Governor pushes sustainability plans; Some say bills could lead to jobs, money

•

cap carbon dioxide emissions and create a system where clean utilities, such as solar plants, could sell unused emissions credits to facilities that emit more pollution;

•

establish a ceiling for emissions from new power plants, effectively prohibiting construction of new coal-burning facilities; and

•

create a global warming commission and possibly a center for studying climate change.

The governor is working with the chairs of the Legislature's energy committees -- Rep. Jackie Dingfelder, a Portland Democrat, and Sen. Brad Avakian, a Washington County Democrat -- to have joint hearings on the bills as early as April.

"This is the most ambitious environmental session in 30 years and the most important environmental session in 30 years," Dingfelder said.

Each of the bills could change before introduction. With the legislative session nearing its midpoint, however, some worry there's not enough time left to pass the measures.

"The question is whether the timing's right to get any or all through this session," said Dave Van't Hof, the governor's sustainability and renewable energy policy adviser. "We'll definitely have a hearing. There's a good chance some will move this session."

Before legislators consider the new bills, the governor wants them to pass several proposals already under consideration. Of those, tax incentives for biofuel facilities and residential and commercial renewable energy projects have passed the House by a wide margin.

The centerpiece of the governor's agenda -- a mandate that utilities get 25 percent of their power from renewable sources by 2025 -- remains in the Senate Environment and Natural Resources Committee.

A wide range of groups supported the measure in early testimony, saying it would steer large investments to the state because it would create a market for renewable power.

"It's very clear that a portfolio standard creates a market for renewable power," said Secretary of State Bill Bradbury. "Capital investment follows that standard."

Only 3 percent of the state's energy comes from wind and biomass, according to the Oregon Department of Energy. Existing hydropower, which would not be counted toward the 25 percent goal, supplies 43 percent. Coal energy provides 42 percent.

Several potential investors are ready to make investments in Oregon.

•

Germany-based Solarworld AG already announced it would spend $400 million on a manufacturing facility in Hillsboro.

•

GroSolar, a White River Junction, Vt.-based company wants to build utility-scale solar plants in Eastern Oregon, according to Alan Hickenbottom, the director of the company's Northwest region. "They really start to pencil" if the Legislature passes the tax incentives and the renewable portfolio standard, he said.

•

Kevin Lynch, the local director of policy and regulation for Scottish company PPM Energy, testified in support of the renewable portfolio standard, saying it would encourage the company to make more investment in Oregon. The company has already invested $500 million in wind projects here.

•

The San Francisco-based venture firm Nth Power, which has a Portland office, wants to steer some of its $400 million under management to projects in Oregon.

•

A new angel investment fund, Oregon Sustainability Angels, wants to get renewable energy projects off the ground. Brad Zenger, who helped found Tualatin-based Pixelworks Inc., is pulling the organization together.

•

With the backing of a large, undisclosed private equity fund, Jacob Susman, a founding member of Goldman Sachs' alternative energy investing group, started New York-based OwnEnergy LLC in February. The company is setting up financing for renewable energy projects across the country and plans to target the Northwest within the year.

•

On a smaller scale, San Francisco-based MMA Renewable Ventures, a third-party financier of renewable energy assets, now has a one-person Portland staff and would like to make more investments in local projects, such as rooftop solar units.

Yet while investors have testified in favor of a renewable portfolio standard, utilities and the state's largest power consumers approach the measure with varying degrees of caution, saying it could have a negative effect on electricity costs.

"We have a very delicate balance we have to strike here," said Scott Bolton, a lobbyist for Portland-based PacifiCorp, the state's second-largest utility. "We want to make sure we're not burdened with unreasonable cost or risk."

The group could support the bill as early as this week if legislators add more safeguards to protect consumers. Portland General Electric, the state's largest utility, also plans to support the bill.

The state's largest power customers could be a tougher sell. They worry the bill will make the renewable power industry a seller's market.

"We support cost-effective renewables," said Michael Early, executive director of the Industrial Customers of Northwest Utilities, which represents the state's largest consumers of power. "We're already seeing significant additions of renewables by PGE and PacifiCorp. Given that, there's no need for mandates that would drive up prices."

Oregon would be the 24th state to have a renewable portfolio standard. Experts differ on what effect the standards are having on prices. Some argue they lead to price reductions as more companies enter the market and competition increases. Others say nobody knows.

The most exhaustive report on the subject concludes the cost impacts are likely minimal. The report from the Lawrence Berkeley National Laboratory examined 28 cost projections nationwide. Of those, 19 predicted no more than a 1 percent cost increase. Another six forecast a cost decrease.

Only two said costs would increase more than 5 percent.