Oregon regulators acknowledged, with conditions, PacifiCorp's plans to invest more than $3 billion in wind resources and a new transmission line.
Following a lengthy deliberation, the Oregon Public Utility Commission on Dec. 11 acknowledged in a 2-1 vote the "Energy Vision 2020" investments with conditions that will be further defined in a written order but generally are aimed at protecting ratepayers.
The company in April filed its latest integrated resource plan, or IRP, that by the end of 2020 calls for repowering more than 900 MW of PacifiCorp's existing wind fleet, building 1,100 MW of new wind projects primarily in Wyoming, and starting construction on a 140-mile segment of its 500-kV Gateway West transmission line. The transmission line is part of PacifiCorp's Energy Gateway Transmission Expansion plan to add roughly 2,000 miles of new transmission lines across the West.
While PacifiCorp said there is a need for the Energy Vision 2020 resources, PUC staff had argued that the company did not demonstrate a need for such a large capital investment. Going into commission deliberations that took place Dec. 5 and Dec. 11, a staff report recommended that regulators acknowledge only part of the 2017 IRP.
For instance, staff recommended the commission not acknowledge the wind repowering, request for proposals for new wind resources and the Gateway West segment. Staff, however, said regulators should acknowledge issuance of an RFP for renewable energy credits to meet renewable portfolio standard requirements as needed and to continue efforts to permit and implement the Energy Gateway transmission plan.
Toward the end of a nearly four-and-a-half hour meeting Dec. 11, Commissioner Stephen Bloom described his dissent on matters around the Energy Vision investments as a "soft no," because he is not precluding future cost recovery if the investments are found to be prudent. Bloom said right now he is concerned that PacifiCorp did not establish a need for its plans, making it too risky for ratepayers.
Bloom, who previously served as general counsel to private wind energy developer EverPower Wind Holdings Inc., said he is generally sympathetic to the wind world and there are many good reasons to support renewables. "I'm just very concerned about the risks to the ratepayers," he said.
Commission Chair Lisa Hardie said she was comfortable acknowledging the plan because of protections to hold ratepayers harmless for unnecessary risk and cost in a subsequent ratemaking proceeding.
"I feel like there is a possibility here to allow the company to take some risks that do some good things that hold ratepayers harmless," Hardie said. "And if we can walk down that path and if we can find a way to do it in this environment with the expiration of these [production tax credits], I think it's worth trying to do."
PacifCorp thinks the ruling provides a reasonable path forward for Energy Vision 2020 while ensuring appropriate protections for customers, spokesman Bob Gravely said.
"We know there are policy and other uncertainties that could impact whether it makes sense to move forward, and think it's appropriate for the commission to ensure customers are protected if conditions around the projects change," he said. "We believe we can work within these conditions and have built in a series of off-ramps if conditions change."
PacifiCorp continues to see the investments as a way to cost-effectively increase the amount of renewable energy serving customers, Gravely said. He added that the projects are also expected to bring substantial economic benefits to rural communities where the facilities will be located.
While acknowledgment of the IRP and Energy Vision 2020 investments is an important step, he said there are regulatory proceedings underway in other states that will have to play out before a decision can be made to move forward. The result of tax reform in Congress and results of the request for bids to build new wind resources will also impact that decision, he said.
Renewables developers are worried about parts of tax bills passed by the U.S. House of Representatives and Senate.
The House bill effectively would lower the value of the federal wind production tax credit and toughen its eligibility requirements while ending the commercial solar investment tax credit at the end of 2027. The Senate legislation would preserve the existing wind and solar credits but includes language that renewable energy developers fear will hamper investment.
PacifiCorp issued the wind RFP in September and expects to have made final decisions and completed agreements by mid-April 2018. (Oregon PUC Docket No. LC 67)
