At the beginning of the 2009 legislative session, Oregon Governor Ted Kulongoski announced an ambitious agenda for state action to reduce greenhouse gases (GHG). Then the tumbling economy got in the way and GHG lost its position at center stage. Still, some things did get done in the session that ended last month.

Oregon had already adopted renewable energy portfolio standards (RPS) for its electric utilities, approved California automotive emissions standards, and had the nation’s most generous business energy tax credit (BETC). This year the plan was to add a GHG cap and trade program and establish fuel standards, among other things. Some of it passed, some didn’t, and the governor has said little about which he will sign into law.

Oregon Senate Bill 80 (SB 80) would have established the cap and trade program, in line with the Western Climate Initiative, but failed. The principle reason seems to be that a federal bill may be imminent. That legislation, the Waxman-Markey bill (HR 2454) passed the U.S. House on June 26 by a razor thin vote along party lines (219-212). The bill includes a provision pre-empting state legislation. Its fate is in the U.S. Senate, where it will need at least 60 votes to survive a filibuster, and the final shape of the bill is anyone’s guess. If it appears a federal cap and trade bill is not achievable, or if it is indefinitely delayed, SB 80 is likely to be reintroduced in Oregon in some form.

Other climate bills did pass.

  • SB 38 authorizes a rulemaking to require registration and reporting for import to the state of electricity or fossil fuels.
  • SB 101 establishes a GHG standard for electricity generation and prohibits utilities from long-term financial commitments for resources that do not meet the standard, effectively banning import of coal-fired plant output.
  • HB 2186 calls for development of a standard to reduce GHG emissions from transportation fuel by 10 percent by 2020 and to conduct a study on retrofitting of trucks to make them more efficient; this element was proposed as mandatory, but a compromise calling for the study was adopted. This provision is intended to piggyback on a California study of improving existing truck efficiency. HB 2186 also established a task force to look at reducing GHG emissions through integrated land use and transportation planning.
  • HB 3039 promotes solar energy and provides a 2:1 RPS credit for each kilowatt-hour produced from a qualifying facility operational before Jan. 1, 2016, and that generates at least 500 kilowatts. The bill sets a limit of 20 megawatts of capacity for the RPS credit.
  • HB 2940 allows RPS credits for biomass facilities in place before 1995, capped at 100 megawatts. There are eight biomass plants and one garbage burner in the state. This controversial bill was not proposed by the utilities; rather it was driven by the Oregon forest products industry in the interest of maintaining jobs and to provide a source of income for declining mills. Though the bill had broad bipartisan support among legislators, many observers see it as inappropriate to give RPS credits to old generating plants, predicting that existing hydropower will be right behind. The concept behind RPS for many is to offer an incentive for new development of renewable resources, not to reward existing ones. As of this writing the governor has not acted on the bill but is known to be considering a veto.
  • HB 2472 modifies the BETC to include electric vehicle manufacturers among the industries eligible for the credit, along with renewable energy facilities and manufacturers of equipment for renewable energy production. The BETC was reduced to match budget concerns, and the governor is also considering a veto of this bill in the interest of keeping Oregon competitive to attract clean tech business.

All eyes now shift to the U. S. Senate to see if federal GHG controls will be enacted. It may take a while.