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April 22, 2016

Higher Oregon renewable portfolio standard targets likely to boost wind power

graph of Oregon renewable portfolio standard requirements, as explained in the article text
Source: Source: U.S. Energy Information Administration, based on Monthly Electric Utility Sales and Revenue Report with State Distributions (EIA-826) survey and Oregon Senate Bill 1547
Note: Electricity service suppliers do not have to meet Oregon's RPS requirements.

Oregon recently enacted legislation that requires two large investor-owned utilities operating in the state to supply 50% of the state's electricity from renewable sources by 2040. The law also requires these utilities to phase out electricity from coal by 2030. With this step, Oregon joins Hawaii, Vermont, and California in having the highest renewable portfolio standard (RPS) targets in the country.

The newly enacted law, Senate Bill 1547, increases the RPS target for PacifiCorp and Portland Generation Electric (which together served almost two-thirds of Oregon's electricity load in 2015) from the current level of 15% renewable to 50% renewable by 2040. Eugene Water & Electric Board, a consumer-owned utility that served about 5% of Oregon's 2015 load, must meet an RPS target of 25% by 2025, which must be maintained through at least 2040.

The RPS mandate for the remaining electric utilities that operate in Oregon, made up of 37 small- and medium-sized utilities (investor-owned, cooperative, or municipal-owned utilities and public utility districts), remains at either 5% or 10% by 2025, depending on the percentage of electricity load supplied. Electricity service suppliers, which are alternative electricity providers to business consumers under Oregon's restructured market, collectively serve about 2% of Oregon's electric load and are required to meet the same RPS requirement as the utilities whose service territories they serve into. The bill builds on Oregon's existing RPS, established in 2007, by increasing and extending the RPS targets.

Oregon's RPS allows electricity generated from wind, solar (photovoltaic and thermal), hydropower, wave, tidal, ocean thermal, geothermal, hydrogen, municipal solid waste, and biomass energy to be used to comply with the RPS, as long as those generators came online in 1995 or later.

graph of electricity generating capacity in Oregon by initial year of operation, as explained in the article text
Source: Source: U.S. Energy Information Administration, Preliminary Monthly Electric Generator Inventory (EIA-860M)

Oregon already has significant hydropower capacity and relatively little coal capacity, but in-state capacity levels do not necessarily reflect the fuels used to meet Oregon's electric load. Although hydroelectric power plants make up nearly half of the state's generating capacity, much of the hydroelectricity generated in Oregon is exported to California. Because only generating facilities that came online in 1995 or later are eligible for use to comply with Oregon's RPS, most existing hydropower capacity in the state does not qualify as an RPS-eligible generation source.

In addition to setting targets for RPS-eligible generation, the new law also requires utility companies to phase out coal generation from electricity sales in Oregon by 2030. Although Oregon only has one coal plant in the state, in recent years Oregon has imported more than 30% of its electricity consumption from coal-fired power plants located in Utah, Wyoming, and Montana, according to Oregon's Department of Energy.

Oregon's utilities will likely comply with the new RPS targets by either building more renewable-sourced generators in Oregon or by using out-of-state sources. Given Oregon's relatively favorable wind resources, wind power is likely to be among the most common sources of new electric capacity in the state. Wind power has made up most of the capacity added in Oregon since 1995. Based on information reported to EIA, more than 640 megawatts of wind capacity is either under construction or expected to come online from 2016 to 2020. Because wind power projects have relatively short lead times, more capacity that could come online before 2020 may not yet be announced.

Principal contributor: Manussawee Sukunta