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Oregon Poised to Be First State Cutting Ties With Coal-Fired Power

March 15, 2016

One of the last actions Oregon lawmakers took before adjourning Thursday was passing a landmark clean-energy bill.

The Clean Electricity and Coal Transition Bill lays out a timeline for Oregonians to stop paying for electricity from coal-fired power plants through its two largest utilities, PacifiCorp and Portland General Electric.

It requires the two investor-owned utilities to phase out coal-fired power by 2030 and double their renewable energy use by 2040. With the governor’s signature, the bill would make Oregon the first state to legislatively cut ties with coal plants and the carbon emissions that come with them. The utilities opted to support legislation to preempt a proposed ballot measure with similar goals.

While environmental groups celebrated the move, critics say the bill could raise electricity rates without reducing greenhouse gas emissions.

Right now, Oregon gets about a third of its electricity from coal – much of it from coal-fired power plants in other states. The newly passed bill wouldn’t shut those plants down. Rather, it requires PacifiCorp and PGE to stop using those plants to serve Oregon customers. Meanwhile, the utilities have committed to expanding their use of renewable energy to 50 percent over the next 25 years.

It allows Portland General Electric a little more time – until 2035 – to eliminate coal-fired power from the Colstrip plant in Montana if the other owners refuse to shut it down.

Andrea Durbin, executive director of the Oregon Environmental Council, helped negotiate the bill's language with the two utilities. She said the bill will make it harder for coal plants to continue operating by reducing their customer base.

"It is a major, major achievement," Durbin said. "While we can’t shut down coal plants outside of Oregon, it is a huge step forward in making it less cost effective and harder for those coal plants to operate long term."

Oregon Public Utility Commission Chair Susan Ackerman was among the critics who pointed out that the bill would allow out-of-state coal plants to continue burning coal to serve customers outside of Oregon, so they'll still be emitting greenhouse gases. Ackerman warned lawmakers that bill would be "costly and ineffectual."

"It will raise customer rates but not actually reduce the amount of carbon emitted into the air as compared to a future without that provision," she said in a recent legislative hearing.  "We believe that there are policies that are more effective for the environment and for consumers."

Dave Robertson, vice president of public policy for PGE, said his company only expects the bill to raise rates by 1.5 percent. While the new law won’t directly close out-of-state coal plants, he said, it does put additional pressure on their owners.

"There are a whole lot of pressures on coal plants right now," he said. "Legislation like this that increases renewables and other rules that come along that cause coal plants to become more expensive certainly have utilities thinking what’s the future of coal and can we really rely on that for our future energy mix."

Robertson said it will take a major effort for his company to meet the 50 percent renewable energy goal.

"You can have a dam always flowing water through, and you can have a natural gas plant always turning a turbine, but the wind doesn’t always blow and the sun doesn’t always shine, so you need to have back up for that, and that will be part of the mix we have to do, too," he said. 

The bill has measures that would allow utilities to ease off the goals if they drive up electricity prices more than 4 percent or put the reliability of the grid at risk.

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