SB 1547: A Step on Oregon’s Path to Reducing Greenhouse Gas Emissions:

By Andrea Lang, Energy Fellow

 

Credit: Oregonlegislature.gov

Last Wednesday’s passage of SB 1547, called the “Clean Electricity and Coal Transition Act,” marked a historic first step towards reducing Oregon’s carbon footprint. The bill is the first in the nation to attempt to completely eliminate coal from a state’s electricity supply, and may be the first of many steps on the path towards getting Oregon on track to meet its goal of reducing greenhouse gas emissions to75% below 1990 emission levels by 2050. This blog explores what the bill achieves and outlines future strategies Oregon could pursue to achieve its emission reduction goals. 

What does the bill do?

The Clean Electricity and Coal Transition Act contains a number of components aimed at reducing carbon emissions. To summarize, the bill: (1) requires the state’s two investor-owned utilities to eliminate coal-fired generation from their retail electricity mix in Oregon by 2035 (with an exemption for short-term wholesale purchases), (2) increases the state’s renewable portfolio standard to require that 50% of Oregon’s electricity comes from renewable sources by 2040, (3) creates a community solar program, and (4) allows utilities to propose transportation electrification projects. 

What other policy options are available?

There is no doubt that the bill improves on existing policies to reduce Oregon’s carbon emissions. However, this bill should not be the “end of the line” in terms of Oregon’s actions to address climate change. In fact, when lawmakers and advocates discussed a previous and nearly identical version of SB 1547 in the Senate Committee on Business and Transportation in February, Oregon Public Utility Commissioner Susan Ackerman stated that she thought there were better policies to address greenhouse gas emissions. Specifically, she identified cap-and-trade and carbon tax policies as being effective, low-cost ways to reduce emissions in the state, and also said that she thought such policies could coexist with and supplement the Clean Electricity and Coal Transition Act. 

Cap-and-trade programs, such as the program currently in place in California, work by mandating a cap on emissions, allocating emission allowances, and allowing emitters to buy and sell those allowances. By creating a finite number of tradable emission allowances, cap-and-trade policies create an incentive to reduce emissions by establishing a market for buying and selling allowances. Oregon had considered enacting a cap-and-trade policy this year, but the bill did not make it out of committee. 

A carbon tax is the other obvious policy option for Oregonians to consider as a next step. This relatively straightforward policy would involve levying a per-ton tax on carbon dioxide emissions. As a result of the tax, emitters are forced to consider whether the benefits gained from emitting carbon are greater than the cost of the tax. In addition, the revenues generated could be used to offset other tax burdens, mitigate the effects of climate change, or support other efforts to reduce emissions. A Congressional Budget Office study concluded that carbon taxes can be up to five times more effective than a cap-and-trade system, but voters often find the idea of a “tax” hard to swallow, making such policies politically difficult to enact.  However, British Columbia has already adopted a carbon tax, and Washington is currently considering one as a result of a successful ballot initiative. 

Adoption of either of these policy options could be the next step in reducing Oregon’s carbon emissions once Governor Brown signs the Clean Electricity and Coal Transition Act into law.

Is piecemeal policy-making enough?

In addition to considering individual policies to address carbon emissions, it is time for Oregon to carefully assess whether its existing energy governance framework is sufficient to address the problems facing the state. Climate change, along with a rapidly transforming electricity system, likely necessitates a reform of the state’s energy governance. For example, New York is attempting to reform its energy system through its “Reforming the Energy Vision” (REV) initiative. The REV aims to develop a comprehensive strategy to evaluate the ways the electricity system is changing or should change, and to address those changes. As we explained in our Countdown to 2050 Report, Oregon is sorely lacking a comprehensive policy framework to facilitate the transition to a 21^st century energy system. Continuing to enact piecemeal policies without adopting a comprehensive strategy and establishing an effective governance system to properly implement such policies is ineffective. 

Thus, it’s important that the passage of the Clean Electricity and Coal Transition Act does not make renewable energy and climate advocates complacent. To be sure, the bill is a useful step in the right direction, but it’s only one of many steps on the path to meeting Oregon’s emission reduction goals and transitioning to a 100% renewable power grid.

Transportation Electrification: A Primer on One of the Less-Reported Provisions of Oregon’s Proposed Clean Electricity and Coal Transition Bill

Credit: NREL.gov

By Andrea Lang, Energy Fellow

              

The Oregon Legislature is likely to vote on the proposed Clean Electricity and Coal Transition bill in the next few days (either as HB 4036 or as SB 1547). Although the most controversial parts of the bill focus on transitioning Oregon off of coal and increasing the state’s renewable portfolio standard, the bill addresses a number of other energy-related issues. Among these is a provision that aims to accelerate transportation electrification. So what is transportation electrification, who wants it, and what would this bill do to advance it?

What is transportation electrification?

Transportation electrification refers to the gradual shift away from gasoline-fueled vehicles towards vehicles that are fueled instead by electricity. It’s worth noting at the outset that although this sounds like a shift from old technology to new technology, it is absolutely not. Energy.gov provides a great timeline of what has happened with electric cars, but here are some highlights: the first electric successful electric car appeared in the U.S. in 1890, and by 1900, one-third of cars on the road were electric. But the debut of the more affordably priced Ford Model-T in the early 1910s contributed to an explosion of sales and the corresponding infrastructure—gas stations—to support gas-fueled vehicles. One of the biggest barriers to more widespread deployment of electric vehicles today is that existing infrastructure favors gas-fueled cars because there are many more gas-stations than there are electric plug-in stations to charge electric vehicles; in short, owning a gas-fueled vehicle is simply more convenient. Thus, transportation electrification efforts are largely focused on developing that infrastructure.

Who wants transportation electrification?

Transportation electrification is a popular idea for both utilities and environmentalists, so it’s no surprise that a provision addressing it appears in a bill negotiated as a compromise between both sets of interests. On the utility side, Edison Electric Institute (an association representing investor-owned utilities across the country) published a report in 2014 explaining the benefits of transportation electrification for utilities and recommending ways that utilities can lead in developing that infrastructure. The report noted that energy efficiency efforts will continue to cut into utilities’ retail sales, but that transportation electrification could increase load (demand), ensuring sales long into the future. In addition, the report recognized that the government is likely to mandate increased electric vehicles in the future, and that utilities should therefore by at the forefront in shaping the market for transportation electrification.

For environmentalists, a move towards electric vehicles is vital for reducing transportation emissions. The transportation sector is Oregon’s largest-emitting sector, contributing 39% of the state’s total emissions. Although electric vehicles will not be carbon free until the electric grid is carbon free, electric vehicles in Oregon annually generate roughly 1,500 lbs. of CO₂ equivalent (a number that will drop the greener our grid becomes), compared to the roughly 11,600 lbs. emitted by gasoline vehicles. Clearly, shifting to electric vehicles on Oregon’s relatively low-carbon electricity grid would be a huge step towards reducing emissions from the transportation sector.

What would this bill do to advance transportation electrification in Oregon?

The bill would require Oregon’s Public Utility Commission (PUC) to direct the state’s two large investor-owned utilities to submit applications for programs to accelerate transportation electrification. Essentially, the bill allows utilities to propose development of electric vehicle charging infrastructure projects that utilities could recover in their rate bases if the PUC determines that such proposals are prudent. A similar provision in California has resulted in that state’s PUC approving $67 million in utility spending on 5,000 electric vehicle charging stations. At the same time, the California PUC rejected a $654 million proposal to build another 25,000 stations. Clearly, the amount of charging infrastructure development that would occur in Oregon under the bill will depend on the PUC’s actions related to utility electrification proposals.

According to the parties that negotiated the proposed bill, the transportation electrification provision of the proposed bill would be an incremental step in helping Oregon develop electric vehicle charging infrastructure. I agree. Depending upon how the PUC would view the prudency of utility proposals, it may be a pretty small incremental step. To ensure a more robust transformation, Oregon should build on work already proposed in the state’s “Energizing Oregon” roadmap that includes a comprehensive and organized strategy to advance the electric vehicle market in Oregon.