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Oregon bill targets 100% clean power by 2040, with labor and environmental justice on board

After Democratic cap-and-trade bills faltered in the face of GOP revolts, an electricity-focused, consensus-driven bill gains ground in Oregon.

Jeff St. John
Jeff St. John
6 min read
Oregon bill targets 100% clean power by 2040, with labor and environmental justice on board

Democrats holding the majority in Oregon’s legislature tried to pass economywide carbon cap-and-trade bills in 2019 and 2020, only to be frustrated by Republicans fleeing the state capitol to prevent it.

This year, proponents of clean energy have backed an alternative approach with much broader support and what they see as less likelihood of Republican revolt: a bill that would set the state’s two biggest investor-owned utilities on a path to zero-carbon emissions by 2040.

Update: House Bill 2021, which was passed by the legislature and now awaits signature by Democratic Gov. Kate Brown, has won the support of environmental advocates like the Sierra Club and the Natural Resources Defense Council. It also has the backing of Oregon’s two big investor-owned utilities, Portland General Electric and Pacific Power, for its mandate to cut the carbon emissions of electricity they provide in the state by 80 percent by 2030, 90 percent by 2035 and 100 percent by 2040.

The bill’s provisions to contain costs and give labor and community representatives a stake in clean energy development have also won support from ratepayer advocates such as the Oregon Citizens’ Utility Board and NW Energy Coalition, plus a wide swath of labor unions and environmental justice groups.

Alessandra de la Torre, an organizer with southern Oregon climate justice organization Rogue Climate, explained in a Tuesday interview that her group is encouraged by a number of justice-focused provisions in the bill. “The transition to clean energy must center justice, especially for those that have been disproportionately impacted by the harms of our energy systems,” she said.

The coalition backing this bill is broader than the one gathered by Democratic proponents of carbon cap-and-trade bills proposed in 2019 and 2020, which saw protests from business groups and workers in industries like trucking that could have faced rising costs for fuel and energy. Those bills were stymied by Republican lawmakers fleeing the legislature, and in some cases the state, which prevented the legislature from reaching the quorum needed to pass them.

HB 2021 emerged as an alternative approach through the work of the Oregon Just Transition Alliance, an environmental justice coalition that held months’ worth of discussions with groups across the state.

The group’s former interim director, Khanh Pham, won election to the state House last year. She sponsored the bill “to create living-wage jobs and invest in community-based renewable energy projects and to help build more disaster resilience as we transition to 100% clean energy by 2040,” as she told Oregon Public Radio this month.

While most state Republicans oppose the bill, at least one, Rep. Greg Smith, who represents a district in the rural northeastern part of the state, voted to pass it out of the House Revenue Committee. HB 2021 has yet to face the kind of organized opposition that confronted cap-and-trade bills the past two years.

A pathway to clean electricity with cost and reliability exemptions

“Oregon has fallen behind on our climate leadership,” said Meredith Connolly, Oregon director for nonprofit group Climate Solutions. Oregon failed to meet its decade-old goal of reducing economywide greenhouse gas emissions by 10 percent below 1990 levels by last year, and the state's “emissions are still growing year-over-year.”

At the same time, “the climate impacts are increasing here at a rate that’s really shocking and scary,” she said. Last summer, the state faced a devastating wildfire season that was exacerbated by climate change.

According to 2019 data, Oregon gets about 37 percent of its electricity from the region’s ample hydropower resources, about 27 percent from coal, 25 percent from natural gas, 5 percent from wind, 3.5 percent from nuclear and less than 2 percent from solar power.

Much of its fossil-fueled power comes from out of state. Oregon passed a law in 2016 to eliminate coal-fired power from its grid by 2035, and it closed its only in-state coal plant in 2020. But the state's reliance on natural gas has increased as coal has declined, Connolly said.

HB 2021 would extend its decarbonization mandate to all power sold by PGE and Pacific Power whether it’s generated inside or outside the state’s borders. It would also ban the expansion or construction of new natural gas power plants within Oregon.

Shifting the state’s current 2030 target of 50 percent renewable energy to 80 percent carbon-free electricity, as HB 2021 would do, will also boost renewables procurement, given that both utilities were already close to hitting their 50 percent targets, according to Connolly. The new target should spur the development of an additional 2,750 megawatts of new renewables through the end of the decade, according to a study by Climate Solutions, NW Energy Coalition and Renewable Northwest.

“That’s significant, it’s achievable, and it’s affordable,” Connolly said.

Oregon’s two major investor-owned utilities are already increasingly tapping lower-cost renewable energy, she noted. PGE last year committed to net-zero carbon emissions by 2040 and is contracting for increasing amounts of wind and solar power and battery storage. Pacific Power has been expanding its clean energy plans as part of a broader renewable energy push by parent company PacifiCorp, a Berkshire Hathaway–owned utility with operations in six states.

At the same time, both utilities have expressed concern about relying entirely on renewable energy and battery storage to meet future needs. PacifiCorp’s long-range energy plan across its six-state region calls for gigawatts of new wind and solar power and energy storage by 2038, for example. But it also envisions adding new natural-gas-fired peaker plants outside Oregon starting in 2026.

HB 2021 does allow PGE and Pacific Power to ask the Oregon Public Utility Commission for exemptions from complying with the annual carbon-reduction mandates if doing so would threaten grid reliability or cause customer rates to rise more than 6 percent in a year, Connolly noted. Clean energy advocates are hopeful that neither exemption will come into play, just as similar exemptions in the state's renewable portfolio standard have not yet been triggered, she said.

Labor and environmental justice provisions

The multiparty negotiations over Oregon’s new clean energy bill also brought in a broad set of labor and environmental justice standards. Those include provisions for project labor agreements or prevailing wage and benefits for workers on renewable energy projects greater than 10 megawatts, whether or not they’re funded with public dollars — a similar step to bills passed this year in New York and awaiting a vote in Illinois.

As for supporting communities, the bill will provide $50 million in grants to boost community renewable energy projects outside of the state’s biggest city, Portland, which already has a similar program.

These funds are meant to help overcome upfront cost barriers to smaller-than-utility-scale projects that could provide employment and tax benefits to communities struggling with the economic downturn of the Covid-19 pandemic, the impact of last summer’s wildfires, and the longer-running job losses in the state’s once-thriving timber industry, Connolly said.

Other environmental justice aspects of the bill include requirements for utilities to seek out and consider input from low-income ratepayers, Native American tribes and communities that face pollution from power plants in their energy planning and siting process.

“That’s key for community members: to have opportunities to influence clean energy plans,” said de la Torre of Rogue Climate.

Another bill passed earlier in Oregon’s legislative session, the Energy Affordability Act, will create the state’s first low-income ratepayer class, similar to those that exist in many other states. “We’re looking forward to being able to have this low-income rate class to alleviate the pressure on families who have been struggling to pay their bills,” de la Torre said.

What about transportation, buildings and industry?

One thing that HB 2021 doesn’t do that previous carbon cap-and-trade bills would have done is create a common framework for reducing carbon emissions from transportation, buildings, industry and land use. Similar dynamics have played out in other states’ climate legislation debates this year, as with Colorado’s recently passed bill that sets emissions targets for electricity, industry and oil and gas sectors, but not for transportation and buildings.

In the wake of the failure to pass cap-and-trade legislation last year, Brown signed an executive order mandating that state agencies pursue policies aimed at reducing economywide greenhouse gas emissions by 45 percent from 1990 levels by 2035 and by 80 percent by 2050. But it’s unclear how much authority these agencies will have to set emissions-reduction mandates without legislative guidance.

Transportation accounts for roughly two-fifths of Oregon’s carbon emissions, as well as air pollution that disproportionately harms low-income communities and communities of color, Brown said in an early June conversation hosted by The Washington Post.

House Bill 2165, signed into law last month, will extend existing rebates for electric vehicles and double those rebates to $5,000 for those who meet low- or medium-income thresholds. It will also increase utility funding for EV charging including for medium- and heavy-duty electric trucks and buses.

In the buildings sector, a bill setting more stringent energy-efficiency standards for appliances, HB 2062, has passed. But another that would allow cities to adopt more energy-efficient building codes than those set by the state, HB 2398, has yet to pass out of committee for a floor vote in the few days remaining in the legislative session.

Climate Solutions has supported carbon cap-and-trade programs like those created in California more than a decade ago, and a similar program passed in Washington state this year. But cutting the carbon emissions from Oregon’s electricity sector can be “a momentum builder” toward cutting emissions from transportation and buildings as well, Connolly said.

“In the face of unrelenting climate impacts, we need unrelenting climate progress too,” she said. “Now we’ll have a 100% clean grid to build on.”

(Top image courtesy of Appolinary Kalashnikova)

clean energyOregonclimate billcarbon emissionsrenewable energy

Jeff St. John

Jeff St. John covers technology, economic and regulatory issues influencing the global transition to low-carbon energy. He is former managing editor and senior grid edge editor of Greentech Media.