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Oregon Proposes Coal Ban Without NatGas Backup

Oregon lawmakers are considering a proposal (SB 477) that would outlaw the use of coal-fired electric generation or the purchase of coal-fired power supplies by 2025. Natural gas-fired generation would specifically be prohibited from replacing the lost power supplies.

Early on, environmental groups are embracing the proposal while power utilities and natural gas interests are opposed.

SB 477 effectively goes after the hundreds of megawatts of coal-fired generation that Oregon utilities obtain from out-of-state sources, since the state's only coal-fired plant is scheduled to shut down in 2020, well ahead of the proposed legislative deadline.

Portland General Electric (PGE), which has concerns about the proposed legislation, in recent years has been opening natural gas-fired generation plants, along with adding substantial renewable sources of power from wind projects (see Daily GPI, July 30, 2014).

PGE has a 440 MW gas-fired plant slated to come online next year adjacent to its Boardman coal-fired facility, which is slated to close in 2020. Early this year the Portland-based power utility opened an expansion of its gas-fired generation facility at Port Westward, along the Columbia River northwest of Portland.

"We are very concerned that this legislation would set an arbitrary constraint on our resource planning process," a PGE spokesperson told NGI on Thursday. "We're concerned this could have significant impacts on electricity prices for our customers."

SB 477 would require that any coal-fired generation supplies for PGE and another major investor-owned utility, PacifiCorp, would come from specified renewable resources.

Specifically, the bill language calls for the electric utilities to eliminate their coal-fired generation sources by Jan. 1, 2025, and replace them with a "mix of energy resources that are at least 90% cleaner than coal-derived generating resources."

PGE has expressed concerns that natural gas-fired generation is specifically ruled out as a replacement, and that it is already by state mandate required to have at least 25% of its power come from renewables by 2025.

Coal-fired generation makes up about two-thirds of PacifiCorp's power supplies, and for PGE it accounts for about one-third. Oregon is ranked third among states for the production of renewable power, principally from wind projects.

SB 477 is sponsored by lower House Rep. Tobias Read and Sen. Chris Edwards, who heads the Senate Environmental and Natural Resources Committee, where he is also backing a low-carbon fuel standard for the state (SB 324).

The proposals are still in the very early stages of the legislative process, and various stakeholders are expected to weigh in on both bills.

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