Gov. wants state to tap its energy
Plan calls for more renewable energy by 2025
Published: October 02. 2006 4:00AM PST
To the west of Newberry National Volcanic Monument, a company hopes to tap the geo-thermal energy far beneath the Earth's surface and use it to generate power. In La Pine, another company has proposed to turn woodchips into electricity and build a biomass-fueled power plant.
Together, these companies have contracts with San Francisco-based Pacific Gas and Electric Co. to sell up to 160 megawatts of electricity, which could supply power to more than 100,000 people in California.
Representatives from both the geothermal and biomass projects said they would have sold power to Oregon utilities, but the California company was the first one to bite.
While Gov. Ted Kulongoski's office isn't opposed to the state sending its power elsewhere, staff want to see as much of Oregon's renewable-generated power being used within the state, said David Van't Hof, the governor's sustainability policy advisor.
To promote the generation and use of renewable energy in Oregon, the governor has proposed establishing a rule stating that a quarter of Oregon's power will be from renewable sources by 2025. He is planning to put the proposal to the Legislature in the 2007 session if he is re-elected.
The mandates would be part of a policy called a renewable portfolio standard. The goals are different for the 21 states and the District of Columbia that have renewable portfolio standards, often referred to as an RPS.
In Oregon the proposed standard would require the investor-owned utilities such as Pacific Power and Portland General Electric to generate 25 percent of their electrical power from renewables by 2025.
"Right now, we are seeing growth in the renewable sector (in Oregon), but the states that are showing the most rapid rate of growth are states that have enacted an RPS," Van't Hof said.
"If we don't have an RPS ourselves, all of our renewable resources will go right to the California market," he said.
California's renewable portfolio standard requires 20 percent of the electrical power to be generated by renewables by 2010, and 33 percent by 2020, according to the Database of State Incentives for Renewable Energy.
Oregon has some of the best renewable resources in the country, Van't Hof said, including wind power and the potential for power from geothermal and wave energy. But the state needs to find a way to help those energy-production sectors take off, he said.
In addition to the environmental benefits of using renewable energy instead of fossil fuels, there are economic considerations as well, he said.
The cost of electricity generated at coal or natural gas-fired power plants depends on the price of the fuels, which can be volatile and will probably continue to rise, he said. Renewables will also increase the state's energy independence, introduce new job opportunities in Oregon and add diversity to the sources of power, he said.
"It's kind of like stock investments," Van't Hof said. "If you put it all into one area, if that area gets hit you're in trouble."
The portfolio standard is one piece of energy-related legislation that the governor hopes to send to the Legislature for the 2007 session if he is re-elected, he said, along with proposals addressing biofuels and tax incentives for new renewable energy projects.
Expanding the tax credit program, and changing it to include businesses that manufacture components of renewable energy production such as wind turbines, could help attract more companies to Oregon.
"It's an economic development strategy, then it will also help accelerate the renewable energy projects in Oregon," Van't Hof said.
Gubernatorial candidate Ron Saxton's campaign did not return calls to comment.
To provide advice and work out some of the details on these legislative concepts, the governor and the Oregon Department of Energy formed a Renewable Energy Working Group.
The group has been tasked with figuring out how to implement the state's renewable energy goals, said Cylvia Hayes, a member of the working group and the director of the Bend-based 3EStrategies, a nonprofit organization involved with sustainable energy.
The renewable portfolio standard is probably the most complex and possibly controversial issue among the working group's tasks, she said
"The importance of this is there are currently 21 other states in the country that have renewable portfolio standards," she said. "Oregon is not one of them. That puts us at a very significant disadvantage."
A couple years ago, she met with representatives from 10 energy companies from the United Kingdom who were interested in expanding into the United States, she said. They expressed interest in Oregon because of its resources and progressive policies, but were wary of making a large capital investment in the state without a portfolio standard or similar state policies that set renewable energy goals.
"They were worried about spending a lot of money without having a powerful driving force," she said.
The working group is paying attention to a number of details within the portfolio standard proposal, she said. One aspect is making sure that utilities can meet the goals without being "overly burdened by excessive costs," she said. The proposal will have a cost cap, which would state that if the cost of producing renewable energy is a certain percent more than the cost of producing conventional, fossil fuel energy, the utilities would be exempt.
"I think the reality is, when you look at the trends of conventional energy ... those are becoming so much more expensive that I don't expect that we'll hit a cost cap with renewables," Hayes said.
The group is also considering how to make sure that the portfolio standard encourages smaller renewable projects, like small solar power.
"We want to make sure that we structure it so that we really can capitalize on our diversity," she said.
The utilities are involved in the working group as well, said Steve Corson, spokesman for Portland General Electric. His company supports the renewable portfolio standards, he said, although there are details about how it will work that need to be addressed.
"The RPS can be, I think, very useful in helping us with looking at how we put together our portfolio of energy resources to serve our customers," he said. It would give the company a structure to use in looking at future power generation.
"One way or another, we need more power. And as we put together a plan for how to do that, it's helpful for us to think in terms of how the RPS may affect our strategy," he said.
The company already purchases wind power from two plants, and is pursuing new renewable resources with a wind-generating plant on the drawing board, he said.
Some of the details that need consideration, however, include what counts as renewable energy, for example if hydro-powered projects count or not, Corson said.
In addition, companies need "meaningful, long-term" federal and state incentives to help develop renewable resources, he said, and there has to be a balance between the demand for energy and the resources available to supply that demand, he said.
Some people are concerned that a portfolio standard could raise Oregonians' power rates, however, and suggest that there are ways besides mandates to promote renewable power.
"An RPS sounds good, sounds reasonable, sounds logical ... but the consequence is, your power rates are going to go up," said state representative Chuck Burley, R-Bend, who has been to some of the working group meetings.
Others, including Van't Hof and Hayes, said they didn't think the rates would go up significantly, although if there was an increase there would be cost caps.
Even if there was a small increase, however, it could have a big impact on industries and businesses that use a lot of power, Burley said.
"Are we being competitive to keep and attract businesses to the state of Oregon?" he asked.
He suggested having a voluntary set of goals over time, combined with tax incentives to encourage renewable energy production.
The state energy department is going through the details of a portfolio standard provided by the working group and the governor's office, and will provide those information to an attorney at the Legislature, said Diana Enright, assistant director in charge of renewable energy and communications with the department. The attorney will then write it in bill language, and file it for the 2007 Legislature session.
Having a quarter of the state's electricity from investor-owned utilities come from renewable energy in 19 years is an ambitious goal, but it is attainable, said Van't Hof, with the governor's office.
"We're setting a high bar, and we're confident that over the next 20 years there's going to be a whole revolution of renewable energy technologies," he said. "With all the resources that Oregon has, if any state can meet the 25 percent by 2025, it's us."
Kate Ramsayer can be reached at 617-7811 or at kramsayer@bendbulletin.com.
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