Where’s the real threat of higher rates coming from?  A: Not clean energy.

The Industrial Customers of Northwest Utilities, better known as ICNU, has been opposing SB 838, the Renewable Energy Standard (or RES), Oregon’s chance to build an electricity system composed of 25% renewable resources by 2025, on the grounds that rates might go up. One of the leaders of its coalition in opposition has been local corporate heavy Weyerhauser. Despite the 4% cost cap IN THE BILL, they have continued to beat the drum with legislators that rates would rise if we protect the stability of our electrical supply and our environment through investments in renewables. In fact, investment in renewable energy now will prevent higher costs later by avoiding fossil fuel volatility and carbon regulation. The bill also contains other consumer protections.

The truth is that the threat of higher rates isn’t from the RES. As a matter of fact, PacifiCorp, in their latest resource plan, is expanding by over 40%—from 1400 to 2000 Mw—their amount of cost-effective renewable resources, and plans to integrate these resources by 2014. They are finding that renewables are cost-effective even today. (It’s still important to pass the RES to ensure that all utilities make these kinds of investments.) And as carbon regulation hits and gas and coal prices go up, they will be even more affordable.

The real threat of higher rates is actually from Weyerhauser and ICNU themselves.

While the industrial customers were bemoaning higher rates at the Capitol, they were also actively trying to raise most residential customers’ rates, by suing Bonneville Power Administration over the Residential Exchange. Their argument was that the Exchange, a provision of federal law that allocates a share of the benefits of the federal hydropower system to residential and small farm customers of investor-owned utilities (IOUs) such as PGE and PacifiCorp, was unfairly “subsidizing” these residential customers of IOUs on the backs of public power and industrial customers. The amount of benefits under the current Exchange settlement is worth $300 million/year or about 13% of these residential customers’ rates. The court decided last week that the way BPA settled the Residential Exchange in their last rate case was not consistent with federal law; the court did not decide against the Exchange itself, but the amount to be allocated now hangs in some uncertainty. “‘We’re pleased that the 9th Circuit recognized the BPA was overstepping its authority,’ said Melinda Davison, an attorney who represents industrial customers such as Weyerhauser and Georgia Pacific. ‘We don’t think public power customers should be subsidizing residential ratepayers.’” (“Ruling could raise power rates,” Oregonian, 05-04-07.)

Where to begin? First off, there’s the matter of complaining about a potential (but unlikely) 4% rate increase while actively working to raise other customers’ rates a good deal more than that. Nice one. Then there’s the matter of calling the Exchange a subsidy, when it’s actually a fair allocation of shared federal resources, granted to all the region’s residents in the 1980 Northwest Power Act. The Exchange is no more of a subsidy than the benefits that public power and industrial customers get. We actually don’t believe it would even be legal for BPA to eliminate the Exchange benefits, but that’s a battle for another day. Finally, what are industrial customers thinking? They insist that investment in new resources is unnecessary, be they renewable resources, conservation and energy efficiency programs, or even traditional fossil fuel generation (the one place we tend to agree with them). What, then, do they think we’re going to do for increased energy as our region absorbs the expected growth in population over coming decades? We don’t follow their reasoning, but we’re certainly not following their lead on a path sure to lead to higher costs and bigger problems down the road.

This obstinate refusal to acknowledge the new ecological and economic reality is not really a necessary part of corporate business practice. The Oregonian announced May 9th that REI, Yakima, and Nike are all working on achieving carbon neutrality by offsetting the greenhouse gases they emit as a part of doing business. The day before that, Environmental Defense sent out a News Release saying that 12 more multinational corporations, including General Motors and Shell, were signing on to the U.S. Climate Action Partnership (USCAP), bringing the total number to 22. “As part of this announcement, these companies pledge to support national legislation to reduce America’s global warming pollution by 60-80% by 2050.” These organizations, not known for their radical rabble-rousing, are simply seeing the writing on the wall. In fact, according to one local expert, quoted in the Oregonian, “‘It’s not entirely commercial self-promotion, and it’s not entirely intrinsic corporate virtue,’ said Angus Duncan, president of the nonprofit Bonneville Environmental Foundation, which promotes clean energy development. ‘It’s a mix of two.’” These businesses know it’s in their best interests to change course. Apparently Weyerhauser, which had earnings of $755 million in the first quarter of this year, isn’t seeing the pattern or what is at stake.

If we let Weyerhauser dictate energy policy for the region, the end result will be both higher rates and hotter, dirtier air. What a deal. The RES still has a chance and is the best deal for Oregon’s environment, community and economy. Oregon Legislators have the opportunity to do a good thing if they will only pass a Renewable Energy Standard for Oregon. Call your House Representative now at 800-332-2313 or email through the web. Tell him/her to vote yes on SB 838 for clean energy.

Finding a way to balance affordable rates and stable energy sources that don’t cause irreparable harm to our environment is not radical politics—it’s just good energy policy.

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