Oregon Commission Requires PacifiCorp to Purchase Renewable Power from Large Independently Owned Generators

On April 19, 2018, the Oregon Public Utility Commission (Oregon PUC) rejected PacifiCorp’s proposed methodology for setting the avoided cost rates for larger qualifying facilities (QF), and required PacifiCorp to use a methodology that is more favorable to renewable QFs.  

QFs are independently owned (non-utility) renewable energy facilities under 80 megawatts and cogeneration facilities that have a right under the Public Utility Regulatory Policies Act (PURPA) to sell power to utilities. The Oregon Commission approves the methodologies under which the investor owned utilities calculate the prices paid to QFs. Each of the three utilities have different prices depending the size and resource technology. In addition, Portland General Electric Company (PGE) and PacifiCorp have historically been required to offer a renewable price depending on whether the power is “green” or “brown”. Specifically, the utilities must pay a “renewable” price for QFs selling power and their renewable energy certificates, and a “non-renewable price” for QFs only selling power (and keeping their renewable energy certificates or those that do not produce them).

In May 2016, the Oregon Commission allowed PacifiCorp (but not PGE) to stop offering a renewable rate to solar QFs above 3 MWs and all other QFs above 10 megawatts. The Oregon Commission staff and renewable energy advocates strongly opposed PacifiCorp’s proposal. A new proceeding was opened to determine: 1) whether PacifiCorp’s larger avoided cost pricing should include a renewable price option; and if so; 2) how that renewable price option should be calculated? While the Oregon Commission stated that the investigation should be “expedited”, it took two years to issue a final order. This is typical for an “expedited” Oregon Commission proceeding, which is unable to timely process many cases, especially those related to PURPA.

Renewable energy advocates, including the Renewable Energy Coalition, Community Renewable Energy Association and Renewable Northwest proposed that PacifiCorp offer a renewable price option and supported methodologies that would allow all renewable energy generators to sell renewable power to PacifiCorp. PacifiCorp agreed that it should be required to purchase renewable energy from cerain renewable QFs, but proposed a methodology that would limit the ability of most renewable technologies to sell their power.

The Oregon Commission ultimately concluded that PacifiCorp should offer a renewable price option, but returned to its pre-May 2016 methodology. Thus, after temporarily removing the large renewable rate and requiring a wide range of parties spent considerable legal and consulting resources, the Commission ultimately decided to make no substantive changes. The Commission’s order, however, indicated that it might re-open the investigation into the future, and again require all the parties to litigate the same issues once again. During this two year investigation, larger Oregon QFs were effectively prevented from selling power to PacifiCorp.

 

 

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.