In March environmentalists hailed legislation eliminating coal from Oregon’s energy mix as historic and landmark. On the face of it, the new bill, known as the Clean Electricity and Coal Transition Plan, does sound impressive. But is it really that big of a deal?
The fact is coal power is on the decline all over the country. It is likely the two Oregon utilities that are affected by the clean energy bill — Portland General Electric and Pacific Power — would have eliminated coal from their generation anyway.
The reason for coal’s decline is the plunge in natural gas prices, the result of the fracking boom in the U.S. It is far more economical for electricity providers to run natural gas plants than coal plants. In addition, federal regulations require coal plant operators to install costly pollution controls, making these plants even more uneconomical to run.
Nationwide natural gas-fired generation surpassed coal-fired generation for the first time in April 2015, and is expected to be the largest share of the nation’s electricity mix by 2022, according to the U.S. Energy Information Administration.
An example of how utilities are ditching coal in favor of natural gas is the move by Puget Sound Energy, a Washington utility, and Talen Energy, an independent power producer, to announce this month the retirement of two units they own in the Colstrip Generating Station, a Montana coal plant that generates power for customers in the Pacific Northwest. “The units are becoming less economic as the price of natural gas has dropped and remained low,” said Puget Sound Energy in a press release about the closure.
Portland General Electric and PacificCorp, the parent of Pacific Power, both own a part of Colstrip’s two other coal-fired units that will remain open. The Clean Electricity and Coal Transition Plan could have accelerated the time it takes for these utilities to get rid of the coal generation. But the bill gives Portland General Electric 19 years to reach that goal; Pacific Power has 14 years. It is a generous deadline that does little to exert time pressure on the utilities.
Portland General Electric is on a much shorter timeline to close the Boardman coal plant it owns in northeastern Oregon. It came to agreement with state and federal regulators in 2010-2011 to close the facility by 2020, roughly half the amount of time it has to stop coal generation from Colstrip.
Steve Corson, spokesman for Portland General Electric, called the 2035 deadline for the coal phase-out “workable.” By that time, the utility would “look at the question of the plant’s future anyway given its age,” he said.
Corson added the utility is unable to make a unilateral decision about the output from the Colstrip plant sooner than the 2035 deadline because of the terms of its ownership agreement. It co-owns two of Colstrip’s units with five other companies.
The real teeth to the Clean Electricity and Coal Transition Plan is the requirement that Portland General Electric and Pacific Power derive 50% of their electricity from renewable energy sources by 2040. Under the previous law, they had to source 20% of electricity from renewables by 2020.
The new legislation provides an incentive for renewable energy development that would not exist if the renewable portfolio standard hadn’t been increased. Natural gas development would have surpassed renewable generation in the absence of the legislation.
One of the challenges developers will face is getting permission to build wind and solar projects because of opposition from land and property owners, said Richard Allen, office managing partner at Marten Law. Utilities will also be faced with having enough gas-fired generation on hand as a back up to the variability of wind and solar energy.
Cliff Gilmore, communications director at Renewable Northwest, an advocacy group, says the new renewable portfolio standard and coal phase-out will not be at all difficult for utilities to meet. The real achievement of the law was the fact that many different groups were able to come up with a plan, he said. Utilities, energy industry and business groups, advocacy and community organizations were all involved in the agreement.
“We worked together to reach a goal that was achievable,” said Gilmore.
I agree it is an achievement for such disparate groups to agree on legislation. But the coal phase-out is not much to shout about and not worthy of being called landmark.
The Clean Fuels Program is far more effective in the emissions reductions it can achieve from the transportation sector, the largest source of the state’s greenhouse gas emissions. Oregon is known for its “green credentials” but it certainly has achieved less than other states in passing effective environmental legislation. The Oregon legislature still has to pass rules that would put a price on carbon, for example, or regulations to decrease harmful emissions from diesel.
The use of hyperbole to describe clean energy legislation is tempting, but it can also mask weaknesses in regulations that should be acknowledged.