Governor's energy plan hits static.

Byline: David Steves The Register-Guard

SALEM - Gov. Ted Kulongoski's renewable energy goals met their toughest resistance so far Tuesday, when utility executives said they were unnecessary and could prove too costly.

Since January, Kulongoski has been pushing for a state policy mandating Oregon utilities to attain 25 percent of their electricity from environmentally friendly, renewable resources by 2025. Such resources would include wind, solar and geothermal energy and ocean tides.

The governor created a Renewable Energy Working Group to investigate the issues surrounding that goal and to recommend legislation to enact it. The group, which met Tuesday at a state office building, heard from a coalition of public and private utilities that such a mandate would pose serious challenges.

The coalition said in a written presentation that establishing a renewable energy standard "isn't necessary in Oregon at this time," given efforts already under way to expand the use of wind and geothermal power generation.

Jim Lobdell, an executive with Portland General Electric and a member of the working group, said the 25 percent threshold for renewable energy could force costly choices on utilities and their ratepayers. He said companies such as his have invested millions of dollars in constructing coal- and natural gas-burning power plants that could be idled if the energy they produce would push the utility's total electricity from nonrenewable sources in excess of 75 percent.

A similarly cost-related concern for public utilities was that they might have to give up some of their low-cost electricity from the Bonne-ville Power Administration's Columbia River dams in order to attain the mandatory 25/75 mix of power from renewable vs. nonrenewable resources, said Tom O'Connor, executive director of the Oregon Municipal Electric Utilities Association.

Eugene Water & Electricity Board spokesman Lance Robertson said that was a concern to his utility. However, he said, EWEB has not taken a position yet on the governor's proposal, and may end up achieving the 25 percent renewable energy goal regardless what the state does. Currently, 7 percent to 8 percent of EWEB's electricity is from a wind farm in Wyoming.

The board next week will consider expanding its use of wind and adding geothermally generated electricity, bringing its total renewable non-hydroenergy to 15 percent. That would give it 19 years to expand that percentage to 25 percent to meet the standard proposed by the governor.

Hydroelectricity would not be considered part of the 25 percent renewable energy goal, Kulongoski spokesman Lonn Hoklin said, because of its environmental drawbacks for salmon and because there is not capacity to add more dams.

Jeremiah Baumann, an environmental advocate on the working group, said he was shocked to hear the utility executives say they didn't think the renewable energy proposal, known as a "renewable portfolio standard," was necessary.

"For six months, their posture has been that they're very open to this," said Baumann of the Oregon State Public Interest Research Group. `So now, saying `We don't need a renewable portfolio standard' is a new thing.'

But utility executives said they continued to support Kulongoski's goal.

"We want to come up with a renewable energy policy that works for Oregon,' O'Connor said.

Dave Robertson, a lobbyist for PGE, said it was clear that the renewable energy standard would be a major issue in the Legislature. He said his company wanted to make sure that if such a proposal moves ahead, it is drawn up in a way that takes utilities' concerns into account.

He said one possible solution may be to cap the costs utilities and ratepayers would have to incur as they develop renewable energy facilities. Another could be placing incentives in the law to make the renewable-energy goals more financially palatable.

Hoklin said it wasn't surprising that utilities initially would express doubts about the proposal, given that their counterparts did the same in the 20 other states that have adopted similar standards. Hoklin said Kulongoski was firmly committed to the "mandate" approach.

"He believes mandates bring about certainty and assure the public there are real goals and real means of achieving those goals," Hoklin said. "Other states have done it. Oregon can do it, too."