Oregon’s Power Grid 101

Have you ever wondered how the energy to cook meals, turn on your lights, or watch TV gets to you? Though we rarely think about it, the answer is the power grid, a vast system that fuels our modern way of life.

What is the power grid?
The grid has been called the greatest machine in the world, “comprising eleven thousand power plants, three thousand utilities, and more than two million miles of power lines,” according to the Council on Foreign Relations.

The power grid is a complex and expansive network designed to generate, transport, and deliver electricity into your home or office. The energy generated by the grid powers everything from industrial factories and skyscrapers to your alarm clock or computer.

The grid must also constantly balance the energy demand from customers with a supply of electricity from different energy sources. If the amount of energy fed into the grid does not equal the amount of energy consumed by customers, the result is power outages and blackouts.

How does the grid work?
The grid comprises three main parts that work together to generate and transport electricity from a power plant into your home or office. Those parts are electricity generation, transmission, and distribution.

Electricity Generation
Electricity is produced in power plants by using a turbine to convert fuel into electrical energy. Energy is harnessed from fuel sources such as coal, natural gas, nuclear, wind, or solar. Power plants produce significant electricity and are usually located far from where the energy is used in towns, cities, and homes.

Transmission
Have you ever wondered why power lines crisscross the US? The answer is electrical transmission. After electricity is generated at power plants, power lines transport it over long distances. Electricity is then passed through transformers and substations to be distributed to the areas where customers will use it. Energy sent through high-voltage transmission lines is sent at a higher voltage than local distribution networks through a process known as “stepping up” to prevent losing energy over long distances.

Distribution
Lastly, electricity is passed through facilities known as substations before it is distributed directly to your home and workplace. These substations include a process that reduces the electrical voltage to safe levels for customer usage, known as “stepping down.” The now ready-to-use electricity travels over much shorter distances through the power lines you see near your home.

Oregon Fuel Sources
The grid needs electrical energy to operate. As we know, electricity is generated by converting fuel into electrical energy at power plants. The fuel used in Oregon power plants comes from diverse fuel sources commonly called the resource mix.

In Oregon, hydropower, coal, and natural gas (methane) make up the main fuels used to generate electricity in Oregon’s resource mix. In 2020, Oregon’s fuel mix was made up of 38.91% hydro, 26.47% coal, and 21.5% natural gas.

Renewable energy sources are increasingly becoming a larger portion of Oregon’s energy resources. In 2020, Oregon’s fuel mix comprised 7.01% wind resources, 3.47% nuclear, and a large amount of hydropower. Check out the Oregon Department of Energy Electricity Mix page for more information on how Oregon’s fuel mix has changed over time.

Oregon’s 2020 Electricity Mix

These energy mixes vary between utilities as each electricity provider chooses their fuel sources. Utilities consider cost, availability, customer usage, and more when planning their energy mix. Consumer-owned public utilities typically use more hydropower than investor-owned utilities.

Within investor-owned utilities, the resource mix changes with the intensity of fossil fuels. Pacific Power’s system was almost 50% coal and 19% natural gas in 2020. By contrast, Portland General Electric used 36% natural gas and about 12% coal. Portland General Electric’s reliance on coal decreased significantly with the closure of the Boardman coal plant in 2020.

Pacifc Power Energy Mix (Left), Portland General Electric Energy Mix (Right)

Oregon still has a long way to go to transition to clean energy fuel sources, but the state has taken significant steps toward making that a reality. In 2021, the Oregon Legislature passed the 100% Clean Electricity Bill, HB 2021. This law requires Oregon’s largest electric utilities, Portland General Electric and Pacific Power, to eliminate 80% of greenhouse gas emissions by 2030, 90% by 2035, and 100% by 2040.

Electricity Regulation 101

National Grid Regulation
While it makes sense to think of the grid as one big, interconnected machine, it’s made up of three separate power grids. These are the Western, Eastern, and Texas grids.

Oversight of the grid is the responsibility of a patchwork of federal and state regulators. The Federal Energy Regulatory Commission (FERC) is the primary authority over wholesale energy generation and transmission between states nationwide. However, state and municipal governments are responsible for regulating intrastate energy distribution, which ultimately delivers electricity to customers.

Regulating the Grid in Oregon
In Oregon, the Public Utility Commission (PUC) is responsible for regulating utility rates and services. The goal of regulating utility rates is deciding on just and reasonable rates, which relies on assessing costs, performance, and risks while balancing the interests of customers and utilities. Utility service regulation focuses on ensuring quality, reliability, and safety, among other considerations.

The PUC requires utilities to conduct integrated resource planning, in which utilities forecast their future needs to find the optimal resource mix to serve their customers. The core planning questions are:

• Does the utility have the capacity to meet future energy needs? How will that energy be produced?
• What steps can be taken to reduce energy demand?

Ultimately, the planning process seeks to find the least cost, least risk blend of energy resources to serve customers while complying with legislative requirements, such as the 100% Clean Electricity Bill. CUB’s role in these proceedings is to protect residential customer interests. For example, CUB reviews utility plans to ensure that the utilities do not pursue risky or costly resources.

Types of Utilities in Oregon
In Oregon, there are two types of utility companies, Investor-owned utilities (IOUs) and Consumer-owned utilities (COUs). The PUC has the authority to regulate IOUs, but not COUs. However, the PUC oversees the safe administration of both IOUs and COUs.  What does it mean, though, to be investor-owned or customer-owned and how are these companies regulated?

Investor-Owned Utilities
Investor-owned utilities (IOUs) are private companies that, in return for being the sole utility in their service territories, are regulated as monopolies by the PUC. Oregon’s electric IOUs are Portland General Electric (PGE), Pacific Power, and Idaho Power. Oregon’s natural gas IOUs are NW Natural, Avista, and Cascade Natural Gas.

In Oregon, an IOU’s owners are its shareholders–people who own shares of a utility company that allow them to vote on company decisions. Like other publicly traded, private companies, IOUs are legally obligated to maximize profit for their shareholders.

According to the PUC’s 2019 Oregon Utility Statistics book, Oregon’s electric IOUs provide service to approximately 74% of customers in the state. The two major electric IOUs, PGE and Pacific Power, provide most of that service. PGE serves 780,000 residential customers while Pacific Power serves 517,000 residential customers. Idaho Power serves 13,500 residential customers in Oregon. See this map of Oregon’s IOU service areas for more detail.

Consumer Owned Utilities
The rest of Oregon is served by 37 consumer-owned electric utilities (COUs), which are public entities that fall into three categories:

• Cooperatives – 19 serve 10.5% of Oregon customers, and are governed by boards elected by co-op members. Municipal Utilities – 12 serve 9.6% of Oregon customers and are governed by elected municipal officials or their appointees to municipal utility boards.
• People’s Utility Districts (PUD) – 6 serve 5.5% of Oregon customers, and are governed by boards elected by residents in the public utility district.
• The PUC does not regulate COUs, except regarding safety. Rather, elected boards and municipal officials set rates, primarily within the context of budget development.

Issues with the Grid in Oregon

Wildfires
With extreme weather events driven by climate change becoming more common, Oregon’s grid is increasingly at risk. Most grid infrastructure is built above ground due to cheaper construction costs, but above-ground power lines are more vulnerable to weather events. Downed power lines have started wildfires in Oregon, which have caused significant damage to communities.

Early this year, jurors found Pacific Power, Oregon’s second-largest electricity utility, liable for damages related to the 2020 Labor Day fires. The plaintiffs in the case claimed that Pacific Power did not turn off electricity in areas of extreme fire risk, despite multiple warnings of a strong wind storm. The judge ultimately agreed that Pacific Power was not doing enough to protect the communities they serve and now they’re on the hook for $90 million, and, depending on claims brought by others related to that fire, potentially more than $1 billion.

Since the 2020 Labor Day fires, the Oregon Legislature has passed laws requiring utilities to develop annual Wildfire Mitigation Plans. Those plans require Oregon utilities to invest in hardening their grids and preparing communities against wildfires.

In the future, we’ll likely see more safety shut-offs of local power systems as a way to prevent wildfires when the weather conditions increase the risk of wildfires. Customers and communities in fire-prone parts of the state need to prepare for a day or two without power when dry, windy weather conditions hit.

Ice storms
Similar to wildfires, extreme weather events such as ice storms are becoming more common as our climate changes. Oregon’s above-ground power lines are at increased risk of power outages because of these kinds of weather conditions.

In 2021, Oregon utility customers experienced some of the worst power outages in the country due to a catastrophic ice storm. Nearly half a million residents were without power, including many who didn’t have power for several days. While some outages may be short-lived annoyances, outages can be life-threatening for people who rely on medical equipment or if there are longer periods of extreme temperatures.

While there are many ways that you can prepare for an ice storm-related outage, having a few basic supplies and an emergency plan is a good place to start. Check out CUB’s resources on how to prepare for a power outage or learn how to be 2 weeks ready for an emergency.

Meeting climate regulation
In 2021, Oregon adopted the Climate Protection Program and passed the 100% Clean Electricity Bill. These plans require utilities to show how they will provide power without burning fossil fuels. Oregon’s two major electricity providers, Pacific Power and Portland General Electric, must run on 100% emission-free electricity by 2040.

These ambitious initiatives are aimed at significantly reducing Oregon’s greenhouse gas emissions. Oregon’s plans to reduce greenhouse gas emissions are some of the strongest in the country and will have major impacts on the state’s utilities and the power grid.

To meet climate regulations, Oregon’s power grid will need to modernize and expand transmission lines to move renewable energy from where it’s being generated to where it’s needed most. This will be a huge challenge but one that is necessary to reduce greenhouse gas emissions.

CUB will continue working with utilities and regulators to ensure that we can meet climate regulations. We will also ensure that Oregonians have affordable access to lights, heat, cooling, and transportation during this transition.

 

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