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Wednesday, May 23, 2007

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PUBLIUS

A) The bill is unnecessary given Oregon’s low-carbon energy supply system (B) it interferes with the existing green power marketing programs which are voluntary; and (C) SB 838 imposes high costs on ratepayers with no offsetting benefits.

The practical effect of SB 838 is to prohibit the development of any more
energy sources utilizing fossil fuels, thereby establishing a carbon cartel. The
primary effect (if not the purpose) of any cartel is to raise the price of the
rationed commodity above its market value. There is no moral or economic
justification for placing such burdens on Oregon’s electricity ratepayers.

Yes, a great day for the future of Oregon.

JMG

Could we trouble you for the terms of the deal? That is, what was actually passed? Is it the strong 25% by '25, or did some additional exemptions get added like the electric coops were fighting for?

JMG

Publius--40% of Oregon's electricity is from coal, not too far below the national average of 50%. Further, we have no additional hydro capacity, so your choices for future demand growth are coal, nukes, or renewables.

While I personally would be delighted to cap total supply and then begin ratcheting it down (reach the 25% target by reducing the total, as it were), I don't think many people would sign up for that. OK, so if it's new power, then it better be renewable.

As for "no benefits," that's just nonsense--in addition to the rate stability provided by a fuel-less electric source, there's also that little climate change problem and the salmonid extinction problem -- nothing to sneeze at, in other words.

Jeff Bissonnette, Citizens' Utility Board of Oregon

Greetings,

CUB was one of the main supporters of SB 838. I would like to offer a couple of follow-up points to the above comments:

1) JMG has it right in saying that Oregon and the NW is very dependent on coal. SB 838 will help to focus new resource development on renewable resources, thus cleaning up our resource mix.

2) SB 838 in no way interferes with the existing green energy programs. In fact, the bill requires all utilities - not just PGE and Pacific Power - to offer these programs. While the bill is very aggressive in requiring 25% of energy to come from renewable resources by 2025, there are customers (like me) who will not be satisfied with only a portion of their power coming from cleaner sources. They will still be able to participate in a renewable energy program.

3) There is no evidence that rates will be raised because of the creation of a Renewable Energy Standard as SB 838 does. In the 23 other states that have adopted an RES, the experience has been that rates have fluctuated between a 1% increase and a 1% decrease in rates. Also, SB 838 has a wide range of protections that keeps costs in check while still reorienting utilities in a new direction for utilities.

4) There are three tiers of the standard. The top tier is 25% renewables by 2025, will be met by utilities that serve more than 3% of the state's energy load. The middle tier, made up of utilities serving 1.5 - 3% of the state's energy load will be required to meet a 10% by 2025 standard. The last tier, targetted at utilities serving less than 1.5% of state load, will meet a 5% by 2025 standard. If any utility becomes an owner of a coal generating plant, they will be subject to the top 25% by 2025 standard. So, in short, all utilities are required to do something under the bill and about 80% of the state's load is subject to the 25% by 2025 standard.

5) In terms of the bill "prohibit(ing) the development of any more energy sources utilizing fossil fuels," that is just utter hyperbole. To be sure, the policy is to have most new future generation met by renewable resources (and continued energy efficiency) but the fact is that we are talking about a quarter of the state's energy load being met by renewable energy (and that is big) so fossil fuel resources, particularly natural gas, aren't going away any time soon. But we will be better off the less we rely on those resources, hence the value of SB 838, to help us focus on cleaner resources as we move forward.

6) Lastly, for a full summary of the bill, you can go to www.poweringoregonsfuture.org for a ton of info. Under the teb "Get the Facts," you can find a summary. The only bullet point that is not right on that sheet is the one that describes a two-tier standard rather than the three-tier standard I outlined previously. The third tier was just added last week and we didn't get a chance to update the fact sheet in the last push to pass the bill.

Hope that's helpful.

Jeff

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