Renewable energy bill passes.

Byline: David Steves The Register-Guard

SALEM - Eugene's public utility and the state's two investor-owned electric companies will generate a quarter of their power by 2025 from wind, the sun, waves and other renewable resources under a bill that cleared its last major hurdle Wednesday.

The House approved Senate Bill 838 by a vote of 40-19. It originated in the Senate but must return for that chamber's concurrence with House-passed changes. One of them will ease the `25 by '25' requirement for the Springfield Utility Board and five other medium-sized utilities.

Gov. Ted Kulongoski, leaders of both chambers, environmentalists and rural economic-development advocates all have hailed the push to set renewable energy standards as a top priority. It could be signed into law as early as next week, as the Senate intends to sign off on the House version on Tuesday.

The House dropped the Senate's requirement that six utilities - which each account for between 1.5 percent and 3 percent of the state's total power load - must meet the same standard as the three largest utilities in Oregon. Instead, by 2025, they will be expected to derive 10 percent of their electricity from renewable, environmentally friendly resources. The state's smallest utilities, those that account for less than 1.5 percent of the load, would continue to face a requirement that 5 percent of their electricity come from renewable resources, also by 2025.

While these groups would have the next 18 years to reach the new standards, the three largest utilities - Portland General Electric, PacifiCorp and the Eugene Water & Electric Board - would face interim standards:

5 percent by 2011.

15 percent by 2015.

20 percent by 2020.

The House vote reflected bipartisan support - 10 Republicans joined 30 Democrats in passing Senate Bill 838.

Many of the critics said they liked much about the bill but were not satisfied that customers of the three utilities covered by the 25 percent mandate were sufficiently insulated by steep rate increases as costly energy sources are brought online in place of cheaper, conventional generation plants, such as those fired by coal and natural gas.

That's been the biggest objection raised by the trade group that represents Oregon's biggest electricity consumers, the Industrial Customers of Northwest Utilities.

The group lobbied unsuccessfully for a cap limiting rate increases to 2 percent a year because of the costs of transitioning to renewable energy resources.

Instead, advocates of the bill and the Legislature stuck to a cost cap. It requires utilities incur cost increases of only 4 percent a year as they adapt to the new renewable energy standards.

"There's a difference between a rate cap and a cost cap," said Melinda Davison, the industrial customers group's legal counsel.

"Ultimately it's what consumers see on their bills ... that actually matters."

Jeff Bissonnette, lobbyist for the Citizens' Utility Board of Oregon, said a cost-cap would keep both costs and rates down.

Lance Robertson, a spokesman for EWEB, said he did not expect its 85,000 residential and commercial customers to pay higher rates because of the state's new renewable energy standards.

That's largely because EWEB had independently begun to expand its reliance on renewable energy nearly a decade ago - so its rates and its Green Energy option for customers already anticipate the costs of delivering a big chunk of electricity from wind and other renewable sources.

"With or without the renewable standard, EWEB was heading down a path that would have gotten us to 25 percent by 2025 anyway," said Robertson. He underscored the point by noting that EWEB already is at or near compliance with the first deadline, to get 5 percent of its electricity from renewable sources by 2011.

If there's a downside with SB 838, Robertson said, it's that the rest of Oregon's public utilities were released from the same standards set for EWEB and the two investor-owned utilities.

"We want everyone to sign on to the renewable revolution," he said.

Jeff Nelson, resource manager for the Springfield Utility Board, said that while SUB could have supported the version of SB 838 that required the utility to meet the same 25 percent standard to be set for EWEB, the 10-percent standard for smaller utilities such as SUB "is a little more realistic."

Another change important to SUB, Nelson said, was that utilities would not have to decrease their use of hydropower from the federal Columbia River dam system to meet the renewable energy standard. Currently SUB gets about 88 percent of its electricity from hydropower.

ENERGY BILL

Key provisions of SB 838:

What counts as renewable: Biomass, including landfill gas, woody biomass, spent pulping liquor; hydropower; wind; solar; wave and tidal; geothermal.

Large utility standards: (For those whose sales are more than 3 percent of the state's electricity usage, including EWEB): 5 percent by 2011; 15 percent by 2015; 20 percent by 2010; 25 percent by 2025.

Medium utility standards: (For those whose sales are 1.5 percent to 3 percent of the state's electricity, including Springfield Utility Board): 10 percent by 2025.

Small utility standards: (For those whose sales are less than 1.5 percent of the state's electricity, including the Emerald People's Utility District): 5 percent by 2025.

Ways to meet the standards: Build or buy renewable energy facilities; buy renewable energy; buy tradable renewable energy certificates; make payments into conservation programs; invest in research and development; "net-metered" electricity generation through solar, wind by customers.

Cost cap: If complying with the standard would cause utility costs to rise 4 percent higher than they would otherwise be, the utility does not have to comply.

Hydropower: No utility is required to displace the low-cost hydropower granted to them by the Bonneville Power Administration.