here.

What utilities get

PGE and Pacific Power officials say the compromise provides them more flexibility than the ballot measures would to phase out their coal plants and assure the transition to renewables doesn’t unduly burden their customers with major rate increases or over-tax the electric grid system. The utilities also won new provisions that could help them build electric vehicle charging stations at peoples’ homes and workplaces, and get reimbursed via electric bills. The utilities also won a provision making it easier to do “community solar” in Oregon, which makes it easier to finance and build large-scale solar projects — and also is a top goal of the city of Portland.

Groups signing onto the deal include PGE, Pacific Power, the Citizens’ Utility Board of Oregon, Climate Solutions, NW Energy Coalition, Oregon Environmental Council, Oregon League of Conservation Voters, Natural Resources Defense Council, Renewable Northwest and Sierra Club.

Coal power is relatively cheap, but it heavily pollutes the air, causing human health problems. It’s also the leading source of carbon emissions in Oregon, along with motor vehicle exhaust.

TRIBUNE FILE PHOTO - Portland General Electric's Boardman coal plant, the last coal plant in the state, is slated to stop burning coal in 2020. PGE, along with Pacific Power, have agreed on a plan with environmental groups to completely phase out the use of coal power in Oregon by 2035 and accelerate the development of renewable energy.The compromise addresses both major sources of carbon emissions, likely putting Oregon on track to meet aggressive state goals designed to avert the worst impacts from climate change.

“It’s preparing Oregon for a clean energy future in a way that protects ratepayers,” Sheeran said.

The deal, if it comes to fruition, also puts Oregon on a similar trajectory as California and nations in Europe that are taking the most serious steps to prevent major climate change.

“You are looking at definitely one of the cleaner power mixes in the country, if not the world,” Sheeran said.

The compromise also would return Oregon to its place as an environmental leader on climate change, not long after the world’s nations agreed to voluntary steps at the international conference in Paris.

“Here is Oregon, not even a month later, the first state out of the gate really to make good on those commitments in Paris,” Sheeran said.

Less coal, more solar

PGE, which previously agreed to close the state’s lone coal plant in Boardman by the end of 2020, currently relies on coal for 24 percent of its energy, said Steve Corson, PGE spokesman. The Colstrip plant in Montana now provides about 10 to 12 percent of PGE’s power, said Brett Sims, PGE director of strategic resources.

In negotiations with the environmental groups, PGE won important flexibility to keep using coal from its Colstrip plant in Montana an extra five years, until 2035, because it is a minority owner of that plant and is contractually obligated to buy the power until then, said Sunny Radcliffe, PGE government affairs and environmental policy director.

Hydro power is generally not permitted by the state’s renewable energy mandate for utilities, because of its impact on fish. But hydro power also produces no carbon emissions, and now provides more than 20 percent of PGE’s energy mix, Sims said.

The compromise includes a community solar provision adapted from a bill being prepared by Environment Oregon and state Sen. Lee Beyer, D-Springfield, Sheeran said. The city of Portland hopes to foster more community solar projects, which would enable residents — including renters and those whose rooftops don’t allow much access to sun rays — to buy into collective solar projects. The utilities could also do community solar projects easier.

“The intent is anyone could do it,” Radcliffe said.

Pacific Power, as part of the six-state PacifiCorp utility based in Portland, relies more on coal than PGE — currently about 61 percent of its portfolio — and has been under pressure from the Sierra Club and others to move more aggressively away from coal.

The utility has proposed massive investments in wind and solar, but still proposed to rely on coal for 36 percent of its mix by 2030. Now it must move much faster. However, the deal doesn’t preclude Pacific Power from simply shifting coal power to other states that don’t have Oregon’s restrictions.

“What this is impacting is Oregon’s carbon footprint,” said Pacific Power spokesman Ry Schwark. Oregon can’t dictate what other states do, he said.

However, PacifiCorp also faces pressures to move away from coal in other states because of the Clean Power Plan advanced by the Obama administration. That plan would force closure of many of the nation’s coal plants, but it’s being fought in court by coal companies and many Republican governors.

Pacific Power prized the provisions in the deal that urge the Oregon Public Utility Commission to let utilities build electric vehicle charging stations and recoup the costs in utility rates, if the PUC deems it financially prudent. “At the moment, those have to be third-party suppliers,” Schwark said.

Boosting EVs

While Oregon has one of the nation’s leading networks of electric vehicle charging stations along its major highways, the state lacks charging stations where people spend most of their time, at work and at home, Duncan says. The deal could allow Pacific Power and PGE to enter that field and help provide charging stations at home garages and work sites.

Electric vehicles, while currently more expensive to buy, don’t pollute the air like gasoline and diesel engines, and they produce fewer carbon emissions even while Pacific Power and PGE rely on coal to produce the electricity.

As the two utilities phase out of coal, that means electric vehicles will provide more reductions in carbon emissions in Oregon.

One of Duncan’s big fears is that PGE will build a huge new natural gas-fired plant at Boardman to replace the coal burned there. While natural gas produces lower carbon emissions and air pollutants, scientists say the state — and world — must shift away from all fossil fuels if it is to avert dramatic climate disruption.

If PGE and Pacific Power have to build a large number of new solar, wind and other renewable energy plants to meet that part of the agreement, it’s less likely they’ll want to simultaneously invest in major gas plants in Oregon, Duncan said.

The likely outcome, he said, it that PGE and Pacific Power rely on natural gas as a longterm fuel source to supplement wind and solar at times when the wind isn’t blowing and the sun isn’t shining, rather than using it as a “base load.”

“That may be more of the role for gas-fired plants in the future,” Radcliffe said.

PGE, via Public Utility Commission proceedings, expects to sort out how it will replace the coal at Boardman this year.

Prospects in Salem

Generally, state lawmakers seek to submit more routine bills during the Legislature’s one-month sessions in even-numbered years. However, one of the reasons for doing those sessions is to strike compromises that avert nasty ballot measure fights, as this compromise is designed to do.

The deal only affects PGE and Pacific Power, the state’s two big private electric utilities and the only ones selling coal power. So parties to the deal hope the rest of the state’s electric utilities, which are consumer-owned, don’t seek to block the bill in the Legislature.

There’s also the strong possibility that oil companies, big industrial energy users, and their allies in business and the Republican Party will seek to change or thwart the compromise. Some of those forces have been fighting tenaciously against a 2015 law requiring lower-carbon motor vehicle fuels over the next decade, and may put that up for a statewide vote in November. Renew Oregon expects to play a lead role in opposing the oil companies’ ballot referral.

Duncan hopes that getting buy-in from Pacific Power and PGE will win at least some votes for the coal and renewable energy compromise from Republicans in the Legislature.

By next week, the utilities and others expect to generate new data that could prove critical in getting the package passed. That could show the best estimates on how the deal will affect electric rates in the future, and how it will reduce Oregon’s share of carbon emissions that lead to global warming.

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