Cleantech Market Intelligence
Oregon State Energy Policy Leadership Back on Display
Oregon has a long history of innovative firsts across the social, political, and business spectrum with regard to energy. Below are some notable examples of Oregon energy state policy leadership:
- In 1919, Oregon became the first state to initiate a gas tax, and the rest of the country followed its example in repairing roads. Now rolling out a trial pay-as-you-drive tax called OReGO, the state is incentivizing its citizens to drive less. In 2011, per capita use of gasoline in Oregon fell to its lowest level since 1962.
- Oregon was the first West Coast state to pilot a floating offshore wind farm in Coos Bay.
- The state is home to Shepherds Flat, one of the largest wind farms in the world at 845 MW. Shepherds Flat has more than 300 2.5 MW General Electric (GE) wind turbines.
- Portland was the first U.S. city to adopt a climate change plan, called the Global Warming Reduction Strategy. In 2010, Oregon hit its 2010 emissions target.
- In 2007, the state legislature passed numerous pieces of clean-energy legislation in electricity, biofuels, and other sectors that led to the arrival of Vestas, Iberdrola, SolarWorld, and other industry leaders.
- Oregon’s only coal plant, Boardman, is expected to be converted to biomass by 2020.
However, since the financial crisis and amid challenging market conditions both locally and globally, there have been lulls in legislation and activity that previously gave Oregon its credibility in the energy sector.
There are two new initiatives facing voters in the coming ballot cycle. Initiative Petition 63 aims to increase the state’s renewable portfolio standard from 25% by 2025 to 50% by 2040, which would make it one of the top five most aggressive among U.S. states and territories. The initiative would also ban coal electricity imports, which, when combined with the planned phaseout of coal generation in the state, would make the state coal-free by 2030. Initiative Petition 64 is similar, but it also ties these results to executive compensation, which is the first approach that I have seen tied to energy policy, anywhere.
Initiative Petition 64
(Source: Oregon Initiative Petition 64)
To be sure, many other aggressive state-level efforts have seen strong innovation on the policy front and have enjoyed various levels of success. One differentiating factor that makes Oregon particularly unique on the local implementation front, however, is the massive hydroelectric system in the Columbia River Gorge. This system provides about half of the state’s power (and does so cheaply), and has been somewhat of a barrier to the larger uptake of non-hydro renewables at the residential, commercial, and industrial levels.
Voters have consistently voted with their dollars, and Oregon is home to one of the highest percentages of green power program subscribers—where customers pay approximately 10% more on their electric bills in order to support renewable energy projects in the state. Similarly, polls associated with these new ballot initiatives found that 71% of Oregonians supported the bills, and that 58% said they supported the proposal even if it would increase their energy bill. This flies in the face of conventional wisdom that voters are unwilling to put their money where their mouth is, and is instead representative of most of the state’s population. The positive economic impacts of wind and biomass power in rural areas has led to progressive energy legislation being passed.
Many groups outside of Oregon will be watching closely to see if these initiatives pass, and this underscores not only the importance of policy to keep the state on the front lines of statewide energy policy, but also its potential for the rest of the United States.