On the last day of February, the Oregon Legislature unanimously passed House Bill 4126 on to Gov. John Kitzhaber for his signature. This relatively small bill could potentially mean big opportunities for Oregon, and represents an all too rare win for rural communities in the state.
Pacific Power, along with every other Oregon public and private electric utility, supports this legislation as a “grand bargain” on energy policy this year.
Under bi-partisan leadership, House Bill 4126 provides additional flexibility for consumer-owned utilities that are facing significant growth, so that they can affordably meet Oregon’s renewable energy standard. Additionally, the bill a establishes a process for the investor-owned utilities, namely Pacific Power and Portland General Electric, to offer large customers access to renewable energy in a more direct way than is currently possible.
What does this means to the average electricity customer? Why is this a win for Oregon’s rural communities and their too often struggling economies?
The answer to those questions emerged last fall when Pacific Power was approached by several large businesses interested in investing in Oregon and creating jobs here.
These businesses included global leaders in high-tech manufacturing, social networking, consumer electronics, and the biggest names in retail. They all wanted to know how Pacific Power could provide them with more clean and renewable energy because their business plans and future investments are often tied to their sustainability goals. The utilities’ ability to offer a simple, direct means of using renewable power to run their operations is crucial to attracting more business and jobs to Oregon.
In short, HB 4216 allows utilities to offer these businesses the option of choosing, and paying for, renewable energy to meet their business needs, and to do so in a way that does not impact other ratepayers. Other states have this flexibility in their utility regulation. In the utility business, this is called a “green tariff.”
How exactly does a green tariff work? A customer walks into an ice cream store and only sees vanilla ice cream on the menu, but has a craving for mint chocolate chip. Currently, under the Oregon regulatory system, as an investor-owned utility Pacific Power would have to tell the customer that only “vanilla” is available. However, with a “green tariff” Pacific Power could provide different customers with different products — Customer A, mint chocolate chip; Customer B, strawberry; and Customer C could still choose to have plain vanilla.
Prices are still regulated by the state and an investor-owned utility will still need to justify the rates they propose — that doesn’t change. A green tariff will simply allow investor-owned utilities to be able to serve their customers with the flavor of product they want — and are willing to pay for.
This change is particularly important for rural Oregon, where smart energy policy, when coupled with available land, an eager workforce and friendly business climate, can help our state compete for new investment.
With the governor’s signature, Oregon will join states such as Nevada, Virginia, North Carolina and others in offering the renewable energy services that will help build our economy while seeking to keep rates for everyone as low as possible.
Scott Bolton is vice president, community and government relations at Pacific Power. He is responsible for the company’s legislative and governmental relations agenda and economic development for Oregon, Washington and California. Questions may be directed to Monte.Mendenhall@pacificorp.com.