Meeting Oregon’s New Energy Standard

Earlier this month, Gov. Kate Brown signed a landmark bill making Oregon the first state in the country to cut ties with coal-fired power.

The new law requires that Portland General Electric (PGE) and Pacific Power — who together serve 70 percent of the state’s electricity needs — phase out coal-fired power by 2030 and serve half their customers’ demand with renewable energy by 2040.

Though environmental advocates — and everyone’s favorite Oscar winner — laud the new law as a forward-thinking compromise from a group of unlikely bedfellows, others have expressed concerns about the costs and efficacy of the legislation.

During last month’s Legislative session, Susan Ackerman, a gubernatorial appointee who chairs the Public Utilities Commission, called the provision to ban coal  by 2030 “both costly and ineffectual,” adding that it would raise customer rates without actually reducing carbon outputs or changing the way coal plants operate. She also expressed concerns about the bill’s provision to expand the state’s renewable portfolio standard.

On Friday, Ackerman effectively resigned from her position with the PUC.

Political nitty-gritty aside, the bill is now a fact of law. And to find out how it’s going to be implemented — and what it might cost — we invited Steve Corson from PGE and Scott Bolton with Pacific Power on to Think Out Loud.

Here are a few of the things we learned.

We’re All Connected

If you live in the United States, your home is powered by one of three interconnected electric grids. There’s everything west of the Dakotas (that’s the Western Interconnect), everything East of the Dakotas (the Eastern Interconnect) — and then there’s Texas, which has it’s own grid (named, you guessed it, the Texas Interconnect).

Oregon is part of the Western Interconnect.

PGE serves customers exclusively in Oregon, while PacifiCorp, Pacific Power’s parent company, serves ratepayers across six western states. Under the new law, PGE must divest from coal entirely, while PacifiCorp can continue to own and operate coal plants so long as coal-related costs are redirected to ratepayers outside of Oregon.

It’s A Constant Balancing Act

PGE and PacifiCorp are responsible for ensuring they’re putting as much energy onto the Western Interconnect as their ratepayers are consuming, but that energy doesn’t have to be produced in Oregon. It can come from anywhere on the grid.

To measure and move power, utilities companies rely on complex algorithms that can analyze how much energy ratepayers are consuming and source the lowest-cost energy available to meet that demand.

So if the wind is blowing hard at a PGE-owned wind farm in the Gorge, the company might use wind energy to meet ratepayer’s needs. When the wind dies down, they’ll turn elsewhere.

You Can’t Stop Coal At The Border

Once power is on the grid, electrons follow a path of least resistance, and there’s no way to tell the difference between an electron that was generated by coal and another that comes from, say, solar energy.

That means that while utilities providers can control how they produce power, they can’t control where it’s actually routed. So under the new law, Oregonians will still be importing coal-fired energy — they’ll just be paying renewable rates.

What’s The Damage?

Everyone agrees utility rates will rise, but estimates of rate hikes vary. PacifiCorp’s models project ratepayer costs will increase about 1 percent per year under the new law. PGE puts their number closer to 1.5 percent. And Republican state Sen. Ted Ferrioli (R-John Day), one of the bill’s most outspoken opponents, stated that the move will cost ratepayers $190 more each year until 2040.

None of these figures can claim to be totally accurate. That’s because analyses are projecting so far into the future that it’s impossible to know how much coal, natural gas and renewable technologies might actually cost. But utilities providers say that getting off of coal and investing in renewable resources will pay off in the long run.



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