Oregon Commission Hesitant to Approve Rushed RFP Processes

The Oregon Public Utility Commission (Commission) declined to approve both PacifiCorp and Portland General Electric (PGE) explored their options for acquiring new renewable resources. The utilities proposed expedited request for proposals (RFP) to take full advantage of the federal production tax credit (PTC), before it begins stepping down in 2017, to help meet the new renewable portfolio standards implemented by SB 1547. Neither utility will acquire new renewable resources at this time.  

PacifiCorp issued a renewable RFP calling for assets larger than 3 MW and without a size limit, which it argued allowed it to side-step the Commission’s competitive bidding rules. Although the Commissioners expressed displeasure for the way PacifiCorp preceded, they were reluctant to thwart the utility’s ability to take full advantage of the PTC. Instead, the Commission reminded PacifiCorp that it maintained the burden to show that any resources acquired through its RFPs were prudent and promised to carefully scrutinize any future cost-recovery filings.

PacifiCorp proceeded with its expedited RFP, but ultimately decided not to acquire any new renewable resources. Instead, PacifiCorp decided to purchase renewable energy certificates, and continue to monitor the market. PacifiCorp may enter into bi-lateral contracts or issue new RFPs in the near future.

PGE had also issued a rushed 2016 RFP and requested the Commission waive its competitive bidding rules, so that PGE could capture the full PTC benefits. Unlike PacifiCorp’s approach, the Commission described PGE’s request as “a nod” to its competitive bidding rules, but was reluctant to allow PGE to move forward. Instead, the Commission directed the utility to work directly with shareholders to come up with a mutually agreeable process. After those discussions failed, PGE filed a revised RFP and again sought the Commission’s approval. Ultimately the Commission declined to take any action on PGE’s request and suggested that PGE proceed with an RFP without approval, as PacifiCorp did.

PGE previously informed Wall Street that it would not proceed with an RFP without Commission approval because of the risk of cost recovery disallowance. PGE has since announced that it has delayed its RFP process indefinitely, and that it may proceed with an RFP, potentially in 2018.

 

Disclaimer
These materials are intended to as informational and are not to be considered legal advice or legal opinion, nor do they create a lawyer-client relationship. Information included about previous case results does not assure a similar future result.