On May 19, 2020, the Oregon Public Utility Commission (Oregon Commission) approved, in principle, a proposed tariff for allocating community solar program (CSP) costs across Portland General Electric Company’s (PGE’s) customer classes. In a public settlement agreement, with the Oregon Commission’s approval of its tariff, PGE agreed to allow solar projects that were parties to the settlement agreement to terminate each project’s pre-existing power purchase agreement (PPA) if so requested within 90 days of the Commission order and to sell their power in the CSP.
The CSP allows customers of PGE, Pacific Power, and Idaho Power to purchase (or “subscribe ” to) a portion of a community solar project and receive a credit on their monthly utility bill for the electricity generated from their share of the project. Only a limited number of projects would be eligible to participate in the CSP and directly market their electricity to Oregon consumers. For projects located in PGE’s service territory, the vast majority had previously entered into PPAs with PGE with the expectation that, if they were selected in the CSP, then they could terminate the pre-existing PPAs.
PGE disagrees that CSP projects can unilaterally terminate their PPAs, but ultimately, PGE reached an agreement with the CSP developers to allow termination of the pre-existing PPAs for a limited period of time that expires in August 2020, if the Oregon Commission approved a tariff that would change which customers must pay for CSP costs and how customers would be billed for them. PGE and CSP developers believed that their agreement would assist the development of a functioning and equitable CSP in Oregon.
Through this tariff filing, PGE sought the Oregon Commission’s approval to bill long-term and new load direct access customers for any costs related to the CSP. (Direct access customers are those PGE customers who receive distribution service from PGE but procure power directly from non-PGE entities.) There are both “start-up costs” that will not be incurred in the future, and “ongoing costs” related to the continued operation of the CSP program. PGE sought the Oregon Commission’s approval to bill long-term and new load direct access customers, like other customers, for both the prospective start-up costs incurred, without changing amortization prior to the allocation modification, as the CSP launches and the future ongoing costs. In addition, PGE proposed a new methodology for calculating long-term and new load direct access customer bills. The Oregon Commission approved PGE’s request to bill long-term and new load direct access customers for start-up costs and for ongoing costs. The Oregon Commission also approved PGE’s proposed methodology for calculating bills specifically for the start-up costs; however, the Oregon Commission declined to approve the methodology for ongoing costs, finding that further process is appropriate for examining that methodology. The Oregon Commission issued a written order documenting its decision, which is available at this link.
The CSP solar developers did not take a position on PGE’s proposed tariff but filed letters of support for the Commission and PGE to consider the responsibility of program costs. The developers stated that they believed that the CSP furthers decarbonization of energy supply in Oregon and provides a public benefit and a public good that benefits all customers.
Sanger Law represented the Renewable Energy Coalition and its member CSP solar developers in reaching the settlement regarding PPA termination.
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.
