Oregon is on its way to mandating the reduction of air pollution through renewable energy with the passing of the Oregon Renewable Energy Act.
Senate Bill 838 stipulates that electric utility companies that sell electricity in an amount equaling 3 percent or more of all electricity sold in Oregon are required to generate 25 percent of electricity from renewable energy resources, or RES, by 2025.
In the last 150 years greenhouse gases have increased by 25 percent – the cause, industrialization. Rates continue to rise throughout the world despite global programs such as the Kyoto Protocol, which attempts to handle the global warming process.
More than 70 percent of electricity is generated from non-renewable sources such as coal and natural gas.
States throughout the nation have taken measures and passed laws in an effort to combat these greenhouse gas emissions.
Oregon is one of these states leading the way for renewable energy use as the state currently supplies 47 percent of all electricity through clean energy compared with the national average of 8 percent.
“We can make Oregon the national leader in renewable energy and renewable product manufacturing,” Gov. Ted Kulongoski said in his Oregon Renewable Action Plan. “Development of renewable energy will lessen our reliance on fossil fuels, protect Oregon’s clean air and create jobs.”
California generates more electricity from geothermal, solar and wind energy than any state, and Washington state leads the nation in power generation from all renewables combined.
At least 5 percent of the electricity sold to retail consumers in 2011 to 2014 must be from qualifying RES, 15 percent in the years 2015 to 2019, 20 percent in the years 2020 to 2024, and at least 25 percent in the year 2025.
Concerns surfaced that companies that sell less than the 3 percent minimum would eventually sell more electricity and by slipping between the cracks, avoid the RES mandates.
Legislators avoided this potential problem through a stipulation requiring any electricity provider that sells electricity that averages 3 percent or more in any three consecutive calendar years will be subject to the graduated RES mandates.
Retail electricity suppliers that sell less than 3 percent but more than one and a half percent of all electricity must generate at least 10 percent of their electricity from RES by 2025, and those that sell less than 1 1/2 percent of all electricity must generate at least 5 percent of their electricity from RES.
The House approved the bill on Wednesday with a 41-18 vote, and the bill will head back to the Senate for a concurrence vote before being sent to the governor for signature into law.
“We’re very happy and it’s a good bill that is going to make a big difference in Oregon,” said Bob Jenks, executive director of the Citizens’ Utility Board of Oregon. “The risk of not moving in a direction of clean energy in a time of global warming is a risk to consumers.”
The bulk of Oregon’s clean energy, 44 percent, is produced from hydroelectric power, while wind and geothermal only account for 1 percent. In the bill’s original introduction, hydroelectricity did not qualify as one of the possible renewable energy sources because large dams disrupt upstream and downstream fish migration. In the amended version, hydroelectric dams that are located outside of any protected area under the federal Wild and Scenic Rivers Act or Oregon Scenic Waterways Act qualify as RES.
Opponents argue the increased use of renewable energy will cause rates to go up, and the bill will also renew the public purpose charge added to customers bills.
“You get people down there in the government telling everyone how important the environment is, and telling us that everything viewed as an environmental expenditure is seen as a life or death experience,” said Jason Williams, executive director of the Taxpayers Association of Oregon. “The essential costs such as heating and lighting homes so people can stay alive are going to go to pay for environmental protection, and the government is taxing people where it is getting out of hand.”
The purpose charge Williams is referring to is a specific amount of money gathered by two of Oregon’s largest electricity producers. Both companies take 3 percent of the total charges collected from customers and put that money toward energy efficiency measures and renewable energy technologies, with no extra charge for customers.
The public purpose charge was initiated in 1999 as part of Oregon’s utility restructuring, and is set to expire in 2012. The charge will be extended to 2025 when the bill is signed into law.
“Anyone who says that taxes will go up doesn’t know what they are talking about and needs to re-read this bill,” Jenks said.
Large electric companies that oppose the bill argue that incurred costs associated with meeting the RES requirements will force a financial burden that is not fair. The legislature amended the bill to approve rate hikes for the recovery of costs.
The Oregon Public Utility Commission will engage in proceedings with the electricity company in a process similar to a legal court that includes introduction of evidence, cross-examination and submission of written briefs and oral arguments. The PUC will then establish a method for timely recovery of costs.
Customers will not see a tax raise – they may see a slight rate increase – but those in the field expect customer spending to eventually decrease because of the added draw from renewable instead of the traditional coal, natural gas and nuclear power.
“Do you think global warming is real? If you do then you have to admit that carbon regulation is coming and increasing rates on electricity from coal or natural gas,” Jenks said.
This bill ultimately creates three new economic advantages for Oregonians, said Troy Gagliano, senior policy associate for Renewable Northwest Project.
“Coal, natural gas and uranium are globally traded commodities and are subject to global markets, and the beauty of RES is that renewables produce electricity at a stable and predicable price,” Gagliano said. The more stable these prices are the better off economically Oregon residents are.
Competitive investment in Oregon’s clean energy industry will encourage cash flow in the economy because “it hangs the open sign on Oregon that we’re open for business for renewable energy,” Gagliano said.
For years, Oregon consumers have had the choice when buying RES electricity. Green Power options allow electricity consumers to purchase a “significant portion” of their electricity from renewable sources. The utility provider must also inform the consumers of the energy sources used to generate the electricity.
“I think it is important for the government to step in and for lawmakers to say something should be done when it affects our health so much,” Gagliano said. “People came from every corner of the state to say yes on this bill and that is beautiful.”
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