Dive Brief:

After weeks of negotiations, Oregon utilities have agreed to back a bill that would phase out coal-fired generation by 2030 and boost the state's renewable energy standards to 50% by 2040, Oregon Public Broadcasting reports.

The legislation applies to two of the investor-owned utilities in Oregon — Portland General Electric (PGE) and Pacific Power — which together account for about 70% of electricity delivered in the state. Consumer-owned power companies, public utilities and Idaho Power, the remaining IOU in the state, would not be affected, according to a summary of the bill provided to Utility Dive.

The proposed bill also maintains a 4% incremental cost cap, which means utilities do not have to add renewable energy to their portfolios if the incremental cost is more than 4% higher than the cost of developing non-renewable energy.

Dive Insight:

Oregon utilities could soon join their neighbors to the South in having to comply with a 50% renewable energy mandate, though on a more relaxed timeframe.

While California's 50%-by-2030 mandate was signed into law last year, the Oregon bill still has to muster approval from the Oregon Legislature, but Oregon Public Broadcasting reports that the legislation has some important new allies — the state's biggest power companies.

Ry Schwark, Pacific Power spokesman, told the news outlet that the flexible timeline ensures that his company can replace coal-generated power with renewable energy as the cost drops over time, minimizing the need to raise rates.

“This will accelerate our move away from coal-fired generation in Oregon,” Schwark told OPB. “It’s important that this does not necessarily make those plants go away. However, within the context of the (Environmental Protection Agency’s) Clean Power Plan, we’re going to be moving away from coal fired power anyway.”

While proposing to phase out coal-fired generation by 2030, the proposal exempts PGE's small stake in Montana's Colstrip coal-fired power plant. Even so, PGE would be required to cease purchasing power from the plant by 2035 under the bill, should it still be operating.

Pacific Power owns more than a dozen of coal-fired plants, predominantly located in the Rocky Mountain region. While the proposed bill cannot force any of the utilities to shutter their coal plants, it does require them to stop selling that power to Oregon ratepayers.

The proposal would phase-in the 50% Renewable Portfolio Standard over time. By 2025, utilities would have to achieve 27% renewable generation, then 45% by 2035, and the required 50% by 2040. However, there is a safety valve component which allows the Oregon Public Utility Commission to temporarily suspend the RPS if it would threaten reliability.

The bill also has a provision to create a community solar program in Oregon, which allows residential and small commerical customers of PGE and Pacific Power to participate in owning off-site solar projects to be credited against their electricity bill. The legislation would direct the PUC to ensure 15% of the overall community solar capacity be reserved for low-income customers.

Bob Jenks, director of the Oregon Citizens Utility Board, worked with several environmental groups to negotiate the agreements in the bill, which followed negotiations with supporters of a proposed ballot measure that set a similar goal to phase out coal from Oregon's power mix by 2030.

"I think the ballot measure clearly had an impact on the utilities thinking they wanted to avoid what would be a pretty ugly fight,” he told OPB. “Phasing out coal and replacing it with renewables is fairly popular with the voters.”