Renewable Energy Standard Key to Oregon's Clean Energy Economy & Workforce Growth
If it ain't broke...
Following thoughtful input from a group of statewide experts in energy, Oregon legislators crafted an RES designed to guide a utility's long-term energy planning process towards more renewable energy. The state's three largest utilities must gradually meet the highest standard -- 25% by 2025. The threshold for being in the 25% category is whether the utility meets 3% or more of the states total load. Small and medium-sized utilities were given much smaller targets -- 10% by 2025 for medium sized utilities, 5% for the smallest. All utilities were given 18 years to reach their respective goals. Utilities were also given a wide variety of paths from which to meet their growing electricity demand with new renewable energy, such as: owning new renewable energy assets, purchasing green power from other producers, or purchasing renewable energy credits. If unforeseen events occur, utilities can set aside money for future investment in renewable resources.
When the law was passed in 2007, it might have been difficult to foresee the depth of the Great Recession that hit hard four years ago. Fortunately, Oregon's RES is designed to be flexible enough to accommodate a number of situations; a utility does not have to invest in power it doesn't need, and it does not have to give up clean energy purchased through long-term power contracts. To make sure that compliance is reasonable for customers, costs are capped at 4% of annual revenues. PGE and PacifiCorp's cost of renewable acquisitions so far are projected to be less than 1%.
Utilities that experience sustained growth, and pass the threshold of meeting 3% or more of the states demand are required to meet the higher RES standard of 25% by 2025. After all, the key policy question at the heart of the RES is, "With what mix of resources will utilities meet customers' electricity needs into the future?" The answer to that question is: Oregon has pledged to pursue a clean energy future by meeting our energy needs with aggressive energy efficiency and new renewable resources such as wind and solar. In order for its RES obligations to grow, a utility must average 3% of the state's total energy sales for three consecutive years. Additionally, a utility that started out as a "small utility" and experiences load growth enough to exceed the 3% threshold has a four-year "grace period" after three years of sustained load, before it must meet 5% of its energy needs with new renewables (it is put on the same time table of gradual increases of renewable energy supply as if the law had just taken effect). Since all utilities were planning on future new energy purchases under the RES, a 5% benchmark in four years should not come as a surprise.
Oregon RES Helps Companies Uphold Public Positions
Power in the Northwest region is among the lowest-priced in the nation, and Northwest industrial customers receive a better price for their power than do residential customers. Consequently, the Northwest has effectively attracted the investments of numerous high-tech data centers, as well as renewable energy companies, while other Oregon industries have declined or shipped jobs overseas.
While power prices are one factor in site selection, Oregon's relatively arid eastside climate and mild winters make it a prime location for data center developers2. These data centers do grow utility energy needs and may impact their RES obligations. However, tech companies and big brands like Facebook, Apple and Google have taken vocal public positions3 to uphold green practices as part of their corporate responsibility: they have pledged their intent to operate their facilities and products using clean, homegrown, renewable energy. It doesn't seem likely that these companies would want to fuel their operations with power that doesn't comply with Oregon's clean RES requirements.
Investments from Data Centers and Renewables Are Good For Oregon
Rural Oregon communities benefit from economic development through both data center construction and clean energy development. New renewable energy businesses -- including wind, solar and geothermal -- have brought over $5.4 billion4 of capital investment to Oregon, most of it invested in natural resource-dependent communities. Related project taxes paid to Oregon counties total more than $50 million dollars, breathing life back into rural communities in need of funds for schools, roads and social services. Furthermore, the influx of renewable energy businesses to Oregon drove job creation at such rapid rates in the sector -- amid recession years -- that major research institutions could not keep up and considered new means of counting jobs5.
Oregon is committed to a clean energy future, one that guarantees the highest quality of life for its citizens while fostering a prosperous business environment. Having to choose between clean energy or jobs and new business investment is a false dichotomy. Oregonians want more clean energy and they want more economic development. Recent polls6 and increases in voluntary clean power program participants show that support for renewable resources remains strong, no matter the nature of the economy. We should examine Oregon's RES successes -- including the clean energy economy and workforce it has helped to foster -- and identify how to expand them as our region strategizes to thrive past present challenges.