Oregon utility Portland General Electric Co. (PGE) is embracing a move by the state that effectively bans any new or repowered fossil fuel electric generation plants, including those powered by natural gas.
During a recent 2Q2021 earnings conference call, CEO Maria Pope said the energy transition to electrification and increased power demand fits nicely with the legislative push, which she called “the most significant clean energy standard in the country.”
The legislation signed by Gov. Kate Brown last month sets 2040 as the target for achieving 100% carbon-free electricity sold in the state. Currently, at least 17 other states and the District of Columbia have adopted similar goals, according to the Clean Energy States Alliance.
Under Oregon House Bill (HB) 2021, decarbonization targets are set for utilities to reduce by 80% greenhouse gas emissions by 2030, by 90% by 2035 and 100% by 2040. Additionally, it bans expanding or constructing power plants that burn fossil fuels.
PGE in June was tested by an extraordinary heat storm and wildfires, requiring it meet an all-time peak load of 4,441 MW.
“We continue to see payoffs from building a smarter and more resilient grid,” said Pope. “As Oregon’s climate gets hotter and drier, we are doing more than ever to reduce risk and keep our customers safe with prevention, detection and response.”
An indicator of PGE’s work to harden its system and enhance grid reliability is found in its pending general rate case request to the Oregon Public Utility Commission seeking $993 million in added rate base.
Pope said there are significant capital spending implications in the legislation. “We’ll be working collectively with regulators and stakeholders as we accelerate our clean energy future.”
One area strengthened in the new energy law is transportation electrification with the shift to tie more electric vehicles to the grid. “There are some really nice synergies as we do this work to invest in the system more for transportation because it makes our regular business that much more reliable,” Pope said.
For 2Q2021, PGE reported net income of $32 million (36 cents/share), compared with $39 million (43 cents) for the same period in 2020.
Meanwhile, Pacific Power spokesperson Tom Gauntt said, “Optimizing its mix of power sources, seizing on efficient market operations, and expanding transmission to access low-cost renewables, we see a path to meeting HB 2021’s goals.”
Oregon’s law does not impact the operation or lifespan of out-of-state generated power. However, Pacific Power plans to remove coal resources from Oregon rates in 2030, Gauntt said. “HB 2021 contains provisions that ensure reliability is not jeopardized.”
Oregon natural gas provider NW Natural Holding Co. did not take a position on the legislation. “We’re focused on pathways and policies to decarbonize the natural gas distribution system for our customers, such as meeting the renewable natural gas targets outlined” in state Senate Bill 98, said spokesperson Stefanie Week.
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