There are cap-and-trade backers, and there are cap-and-trade opponents.
And then there are Oregon’s two big investor-owned electric utilities.
Portland General Electric and Pacific Power, which together provide nearly two-thirds of the electricity used in Oregon, have criticized elements of the proposals under consideration in the state Legislature, but they’ve also dangled the possibility they might come aboard.
If they did, it could help tilt a teetering Democrat or two toward “yes” in what appears to be an uphill fight for passage this year (nobody expects any Republican support). For the utilities, the benefit could be a program more friendly to their interests than what a 2019 Legislature, possibly more Democratic than the current one, might deliver.
It’s hard to know, though, how close the utilities really are to breaking with Oregon’s business establishment and supporting passage in this short session.
Consider the testimony of Scott Bolton, Pacific Power’s senior vice president for external affairs and customer solutions, in front of a joint meeting of the Senate and House committees that are working with separate but very similar cap-and-trade proposals.
After several minutes spent detailing the company’s objections — chief among them, that its customers are already paying for emissions reductions through 2016’s Coal to Clean Bill, which both utilities supported — Bolton said, “These concerns that I’m outlining are fixable.”
Rep. Ken Helm, who’s guiding the cap-and-trade push in the House, took the bait.
“We’ve been talking for a long time and it seems to me that we’ve come a long way from where we started,” he said to Bolton.
Helm went on to describe “conversations” about giving the utilities “maybe a unique type of carbon reduction line, a cap of your own in other words, in a manner that both protects your customers and allows the (investor-owned utilities) to still meet the cap we’ve been talking about over the long term.”
The issue here revolves around allowances, the permits that greenhouse-gas polluters are required to buy — at auction or from other allowances owners — matching their emissions. It's an issue that gets wonky fast.
Put simply, though, while cap-and-trade proponents agree that to some extent, the utilities' allowance requirements need to be treated in some way that provides at least some of their customers protection against some rate increases, the utilities want to go further.
Under the current proposals, the utilities would be given allowances, but rather than using them to meet their obligations under cap and trade, most of the allowances would go back up for auction by the state. The proceeds would fund various programs, including rebates to utility ratepayers. This is how California’s cap-and-trade program works.
But PGE and Pacific Power say it would leave their customers only partially protected, and doesn’t recognize the work the utilities are doing to reduce emissions under the Coal to Clean Bill, which extends out to 2040. They want direct allocation of allowances, in amounts that decline over time to ultimately meet the reductions required under cap and trade — 80 percent from 1990 levels by 2050.
Helm seemed to be suggesting, with "a cap of your own," that the utilities would get an emissions-reduction line that conforms with what they're doing under Coal to Clean. If they went above the line, they'd have to pay for allowances. That might not always keep them under the statewide cap-and-trade line, but by 2050, they'd have to be there.
“We seem so close,” Helm said after alluding to this possible solution. “If we can make those change in amendments, do you think you’ll be there? Can you join us?”
That brought a dash of cold water from Bolton.
“Directionally, there is improvement,” he said, “and it does address some of the concerns that have been raised. I would also say that — and this is part of the challenge of trying to do something so big in such a compressed timeline — that there are other issues and considerations that continue to surface.”
The bargaining continues, with just over three weeks to go before the session ends.