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Oregon Lawmakers Approve Bill to Transition Out of Coal Use

The Oregon legislature on Wednesday passed and sent to the governor legislation eliminating essentially all use of coal-fired electricity by 2030 while expanding goals for renewable energy, efficiency and electric-based transportation in the state by 2040.

Initially, it was unclear whether there will be further gains for natural gas, which has been expanding its footprint in the generation sector (see Daily GPI, Feb. 17;July 28, 2015; Jan. 2, 2015).

Oregon has one major coal-fired generation plant still operating at Boardman, and PGE is closing that facility in 2020 (see Daily GPIFeb. 18, 2015). PGE opened a 220 MW gas-fired unit at its Port Westward plant northwest of Portland along the Columbia River early last year (see Daily GPIJan. 2, 2015) and is building a 440 MW gas-fired facility, Carty, adjacent to the existing Boardman plant.

In response to the prospect for the legislation (HB 4036, SB1547B) passing, Portland General Electric (PGE) CEO Jim Piro said during an earnings conference call last month that PGE could be looking at the need to invest up to $1 billion in new gas-fired and renewable generation projects. "We've got some really competitive potential sites, particularly on the gas side,” he said.

Gov. Kate Brown has said she intends to sign the bill into law, telling local news media it provides her state with "a bold and progressive path toward the energy resources mix of the future." Both Brown and the majority in the state legislature are Democrats. Legislative Republican leaders criticized the bill, saying it will drive up electricity bills by 40%.

Under the bill, PGE and PacifiCorp's Pacific Power utility in the state will be coal-free by 2030, except for PGE's ownership interest in two coal-fired generators at Colstrip in Montana, which would have until 2035 to supply power in Oregon. The state's renewable portfolio standard would be doubled to 50% by 2040 with phase-in goals for 2025 (27%), 2030 (35%) and 2035 (45%).

Pacific Power's Scott Bolton, vice president of external affairs, called the legislation "workable and affordable," adding that Pacific Power, PGE and others worked with lawmakers on the measure. "Maintaining the affordability and reliability of the electric grid is very important to us," Bolton said.

PGE at the end of last year had to delay work and fire the contractor on the 70% completed construction of the $450 million Carty plant (see Daily GPI,Dec. 22, 2015), but during the earnings call Piro declared the project back on schedule and slated to finish construction at the end of July.

Under provisions of SB 1547B, pre-1995 biomass plants and associated thermal cogeneration projects would be eligible for renewable categorization, which is not possible under current law. In addition, a community solar program will be created, allowing residential and small commercial customers to participate in ownership of off-site solar projects that can be credited against their electricity bills.

Republican leaders in the Senate allege that Democrats "railroaded" passage of the legislation without adequate vetting. Thus, they contend the legislation would raise retail utility power rates 40% "while doing little to reduce pollution from carbon emissions."

"Despite concerns from the Public Utility Commission [PUC] about significant hikes in cost for ratepayers, numerous editorials questioning the back door deal-making that resulted in this energy mandate and repeated attempts to slow down the process to fully vet the program, Senate Democrats chose to move forward with the most costly and inefficient version of the renewable energy mandate," said Republican state Senate Leader Ted Ferrioli.

Lee Beyer, a Senate Democratic leader and former member of the state PUC, said the legislation moves Oregon away from fossil fuel energy production and toward "a healthier future with clean energy." Beyer said it "strikes a good balance."

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