On November 19, 2020, the Oregon Public Utility Commission (PUC) held a Special Public Meeting to receive comments on the Adoption of Work Plans related to Governor Brown’s Executive Order 20-04 on Climate Action.
The environmental nonprofit, Engineers for a Sustainable Future gave the following testimony to the Oregon PUC –
My name is Jack Kerfoot, and I am a member of Engineers for a Sustainable Future (ESF), an organization whose members have extensive work experience in the energy industry, including the utility sector.
We sincerely appreciate the PUC staff and Commissioners for reviewing the significant number of comments on the work plan. Although we are encouraged by the draft work plan, ESF would respectfully recommend including two specific goals and objectives on Greenhouse Gas Reduction Activities: Part 1 – Utility Planning.
- Conduct an Oregon Renewable Energy Transmission and Storage Study to quantify the state’s renewable energy resource potential. This type of study will quantify Oregon’s significant resource potential by type (wind, solar, etc.) and region, which will facilitate the buildout of new transmission lines. The state of New Mexico has completed this type of study to develop and implement programs to ensure the state’s 100% Renewable Portfolio Standard would be achieved in the most expedient and cost effective manner.
- Include a specific goal of identifying major barriers and solutions to the significant permitting challenges for new renewable sites and installation of new power lines to the grid. ESF firmly believe that current state permitting policies are the greatest barrier to the development of our state’s vast renewable resources. Streamlining the permitting processes will accelerate the move from fossil fuels to renewables, reduce the utilities’ development cost, and ultimately save the rate payer money.
ESF also recommends including two specific statements on the economic criteria on Greenhouse Gas Reduction Activities: Part 1 – Utility Planning, Section 1.1 Update IRP Guidelines For GHG Costs and Risks.
- Use risked economic analysis on all projects. Fossil fuels are not renewable and price volatility is a certainty over the typical 40 year life cycle of a natural gas of coal-fired plant. As an example, the cost of natural gas at the Henry Hub distribution center on October 2005 was $13.42/Million BTU and on October 2020 it was $2.39/Million BTU. It is not uncommon for a utility to use the current fossil fuel price and then complete deterministic economic analysis using an inflation factor to forecast the future cost of the commodity, such as natural gas. Probabilistic economic analysis would incorporate historical price volatility to define the future price range and more importantly identify the real economic risk of the project. The economic uncertainties and risk on renewable projects are very low compared to any fossil fuel power plant. Low economic risk is the reason financial institutions are actively lending capital to renewable energy companies across the country. ESF believe decision and risk analysis must be used to assess project risk and then develop risked economics on all projects. This analysis will mitigate project cost overruns and save the rate payer money.
- Benchmark all planned project costs against established levelized cost of energy studies, such as the “Lazard, Levelized Cost of Energy Study, October 20, 2020. New technology is continuing to drive down the cost of renewable energy. As an example, recent benchmark studies show that that energy storage systems are now significantly cheaper than gas peaker plants. Another outdated paradigm is that all offshore wind projects are cost prohibitive. Many west coast utilities do not even consider offshore wind in their IRP to their state PUC. Recent east coast offshore wind PPA prices have fallen from 7.4¢/kWh to 6.5¢/kWh and are projected to continue to fall over the next few years. The strongest and most consistent wind in the US is off the coast of Northern California and Oregon. However, proven, established technology such as offshore wind or floating solar aren’t even on the radar of most Oregon utilities.
I would like to close by thanking the PUC staff and Commissioners for their hard work and for taking time to listen to ESF’s comments.
Engineers for a Sustainable Future
 Power Grid International – “New Mexico Could Be Renewable Energy Exporter If More Transmission Was In Place” by J. Runyon, July 30, 2020
 National Renewable Energy Laboratory, The Vineyard Wind Power Purchase Agreement: Insights for Estimating Costs of U.S. Offshore Wind Projects , Technical Report NREL/TP-5000-72981, February 2019