Pacific Power Strays Further Away From 100% Clean
Posted on June 20, 2024 by Charlotte Shuff and Jennifer Hill-Hart
Tags, Energy
Last year, regulators found that Pacific Power did not have a plan to meet emission reduction requirements. Now, the utility has doubled down on its faulty plan. This time, it has moved further away from meeting clean energy goals cemented in Oregon law.
As we review the updated Clean Energy Plan for Oregon’s second-largest electric utility, CUB and other advocates are pushing for improvements. Recently, CUB joined the Sierra Club, Green Energy Institute, and other advocacy groups calling for regulators to take strong action against Pacific Power.
CUB would like to extend a huge thank you to Sierra Club’s Staff Attorney, Rose Monahan, for leading the charge in addressing Pacific Power’s faulty plan. Her analysis of the updated Clean Energy Plan has brought to light deep issues of reaching clean energy targets. She also brought in many community organizations to this advocacy work. Thank you for your hard work, Rose!
Pacific Power is Required to Move to 100% Clean Electricity
In 2021, Oregon passed the 100% Clean Electricity Bill. Pacific Power and Portland General Electric (PGE) are now committed to running on 100% emission-free electricity by 2040. Oregon’s two largest electric utilities must now develop Clean Energy Plans. These plans require utilities to show how they will provide electricity without burning fossil fuels.
By law, Pacific Power must reduce emissions by 80% by 2030 (just over 5 years away). By 2035, it must reduce emissions by 90%. By 2040, all electricity serving Oregon must be 100% emissions-free. Portland General Electric must also meet these benchmarks.
Read more: Creating the Path To 100% Clean Electricity (CUB Blog)
Pacific Power’s 2023 Plan Was Rejected
Last year, CUB had some major concerns about whether Pacific Power’s plan was actually the best for Oregon’s needs. Regulators agreed and asked the company to come back in 2024 with significant changes.
Regulators, and CUB, expressed concerns with Pacific Power’s 2023 plan. The Public Utility Commission directed the utility to make improvements to its resource plan and how it assesses community benefits. The expectation was that Pacific Power would come back in 2024 with updates that address concerns about not investing enough in renewables, not assessing the risk of converting coal plants to natural gas plants, and not considering pathways to 100% clean that protect affordability.
Instead, Pacific Power has come back with an updated plan that will not meet the emissions reduction targets set out by the 100% Clean Electricity Act. The utility is set on investing less in renewable energy, doubling down on fossil fuels, and creating a situation where customers could end up paying more than necessary in the near future.
Pacific Power is Still Not on Track for 100% Clean Electricity
This spring, Pacific Power submitted an updated plan to regulators explaining which fuels it plans to use in its electricity generation, what new infrastructure it needs, and how it will meet 100% clean requirements. Pacific Power has gotten further away from cleaning up its energy system.
In fact, it is now not only presenting a plan that does not meet 2030 targets but also may not ever meet 100% clean energy requirements.
Missing All Required Deadlines to Reduce Emissions
In the 2024 updated plan, Pacific Power is projecting out to 2042. In its own projections, it is set to reduce emissions by just 50% by 2030. This is compared to the required 80% clean energy requirement for 2030 under Oregon law.
While the goal is 100% clean energy by 2040, Pacific Power is projected to increase emissions. The utility is showing reducing emissions in the short term, up to a 70% reduction by 2037. However, that number dips down to a 60% emissions reduction above the baseline by 2042.
Not only is this plan not aligned with Oregon law, but it is also worse than the plan that regulators rejected in 2023. At this rate, Pacific Power is not set to meet emissions targets by 2040–if ever.
Cancelling Clean Energy Projects
Pacific Power is moving further away from clean energy in this year’s updated plan. In 2023, the utility canceled clean energy projects at the very beginning stages of their development. Now, Pacific Power is continuing to claim that it cannot invest in renewable energy.
It is no secret that Pacific Power has been hurting financially after being found liable for the 2020 Labor Day wildfires in Oregon. However, the company—owned by mega-billionaire Warren Buffett—is using these costs as an excuse not to invest in renewable energy on a reasonable and legally required timeline.
Protecting communities from wildfires, particularly those caused by utilities, is something CUB is very concerned about. At the same time, CUB has criticized Pacific Power for using wildfires as an excuse for not doing its job, all while refusing to address the root causes—greenhouse gas emissions. The long-term and short-term solution to wildfires is to reduce carbon emissions and stop investing in fossil fuels.
Significantly delaying investments in renewable energy has real impacts on customers. While waiting until lawsuits settle may be best for shareholders, it most likely will drive up energy bills down the line. CUB has long been urging utilities to make a slow, steady, and thoughtful transition to clean energy.
By spreading out new projects over a longer period of time, customers are not hit with huge bill increases all at once. What Pacific Power wants to do is wait until the last minute to invest in a large amount of renewables all at once. This could be the difference between energy bills going up an average of $5 per month versus $30+ per month. For those in less energy-efficient homes, the bills will be much higher.
Increasing Reliance of Fossil Fuels, Not Decreasing
Instead of planning to add more wind, solar, and hydroelectric power, or even greater investments in energy efficiency, Pacific Power is more interested in expanding fossil fuels and making money off those investments on the backs of Oregonians. It does this under faulty premises and the promise of currently unavailable technology that regulators have reiterated are not realistic solutions.
Pacific Power originally committed to phasing out coal by 2030. In its 2023 plan, it pivoted to converting those coal plants to run on methane gas. It did this all the while knowing it would eventually need to reduce methane natural gas to meet Oregon’s clean energy law requirements.
But, the utility has not improved its plan since it was rejected in 2023. In fact, the updated plan projects a slower transition away from coal. With the new plan, renewables are not set to outpace fossil fuels until 2032 (previously set for 2025). This would mean Pacific Power would have just 8 years to transition half of its system to clean energy. And customers would have to pay for huge investments in clean energy in a very short amount of time.
Graph showing Pacific Power’s plan for coal use in its 2023 Integrated Resource Plan (IRP) vs. the 2024 updated plan.
The utility plans to transition old coal plants to natural gas in the 2020s before moving the converted gas plants to renewables in the 2030s. CUB is concerned that the gas conversion in this plan will add an unnecessary cost to customers and slow down the transition to clean electricity.
Pacific Power is also working under the assumption that power plants running on methane (natural gas) could be converted into hydrogen gas plants in the future. While there are some hydrogen projects on the horizon, this is still not a technology that is on the ground for utilities.
Hydrogen is not an effective solution in the near term. This fuel is largely still in development and is not widely available on the market. In addition, hydrogen cannot be swapped 1:1 for methane. The majority (if not all) of the upcoming projects assume that hydrogen must be blended with methane at no more than 30%. Further, access to this fuel will require significant new infrastructure because our current pipelines are not equipped to transport hydrogen.
Pacific Power’s assumption that it can replace 100% of its methane with non-emitting hydrogen is incorrect and dangerous. By planning for unproven technology, it effectively has no plan for replacing natural gas and reducing those emissions. It makes absolutely no economic sense to make these risky planning assumptions. We, including Pacific Power, know that realistic cost-effective, clean pathways exist. These risks make even less sense when it comes to protecting customers from unnecessary costs.
This is the same problem that gas utilities in Oregon are creating in their plans to meet climate regulations. When you’re in a hole, stop digging. Investing in fossil fuels for electricity in Oregon does not make economic sense. Betting on future, unproven technologies, especially when market-ready, cost-effective alternatives exist, doesn’t make sense for Oregon. And the Commission has rejected these types of proposals from natural gas utilities. We cannot have our electric utilities taking a page out of playbooks from fossil fuel companies.
Read More: NW Natural Has Not Shown it Can Meet Climate Regulations (CUB Blog)
Bad Planning is Bad for Customers… and Energy Bills
One of the reasons that utilities, like Pacific Power, are required to submit resource plans is so that regulators can ensure customers are receiving quality service at a reasonable cost. These plans have big impacts on how utilities spend money and what could end up on customers’ bills down the line.
As Pacific Power doubles down on poor planning for the resources that become electricity going into people’s homes, they risk:
- Unnecessarily high bills for households & familiesUnreliable service for customers
- Overspending on fuel for electricity generation
- Adding greenhouse gasses to the atmosphere, exacerbating climate change, and increasing our risk of wildfires
Delaying Clean Energy Is Financially Risky
In previous resource plans, Pacific Power assumed that it would have steady, yearly growth in renewable energy. This would have allowed the company to keep customers’ bills relatively stable while working toward reducing emissions. While the 2023 plan was rejected by regulators for not being sufficient in moving toward clean energy, the steady progress was still potentially there.
In the updated plan, Pacific Power has abandoned a steady growth of renewables. Instead, it is proposing sudden, late-in-the-game dramatic increases in investing in clean energy that could cause major spikes in customers’ bills. The utility has not analyzed the risks of this strategy, either.
By betting on its ability to quickly bring a lot of clean energy online all at once, customers could suffer. Risks include fluctuations in pricing, supply chain issues, and more. As other states work to meet their own clean energy rules, increased competition across the country may make waiting much more costly.
Planning for Unavailable Resources is Expensive and Risky
While Pacific Power is hoping that hydrogen gas will be a viable alternative to methane (natural gas), the reality is not so hopeful. When a utility includes a currently unavailable resource in its plan, the risk is that it might not be available in the future either.
When a utility is short on energy, it has to go to the market to purchase more. This is most common in times of extreme heat or cold when customers are using much more energy than expected. Utilities should try to avoid these extra energy purchases as much as possible through good planning. If Pacific Power’s plan is allowed to go through with an over-reliance on hydrogen, there is a good chance it would have to turn to the market.
The problem with purchasing energy on the market is that it is much more expensive. This is similar to the difference between buying toilet paper in bulk at Costco versus buying a single roll of toilet paper at a corner store or on InstantCart. You spend much more per unit buying one-offs than in bulk purchases. We want to avoid our utilities buying bulk quantities at one-off prices.
We Need Regulators to Step In
Now that Pacific Power has proposed a worse plan than regulators rejected last year, we need a big change. The Oregon Public Utility Commission has a responsibility to order Pacific Power to move forward with responsible emissions reductions and investments in clean energy.
In the joint comments with Sierra Club, CUB, and other advocates are asking that regulators at the Commission take strong action. Pacific Power has shown that it will not meet deadlines voluntarily. We need to force them to comply with the law.
The 100% Clean Electricity Act requires that utilities such as PacifiCorp submit Clean Energy Plans that “[d]emonstrate the electric company is making continual progress within the planning period towards meeting the clean energy targets” as set forth within the Act.
For its part, the Commission must “ensure that an electric company demonstrates continual progress,” which Pacific Power is not doing. The Commission must also make sure Pacific Power “is taking actions as soon as practicable that facilitate rapid reduction of greenhouse gas emissions at reasonable costs to retail electricity consumers.”
We are asking regulators at the Oregon Public Utility Commission to use their power to step up for affordability and the climate and hold Pacific Power accountable. If they won’t, who will?
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06/20/24 | 1 Comment | Pacific Power Strays Further Away From 100% Clean