Oregon’s Energy Efficiency Leadership: A Brief History
Posted on February 12, 2021 by Bob Jenks
Tags, Energy
Over the past four decades, Oregon and the Pacific Northwest have established a record of leadership in energy efficiency. This record spans from policy decisions that began in 1980 all the way to HB 3141, proposed in the 2021 legislative session. Energy efficiency is a cost-effective resource because it costs less to save a kilowatt-hour of electricity then it does to generate a new kilowatt. Energy efficiency saves money and reduces climate pollution.
In 1980, the U.S Congress passed the Northwest Power and Conservation Act that recognized the value of energy efficiency investments. In 1999, Oregon’s SB 1149 turned this recognition into action by ensuring that energy efficiency would be a priority utility investment, even as large industrial customers were being allowed to leave the utilities to purchase power in the wholesale market.
SB 1149 included a 3 percent surcharge, called a public purpose charge, on the bills of the two major regulated electric utilities serving Oregon: Portland General Electric (PGE) and Pacific Power. Public purpose money is allocated to energy efficiency investments, weatherization programs for low-income households, support for targeted renewable energy investments, and energy improvements for schools and low-income housing developments. This allocation is overseen by the Oregon Public Utility Commission (PUC). Fifty seven percent of the public purpose charge currently goes to energy efficiency, and the PUC has contracted with the Energy Trust of Oregon to run the energy efficiency programs.
By 2008, however, it became clear that public purpose dollars alone were not sufficient. That year the Legislature authorized utilities to fund additional energy efficiency investments for residential and small commercial customers in broader legislation, SB 838. But SB 838 did not address industrial efficiency. More recently, the legislature adopted the 2016 Coal to Clean legislation, SB 1547, which requires utilities to acquire all cost-effective energy efficiency investments.
The cumulative results of these policies have been impressive. From a national perspective, the American Council for an Energy Efficient Economy ranked Oregon among the top ten most energy efficient states for the 13th year in a row in their most recent 2019 assessment. And the Pacific Northwest is the only region of the country where average household electric use has been declining.
The chart above shows that between 1990 and 1999, the average PGE customer household’s electric usage went down by about 3 percent. That reduction accelerated after adoption of SB 1149, since the public purpose charge provided more funding for energy efficiency investments. By 2008, PGE’s average household electric usage declined by an additional 6 percent. And since 2008, when SB 838 allowed energy efficiency investment to grow beyond the public purpose charge, efficiency savings have increased significantly and PGE’s household electric usage declined by an additional 12 percent.
In total, PGE’s average household electric usage has declined by more than 21 percent since 1990. This is in marked contrast to national household electric usage, which increased by 12 percent in the same time period. In California, household electric usage has been declining in recent years but is still higher than it was in 1990.
If Oregon’s electric usage had followed national trends, the major utilities serving our state would likely have added new coal and gas plants. Electricity bills would have been significantly higher, and the challenge of reducing our climate pollution now would be much greater.
But to continue this success, we need to update our energy efficiency laws. While SB 1547 requires the utilities to acquire all cost-effective energy efficiency, industrial efficiency programs are limited by the constraints of SB 838 to the original public purpose funding level. It is likely, then, that industrial energy efficiency projects that would otherwise provide system benefits won’t be funded. All good laws can be enhanced, and it is time to improve the public purpose charge by passing HB 3141, legislation that CUB helped develop.
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02/12/21 | 1 Comment | Oregon’s Energy Efficiency Leadership: A Brief History