Advocates want more local choice in electricity

New legislation could offer local choice in electricity.

A legislative effort is forming to allow communities in Oregon to buy their own electricity separate from investor-funded utilities like PacifiCorp.

The Community Renewable Energy Association is an Oregon group focused on increasing green energy sources as a means of economic development in a more competitive energy market. The group is drafting legislation that would allow for community choice aggregation, a concept where local governments can choose where to buy and generate electricity for customers within their region.

“We believe in the ability for communities to determine what’s the best power supply portfolio to best serve their communities,” said Brian Skeahan, director of the energy association and a former public utility district manager in Washington state.

Under community choice aggregation, aggregators pay exit fees to utilities to make up for the loss of customers. Existing utilities continue to deliver power, maintain the electrical grid and provide billing and other services.

Massachusetts, New York, New Jersey, Rhode Island, Ohio, Illinois, California and most recently Virginia have so far passed community choice legislation to lower power rates and expand their renewable energy portfolio.

Much of the push behind community choice aggregation is to develop greener energy sources. Pacific Power, which provides electricity to most of Clatsop County, generates nearly 62 percent of its energy from coal, along with 15.4 percent from natural gas, 7.1 percent from wind, 5.2 percent from hydropower, 0.4 percent from biomass and less than 0.1 percent from solar. Oregon’s Renewable Portfolio Standard calls for 50 percent of energy from renewables by 2040.

Skeahan argues that local choice would also allow for more local generation and storage projects that can help increase resiliency in the wake of a large earthquake damaging utility infrastructure. The association also feels like investor-owned utilities have unreasonably pushed back against smaller, community based power resources, he said. “PacifiCorp, in particular, seems to be pretty focused on developing resources in states other than Oregon.”

The majority of Pacific Power’s coal and natural gas facilities, along with the majority of sales, are in the Mountain West region. The utility’s hydropower and renewable generation is predominately in Oregon and Washington.

Skeahan expects to have a draft of the proposed bill by the end of the month.

“We think there will be sponsors,” he said. “Those conversations are already beginning.”

Skeahan and others advocating for the legislation expect pushback from utilities like PacifiCorp and Portland General Electric. NV Energy, a utility company controlled by billionaire Warren Buffett’s Berkshire Hathaway Energy Co. which provides the majority of Nevada’s electricity, has threatened to pull out of the state if the energy choice legislation passes. PacifiCorp is also a subsidiary of Buffett’s Berkshire Hathaway Energy Co.

Bob Gravely, a spokesman for PacifiCorp, said the utility needs to know more about what advocates are proposing in Oregon. He cautioned, though, that customers going with community choice aggregation could lose energy efficiency initiatives through the Energy Trust of Oregon, and that the new aggregators would not be able to tap into the federal Bonneville Power Administration like other utilities and districts.

The Local Energy Aggregation Network, a nonprofit focused on expanding community choice aggregation nationwide, is assisting in the campaign to begin legislation in Oregon. Shawn Marshall, the executive director of the network, helped found California electricity buyer Marin Clean Energy, covering an area north of San Francisco that split from Pacific Gas & Electric. Around 2 million customers in California are part of a government-affiliated aggregator.

“For California programs, all CCAs have offered rates that are below the incumbent utility,” she said. “Marin Clean Energy has been going eight years. They’ve been able to keep rates below PG&E 75 percent of the time.”

Whether aggregators are less expensive has been largely dependent on the exit fees they pay to utilities for lost customers. Marin Clean Energy customers now pay PG&E an exit fee equal to 3 cents per kilowatt hour of energy. Utilities in California have argued the exit fees are too low, while aggregators have argued they are too onerous.

“In all cases, the utility and the remaining bundled customers have been kept whole,” Marshall said.

Alan Hickenbottom, the energy network’s project manager in Oregon, said exit fees will be as controversial as a community choice aggregation bill itself, but that those issues are being worked out in other states.

“This is not an anti-utility effort. This is not anti-PacifiCorp, anti-PG&E,” he said. “For me, it’s much more about the realignment of the regulatory environment to reflect today’s reality, in both technology and what people want and what they need.”

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