Oregon just used its Democratic majorities to pass a wildly ambitious clean energy bill

Last week, Oregon became the first US state to legislate its way free of coal for good.

After well over a year of heated political controversy, including some high drama in the final days of the legislative session, the Oregon legislature passed, and Gov. Kate Brown (D) signed, the Clean Electricity and Coal Transition Plan.

The bill would do a number of things; most notably, it would instruct the state's two big investor-owned utilities — Pacific Power (PAC) and Portland General Electric (PGE), which together provide about 70 percent of the state's power — to:

• Eliminate coal from their portfolios by 2030 (technically PGE can hang onto a small amount until 2035)
• Get 50 percent of their power from renewable sources by 2040, doubling the current renewable portfolio standard (RPS) of 25 percent by 2025

Oregon's new RPS goal is among the most ambitious in the nation. Only four states have tougher targets: California and New York aim for 50 percent by 2030, Vermont aims for 75 percent by 2032, and Hawaii is going for 100 percent by 2045.

And Oregon already gets 40 percent of its electricity from carbon-free hydro, so this would put its total carbon-free power share at 90 percent by 2040. Not bad, Beaver State.

Oregon.gov

This post is in three parts. First, a brief account of the history of this bill, which carries some trenchant political lessons. Second, a quick look at the other stuff the bill does, some of which is pretty cool. And third, a closer look at the controversial "coal-free" provision and what effects it might (or might not) have on carbon emissions.

Environmentalists and Democrats brought everyone to the table except Republicans, who refused the invitation

There's an ongoing argument among environmentalists and climate hawks about the best way to make progress on climate change. One side argues that bipartisanship is the only way, so Dems must seek out conservative-friendly policies, speak in soothing tones, and compromise in advance. The other side argues that the better strategy is for Dems to win, amass power, and make progress whether Republicans like it or not.

Oregon's experience weighs in favor of the latter argument.

In an otherwise dismal year for Democrats across the country, the party gained seats in both houses of Oregon's legislature in 2014 (the only state where that happened). The balance is now 35-25 in the House, 18-12 in the Senate.

(Wikipedia)

Oregon also has a Democratic governor. John Kitzhaber was reelected in 2014 but resigned the following year amid scandal; Kate Brown replaced him.

(Photo: JIM WATSON/AFP/Getty Images)

In short, Democrats can basically pass what they want. But of course they still have to be pushed to do so.

The first attempt to pass a clean energy bill, in 2015, died in committee, baffling and frustrating advocates. So a coalition of groups called Renew Oregon started gathering signatures to put the issue on the ballot.

The ballot initiative not only would have eliminated coal and doubled the RPS, it would have docked the salaries of uncooperative utility executives.

That got everyone's attention. To avoid what they viewed as the greater evil of the ballot initiative, utilities sat down with consumer, industry, and green groups to hammer out a consensus legislative version of the proposal.

(Renew Oregon)

Republicans did not like it. At all.

After the bill passed the House on a near party-line vote, Republicans in the Senate did everything they could to gum up the works and delay the bill — refusing to work nights or weekends, demanding that all bills be read out loud (seriously), even walking off the job last week.

Eventually the antics ran their course and a deal was brokered. In exchange for a vote on the energy bill, Dems gave up on a few of their other bills and allowed a bill delisting gray wolves from the endangered species list to go forward.

And lo, the energy bill passed.

Democrats elected majorities and passed their agenda, despite Republican obstruction. It's a proven strategy for clean energy progress.

Other cool stuff in the bill

The bill has several other provisions, on everything from energy efficiency to solar for low-income communities. A few struck me as particularly intriguing.

One instructs PAC and PGE to submit plans to "accelerate transportation electrification," which could involve anything from vehicle charging stations to vehicle-to-grid (V2G) programs. All utilities are going to be doing this kind of stuff sooner or later (electrification is the future!); pushing Oregon utilities to get ahead of the curve is smart.

Another provision says that by 2025, 8 percent of PAC and PGE power must come from a) small-scale renewable energy projects of 20 MW or less, or b) co-generated heat and power (CHP) projects. That's a modest step toward Denmark-style decentralization of energy, which also has the effect of expanding political constituencies for further action.

(Photo by Melanie Conner/Getty Images)

One other thing. There were reports early on that Oregon's public utility commission (PUC) had some concerns about the bill, so an amendment was added that would allow the PUC to intervene if prices went up too quickly or if, in its judgment, the utilities weren't following a cost-effective strategy.

Why was the PUC concerned? That brings us to our final topic.

If Oregon goes coal-free, does it reduce any carbon emissions?

Emails from PUC commissioners (obtained by the Oregonian via FOIA) reveal that they don't think much of the bill. In one email, John Savage, the longest-serving of the state's three utility commissioners, called the bill "absolute crap." PUC chair Susan Ackerman has publicly opposed it as well.

Here's what worries them.

PAC and PGE have ownership shares in a number of out-of-state coal plants in Utah, Montana, and Wyoming. Roughly a third of Oregon's power comes from those plants (as well as from Oregon's one remaining coal plant, which is scheduled to shut down in 2020).

(ODOE)

The bill does not require PAC and PGE to give up those ownership shares or to shut down their share of the coal capacity. It just requires them to procure Oregon's power elsewhere.

What this means, argued Ackerman, is that those out-of-state coal plants will just sell their power to someone else. They will still be running, still polluting. They will shut down when forced by federal regulations and market pressures; nothing Oregon does will accelerate that.

So the bill won't reduce carbon emissions, it will just displace them. It will force Oregon ratepayers to pay more for alternative sources rather than buy cheap, fully amortized coal power that's going to be used anyway.

Or so goes the concern. What to make of it?

It is true in theory that the coal plants in question could just sell Oregon's share of the power to someone else. But it's probably not true in practice. The biggest markets in the West are shifting away from coal, and there's not a lot of slack demand for coal power; if anything, there's an excess of capacity.

(Tedder, via Wikipedia)

California ran this experiment already. Its emission standards and renewable energy mandates pushed its utilities quickly out of coal. As NRDC's Noah Long and Oregon Global Warming Commission Chair Angus Duncan describe, what happened next isn't what Oregon's PUC fears.

The coal plants California was buying from didn't just sell the power elsewhere. They struggled to find buyers, and mostly failed. In the end, they ended up retiring an amount of coal capacity roughly proportional to the lost demand from California. Net carbon emissions did fall.

If California's experience is any guide, the lost Oregon demand for coal will — contrary to the PUC's concerns — lead to the retirement of a roughly commensurate amount of coal capacity.

According to Long, Oregon represents about 25 percent of the demand for power from those coal plants it (co-)owns across the West. And he expects about 25 percent of that capacity to retire ahead of schedule thanks to Oregon's new bill.

The only way to find out who's right is to try it, and that's what Oregon is doing, so we'll know soon enough. Coal plants face mounting pressure from every direction, so I suspect many of them will close ahead of schedule; it won't always be easy to pick apart the causes.

As to the perpetual boogeyman of higher electricity prices, the one study that's been done (by consultancy Flink Energy) found that Oregon's legislation is likely to slightly reduce rates.

Even the utilities themselves don't forecast large rate increases. In fact, in its testimony to the legislature, PAC wrote: "Removing coal-fueled generation from Oregon rates by 2030, under the bill provisions, will have no impact on customer rates through 2030 when compared to current Oregon policy."

(EIA)

And in the long term, the state will benefit from an accelerated buildout of renewable energy, with all the jobs and economic development it brings.

Oregon has entered the climate policy big leagues

With this bill, Oregon has shown ambition on clean energy that is matched by few other states and exceeded only by New York and California, which are roughly five and 10 times its size, respectively.

How did it get there? By electing a lot of Democrats.

Just to the south, California also elected a large Democratic majority and is vaulting ahead on clean energy.

Just to the north, bumbling Washington Democrats have blown their Senate majority, so climate action is bottled up. But it may go on the ballot in this upcoming election (a drama-filled story worth its own post).

One way or another, within the decade the West Coast likely going to cohere into a large, unified market for clean electricity, low-carbon fuels, electric vehicles, and smart-grid technology.

Serious federal action may be impossible with an intransigent Republican Congress, but Democratic states along the Pacific Ocean are slowly stitching together a kind of shadow clean energy nation, with an economy 12 times larger than Denmark's.

Oregon may not be that large on its own, but it just became part of something big.

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