In 2007, former Governor Ted Kulongoski enacted Oregon’s renewable portfolio standard (RPS) requiring utilities with three percent or more of the state’s load to purchase 25 percent of all electricity sold to customers come from newer eligible renewable sources by 2025.
Qualifying sources include: solar; wind; hydropower; ocean thermal; wave and tidal power; geothermal; hydrogen using anhydrous ammonia derived from certain renewable sources; municipal solid waste; and biomass, including biogas. Newer eligible renewable resources are defined as sources installed after 1995.
In 2009, the RPS was amended to include a carve-out for solar photovoltaic (PV) electricity. Utilities must generate 20 megawatts of electricity from solar PV by 2020.
Utilities may buy and sell renewable energy credits (RECs) to meet the requirement. Utilities may purchase RECs bundled with or electricity or separately. RECs may only be used to meet certain portions of a utility’s mandate obligation.
In lieu of RECs, utilities may opt for an alternative compliance payment (ACP) The Oregon Public Utilities Commission (PUC) established the ACP rate of $50 per megawatt-hour (MWh) for 2011. The PUC revisits the ACP rate every other year.
Utilities are exempt from RPS requirements if the cost of compliance exceeds four percent of its annual revenue or exceed its projected load requirements.
The PUC also allows investor-owned utilities to recoup all costs prudently incurred in complying with the RPS.
Source: Database of State Incentives for Renewables and Efficiency