Oregon’s Clean Energy and Coal Transition Act (Clean Energy Act) is a groundbreaking new law that supports the adoption of renewable energy in the state, including solar. The Clean Energy Act is a key example of work at the state level to increase solar energy and curb carbon emissions despite the Supreme Court’s stay of the Clean Power Plan, the federal rule reducing carbon emissions from coal-burning power plants. Also, the new law creates a framework for community solar in Oregon. We at Burnham will take a closer look at Oregon’s Clean Energy Act in this post.
Supported by Diverse Stakeholders
Oregon is the first state in the nation to require its utilities to stop selling coal-generated electricity in the state. There were several past attempts to eliminate coal energy and increase renewable energy, including solar, in Oregon. These efforts set the stage for stakeholder negotiations that included the state’s two largest investor-owned utilities, Portland General Electric and Pacific Power. A 2015 bill required the utilities to eliminate electricity from coal by 2025 and replace this electricity with sources that are at least 90% cleaner than coal. When the bill did not pass, Renew Oregon, a clean energy coalition, introduced a ballot initiative in late 2015 requiring the utilities to acquire half their energy from renewable sources by 2040 and eliminate coal-generated electricity by 2030.
According to Bob Jenks, Executive Director of the Citizens Utility Board of Oregon, Portland General Electric and Pacific Power did not object to the ballot initiative’s goals but were concerned about some of the initiative’s details. Mr. Jenks helped broker an agreement between the utilities and a number of state and national environmental groups, including the Natural Resource Defense Council, Sierra Club, Climate Solutions, and the Oregon Environmental Council. The stakeholders decided to use Oregon’s renewable portfolio standard, a regulation requiring the state’s utilities to use renewable resources for a percentage of their electricity, to achieve their goals. An agreement was reached at the beginning of 2016. However, the legislature needed to approve the agreement so it was introduced as Senate Bill 1547, the Clean Energy and Coal Transition Act.
Eliminates Electricity from Coal and Increases Renewable Portfolio Standard Requirements
Governor Brown signed Senate Bill 1547 into law on March 8, 2016. The Clean Energy Act requires the elimination of electricity from coal by 2030. However, this standard is only applicable to the state’s investor-owned utilities. Also, there is an exception for Portland General Electric’s electricity purchased from Colstrip, a Montana coal-fired steam electric plant Pacific General Electric partially owns. The utility is required to phase out electricity from Colstrip by 2035.
The state’s renewable portfolio standard dates back to 2007. Originally, Oregon’s renewable portfolio standard required investor-owned utilities to obtain 25% of their electricity from renewable sources. The Clean Energy Act increases Oregon’s renewable portfolio standard requirement to 50% renewable energy by 2040. The new renewable resource goals are being phased in with utilities required to achieve 27% by 2025, 35% by 2030, 45% by 2035, and 50% by 2040. Solar, as well as sources such as wind, biomass, and hydropower, are renewable resources under Oregon’s renewable portfolio standard.
The utilities are given a variety of ways to comply with the renewable portfolio standards. For example, they may own a facility that generates electricity from a renewable resource or buy the electricity from an eligible facility.
Supports Community Solar in Oregon
The Clean Energy Act also establishes a community solar program. Prior to the law, the Public Utility Commission of Oregon required a study of community solar options, programs that allow customers to own a portion of a solar project. The new law mandates that utilities enter into 20-year power purchase agreements with Oregon community solar programs.
Under the Clean Energy Act, a community solar project must have a generating capacity of 25 kilowatts or greater. A community solar program may not offer a customer ownership or a subscription in an amount that exceeds the customer’s annual use of electricity, and the utility must provide a credit on the customer’s electric bill for their portion of the community solar project’s energy. The program’s participants will also own a portion of the community solar project’s renewable energy certificates, tradable legal instruments that establish ownership of the renewable energy. In addition, the Clean Energy Act requires 10% of a community solar project’s capacity be made available to low-income customers.
Leading the Way for Other States
The stakeholder discussions that resulted in the Clean Energy Act provide an important model for consensus-building by other utilities and environmental and consumer groups. In addition, Oregon’s Clean Energy Act demonstrates an alternative path to the Clean Power Plan for achieving reductions in carbon emissions and increasing renewable energy. The state’s new community solar program will also support the adoption of distributed solar in Oregon and provide an example for other state’s considering community solar projects.