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Pacific Power says coal deal won't hurt its customers


Pacific Power projected Thursday that a deal negotiated with environmental groups to phase out the use of coal power and mandate more renewables would raise its electric rates by less than 1 percent a year between now and 2030. All those costs are associated with adding more renewable energy, presumably wind and solar power and perhaps others.

Pacific Power negotiated the deal along with PGE and environmental groups allied with Renew Oregon, which is working on a similar ballot measure for November 2016. The negotiated alternative, which gave Pacific Power and PGE more flexibility to transition from coal to renewables, would save Pacific Power $600 million over the costs of the initiative through 2030, Pacific Power said.

Pacific Power did not project any rate impacts beyond 2030, when it would no longer be using coal power.

The negotiated package has been submitted to the Oregon Legislature for its short session beginning Feb. 1, in the form of House Bill 4036. HB 4036 requires PGE and Pacific Power to stop selling coal power here by 2035, and assure that renewable energy makes up half of their energy portfolio for Oregon by 2040, not counting hydro power.

Renew Oregon says it will go to the ballot with its initiative if the Legislature doesn’t approve the negotiated alternative.

The Industrial Customers of Northwest Utilities, which includes some of the state’s largest electricity users, opposes the deal, largely for fear it will drive up rates.

In a brief analysis released Wednesday, Pacific Power noted that natural gas is now at record low prices, but it doesn’t expect those prices to last. Renewable energy, largely wind and solar power, do not cost any money for fuel, Pacific Power reported, so there is less risk to ratepayers from fluctuating prices. The utility also can take advantage of some federal tax breaks for renewable energy recently extended by Congress.

“Even in an era of historically low natural gas prices, our analysis shows that renewable generation is the less expensive option and that additional renewable resources can be added while maintaining grid reliability,” said Rick Link, director of origination at Pacific Power and lead analyst on HB 4036.

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