Tag: PGE

Oregon ratepayers need relief. Ending the Public Purpose Charge can help-cm

Oregon ratepayers need relief. Ending the Public Purpose Charge can help.

By Rachel Dawson

As government-imposed shutdowns continue, more Oregonians are struggling to pay their electricity bills. Portland General Electric reported in June that arrears (when payment is 31 days past due or more) were up 41% compared to the same time last year. Economic hardship likely will persist for many people long after the COVID-19 vaccine is distributed.

It’s clear that Oregon ratepayers need relief. One way for legislators to provide such relief would be to eliminate the Public Purpose Charge (PPC) energy tax, or to allow Oregonians to opt out of it.

This 3% tax has been paid by PGE and PacifiCorp ratepayers since 2002. It was originally intended to last 10 years to help fund energy conservation and to subsidize the renewable energy industry until it became market competitive. The PPC has since been extended to 2026.

A recent Cascade Policy Institute report found the PPC’s ten-year mission has been met and recommends the tax should not be further extended. Just as intended, the most cost-effective programs were completed in the early years of the tax, leading to a 73% increase in costs per unit of energy saved. The cost of installing solar has decreased 76% between 1999 and 2019. Thus, it appears the solar industry no longer needs PPC subsidies to be market competitive.

Ending the PPC is long overdue. And doing this during a recession would be a great way to immediately aid many struggling Oregonians.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research center.

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The Boardman Coal Plant Closed. Now What-cm

The Boardman Coal Plant Closed. Now What?

By Rachel Dawson

On Thursday, October 15, Portland General Electric pulled the plug on the Boardman Coal Plant, PGE’s largest power plant. Boardman had a nameplate capacity of 550 firm megawatts of power and was decommissioned 20 years prematurely.

While environmentalists celebrate the plant’s closure, utility executives are still trying to figure out how they will keep the lights on in our region.

That’s because the more coal plants our region removes from the grid, the more likely we are to experience future blackouts. Multiple studies from groups like the Northwest Power Pool, E3, and the Northwest Power and Conservation Council all reached the same conclusion: Our region will have a shortage of power by the mid-2020s that could lead to blackouts and extreme price volatility.

Curious about what this would look like? Look no further than California. In August, the state experienced rolling blackouts as it leaned too heavily on imports and didn’t have enough of its own firm power.

Our utilities aren’t far behind. Large Northwest utilities plan on investing in wind, solar, batteries, and—like California—market purchases. To avoid California’s same fate, our utilities and officials need to acknowledge that an intermittent resource powered grid is not a reliable or an affordable grid. Instead of celebrating Boardman’s closure, they should invest in firm power sources like natural gas and clean nuclear power.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research center.

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Cascade Policy Institute Responds to the Early Closure of the Boardman Coal Plant-cm

Cascade Policy Institute Responds to the Early Closure of the Boardman Coal Plant

October 19, 2020

FOR IMMEDIATE RELEASE

Media Contact:

Rachel Dawson

(503) 242-0900

rachel@cascadepolicy.org

PORTLAND, Ore. – At 11:56 am on Thursday, October 15, Portland General Electric (PGE) pulled the plug on the Boardman Coal Plant, PGE’s largest power plant. Boardman had a nameplate capacity of 550 firm megawatts of power and was decommissioned 20 years prematurely.

While environmentalists celebrate the plant’s closure, utility executives are still trying to figure out how they will keep the lights on in our region.

That’s because the more coal plants our region removes from the grid, the more likely we are to experience future blackouts. The Northwest Power and Conservation Council is tasked with running models to determine whether there is enough electricity supply to meet demand in the future during a “worst case scenario.” The Council considers the supply adequate if the Loss of Load Probability (LOLP) is 5% or less. In late 2019, the Council found the LOLP by 2026 to be 26%. This means that more than one out of every four simulations run by the Council shows the region facing a shortage of electricity.

To put that percentage into perspective, the LOLP during the 2001 energy crisis was predicted by the Council to be 24%. During this crisis, the Pacific Northwest experienced a prolonged drought that resulted in the loss of 4,000 megawatts of hydropower compared to the average year. To balance the grid, Bonneville Power Administration took back electricity previously sold to the aluminum industry, effectively putting 5,000 aluminum employees out of work.

Since natural gas emits 60% fewer emissions than coal, it would make sense to replace a firm baseload resource with another, cleaner firm resource. However, that’s not what PGE and PacifiCorp plan on doing. Both Investor Owned Utilities (IOUs) plan on replacing lost coal plant megawatts with market purchases, wind, solar, and batteries.

While other utilities have succumbed to criticisms of any and all fossil fuels, the Benton Public Utility District released a report calling out its peers for engaging in virtue signaling and not taking steps to protect the electrical grid. Benton says what others are afraid to: Investing only in wind, solar, and batteries won’t work. For example, Benton found that wind output during the coldest night will only reach around 7%, which won’t provide sufficient electricity when people need to heat their homes. Instead, Benton PUD recommends using natural gas as a transition fuel to nuclear power.

The recent California blackouts should prompt officials to hit pause on their plans to overhaul the electrical grid with intermittent wind and solar resources. Officials charged with managing the California grid admitted the blackouts were due to poor planning. California leaned too heavily on imports and didn’t have enough of its own firm power. Between 2014 and 2018, California reduced natural gas consumption by 21% while increasing renewable energy capacity by 54%. When the sun went down and the wind stopped blowing during the August heatwave, it was clear the ever-decreasing portfolio of firm power wouldn’t make the cut.


Cascade Policy Institute policy analyst Rachel Dawson says, “As more Oregonians work and learn online, it’s critical we take actions that avoid devastating blackouts. Officials know we have a problem; and utilities know that with current technology, intermittent resources alone can’t solve it. Now is the time for them to reverse course and protect the reliability and affordability of the grid.”

To avoid California’s fate, Oregon utilities and officials need to acknowledge that an intermittent resource powered grid is not a reliable or an affordable grid. Instead of celebrating Boardman’s closure, they should take a page from Benton PUD’s book and invest in natural gas and nuclear power.


Contact Rachel Dawson by email at rachel@cascadepolicy.org for more information or to schedule an interview. 

About Cascade Policy Institute: 

Founded in 1991, Cascade Policy Institute is Oregon’s free-market public policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

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Small Modular Reactors Are Not the 20th-Century Nuclear Plants We’re Familiar With

By Rachel Dawson

Oregon, it’s about time we talk about nuclear power.

No, I don’t mean major reactors like PGE’s decommissioned Trojan Nuclear Plant which shuttered in 1992. Rather, I’m talking about small modular reactors (SMRs) which are experiencing rapid development and receiving great international interest.

Countries around the world, such as Russia and Canada, are currently exploring this technology. The U.S. Nuclear Regulatory Commission has completed its first SMR certification review for a company called NuScale Power, which expects final approval by 2020. As it so happens, NuScale is headquartered right here in Portland.

NuScale is developing a new type of nuclear reactor that it claims is safer, smaller, and more affordable than traditional nuclear reactors.

NuScale’s major advancement is related to the circulation of water for the reactor’s safety system. Traditional nuclear reactors circulate water by using electricity. NuScale SMRs use natural circulation and thus don’t rely on power to cool the reactor down. According to a NuScale representative, the Fukushima nuclear disaster could never happen with an SMR. In Fukushima, the plant lost power to its safety system during an earthquake and tsunami, which caused the plant to melt down. SMRs can cool themselves without any intervention in the case of a major natural disaster.

SMRs are significantly smaller than traditional nuclear reactors. Because of this, the modules can be produced in a factory and shipped onsite. Doing so allows costs to come down and ensures that quality control is more evenly managed.

SMRs also have a unique business model. Instead of operating a single large reactor, SMR plants will consist of a single or multiple smaller modules. This allows for flexible operation, and a region can add more modules as its population grows.

NuScale expects its first SMR to come online in Idaho Falls in 2026. The line item estimates for the first NuScale plant will be approximately $65 per MWh, though a NuScale representative stated that costs are expected to come down with increased production. This initial cost places SMRs within the estimated cost range of a gas combined cycle plant according to Lazard’s Levelized Cost of Energy Analysis.

Though SMRs are carbon free, they aren’t considered to be a substitute for other renewable resources, such as solar or wind, by their developers. Rather, NuScale has emphasized that SMRs are competing against natural gas as a baseload power that will keep the grid reliable during times when the sun isn’t shining, or the wind isn’t blowing.

Of course, there’s the issue of what to do with nuclear waste produced by the reactors. The most efficient way to deal with nuclear waste is to recycle it. NuScale has more modern recycling technology than France (where nuclear power accounts for 72% of total electricity production and nuclear waste is recycled), but NuScale cannot take any action as it’s currently illegal to recycle nuclear waste in the United States. In lieu of recycling, NuScale plans to create onsite storage for nuclear waste, though disposal is left up to utilities.

Unfortunately, NuScale is not able to construct an SMR plant in Oregon even though the company is located here. Oregon passed a moratorium in 1980 that effectively banned the construction of any new nuclear plants in the state.

Wind and solar plants are not currently able to power the grid by themselves given their intermittency, and battery technology is not developed enough to be implemented at utility scale. The grid needs some kind of baseload power that is capable of backing up renewables when they fail to produce power. Right now, that role is being filled by natural gas and coal plants. If Oregon officials are serious about operating the grid with 100% renewable power, they need to bring SMRs into the discussion. Otherwise the reliability—and affordability—of the grid could be at stake.

Rachel Dawson is a Policy Analyst at the Portland-based Cascade Policy Institute, Oregon’s free market public policy research organization. She can be reached at rachel@cascadepolicy.org.

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Think TriMet’s New Electric Buses Run on Wind Power? Think Again.

By Rachel Dawson

TriMet unveiled five new battery-electric buses (BEBs) in April 2019, the sides of which all donned images of windmills and sweeping gusts of wind. The BEBs each cost around $1 million, nearly twice as much as a traditional diesel bus. And these buses are just the beginning: The TriMet board voted last year to replace the entire fleet with battery-electric buses for $1.18 billion by 2040, a $500 million premium over a diesel fleet.

TriMet has been hailed an environmental hero for “riding the winds of change.” TriMet Spokesperson Roberta Altstadt claimed that TriMet was the first in the United States to “operate an electric bus on 100% renewable energy.” Without further research, it would be easy to think that TriMet’s new buses ran on clean wind energy. And that is exactly what TriMet is hoping you would think. But you would be wrong.

If the buses don’t run on 100% wind power, how is TriMet able to get away with saying they do?

TriMet spends $228.75 per month on what are known as renewable energy certificates (RECs) from PGE. RECs are a tradable commodity sold by renewable energy facilities (such as wind farms) to the wholesale market, that purport to represent the “environmental amenities” of certain renewable energy projects. By purchasing the RECs, TriMet has bought the legal right to claim it is using renewable energy; however, the agency has not purchased any energy itself.

This would be like my paying someone else to exercise at the gym for me, and then telling my family and friends I go to the gym. The person I pay reaps both financial and physical benefits while I merely get to pretend I have them.

Supporters of RECs claim the certificates offset fossil fuels and pay for the generation of new renewable energy. However, these claims are not entirely accurate. According to Daniel Press, a Professor of Environmental Studies at UC Santa Cruz, “RECs do little to reduce emissions in the real world because they have become too cheap to shift energy markets or incentivize businesses to build new turbines.” The income generated from RECs does not come close to the millions needed to construct more wind turbines, which means that RECs themselves don’t offset fossil fuels.

Despite its claims, it would be impossible for TriMet to run on 100% wind power unless it disconnected from the regional mixed grid and hooked up to its own personal wind farm. Even then, TriMet would be forced to rely on other backup power sources due to the volatility of wind generation.

While a wind turbine may be available to produce energy around 90% of the time, the average wind farm in the United States in 2018 had a capacity factor of only 37.4%. The capacity factor refers to the amount of energy produced in a year as a fraction of the farm’s maximum capacity. Wind farms produce electricity when winds reach about nine miles per hour and stop at roughly 55 mph to prevent equipment damage. If the wind isn’t blowing (or isn’t blowing strongly enough), little to no power can be generated.

This poses problems, as the electrical grid requires constant equilibrium or blackouts will result—power supply must meet energy demand. Every megawatt of wind power has to be backed up by an equal amount of traditional, “non-green” sources like coal and natural gas to account for times when wind energy isn’t generated. This would be like keeping a car constantly running at home in case the one you’re driving on the road fails.

Instead of a wind farm, TriMet receives its electricity from Portland General Electric, the same mixed grid your home is likely powered by. In 2020, this mixed grid will be made up of 37% natural gas, 28% coal, 18% hydro, 15% renewables, and 2% purchased power (power purchased on the wholesale market). Since wind only makes up a portion of renewables used by PGE, less than 15% of the electricity used by the “wind” buses is powered by wind. A greater percentage of the electricity used by TriMet’s BEBs comes from coal plants than wind farms.

If TriMet were honest with its riders, it would replace the windmills on the sides of the new buses with coal, natural gas, and hydroelectric power plants. In the name of accuracy, TriMet could place a windmill in the corner, demonstrating the small percentage of power generated by wind farms.

So instead of riding the “winds of change,” keep in mind that you’re just riding a really expensive bus.

Rachel Dawson is a Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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