Energy Efficiency
Electrification
Low-Carbon Fuels
Resilience
A clock face with a wind turbine as the clock hand, a sun symbol indicating daytime, and wind turbine blades in the background, representing renewable energy.

Clean Electricity

Secure reliable, affordable, and clean electricity by expanding the electricity system and mainstreaming load flexibility.  

Electricity is a key fuel for Oregon to meet its energy and climate policy objectives. For many decades, investments in hydroelectric facilities and transmission wires have supported economic growth and equitable access to electricity in the Pacific Northwest. As the region has grown, additional generating resources have contributed to Oregon’s electricity supply, including fossil fuel plants that burn coal and natural gas.

We must continue to invest in clean electricity resources and grid infrastructure, including adding more generation, storage, and transmission. New investments must coincide with steps to avoid further straining Oregonians already experiencing high energy burdens.

Oregon’s future growing electricity demand will likely be met with a mix of resources in Oregon and in other western states.

  • In-state development can be expected to provide jobs and support economic growth that may reduce the pressure of higher utility costs, but may also have negative effects, including potentially burdening environmental justice communities and competing with other priorities like agriculture and conservation.

    • The equity and justice framework provides guidance for this work to minimize negative effects while maximizing opportunities. It will be important to continue bringing in the voices of local communities, so they are able to contribute to conversations and speak to their energy needs.

We also must pursue opportunities to increase the efficiency of system operations, on both the supply-side and demand-side.

  • Due to the model’s design, it made perfectly efficient use of the transmission system and economically dispatched generation across the West, which does not occur today. This change in operations — not infrastructure — was able on its own to reduce modeled emissions in the baseline year to only 14.3 MMTCO2e, a roughly 15 percent decrease from actual emissions in 2023. Considering the billions of dollars the West has saved through the real-time electricity market since 2014, much work is already underway to further progress toward an organized electricity market.

  • Presently, two day-ahead markets are under development: Southwest Power Pool’s Markets+ and the California Independent System Operator’s Extended Day Ahead Market. Achieving system efficiencies closer to those modeled will require more action in the coming decades.

Growing electric loads must also be integrated into the electricity system in a way that maximizes use of the existing system while minimizing contribution to peak load growth.

  • While not all loads are flexible, many significant ones are. Many electric vehicles, for example, can be charged during off-peak hours, taking advantage of times when electricity is cheap and abundant, while also making better use of existing grid infrastructure and minimizing the need for new investments.

  • It will also be important to consider creative solutions, such as the possibility of relying on the backup power that tech loads already have, to mitigate peak demands. However, if that backup power continues to be predominantly diesel-powered generators rather than battery storage, this could support grid reliability but significantly reduce local air quality and harm local communities. While these measures will not replace the need to build resources on the power system, they comprise an essential element of the resource portfolio. They can also relieve pressure on the power system, including on the hydroelectric system, helping to reduce demand and protect fish. Utility business models, markets, and incentive mechanisms must aim to identify and leverage this potential while compensating customers for their role in becoming part of “virtual power plants.”

In the modeling for 2050, natural gas facilities and unspecified electricity continued to support Oregon grid operations, but the level of reliance upon them was significantly reduced, consistent with Oregon’s climate change policies and the model’s least-cost planning analysis. By 2050, Oregon’s power system continued to emit about 2 million metric tons of carbon dioxide equivalent, which is a massive decrease from the 16.9 million MTCO2e actually emitted in 2023. This reduction is even more impressive when considering that by 2050, the modeled power system provided more than double the amount of electricity it provides today. The main driver of near-term load growth is tech loads like data centers, with electrification of transportation contributing significantly in the long-term. To reliably serve Oregon’s current and growing electricity needs, the electricity system must expand.

Clean Electricity Policies

Each policy has a short-hand reference shown in italics used throughout the strategy.

2a

Facilitate energy infrastructure enhancement and expansion while avoiding, minimizing, and mitigating negative impacts on energy burden, natural and working lands, tribal cultural resources, and communities. (Utility-scale and distributed energy resources)

  • There is not currently sufficient transmission capacity, generating resources, or storage to reliably power Oregon’s future electricity needs, particularly if new data centers come online as quickly as forecasted. Planning for and building utility-scale projects must be a priority. This is particularly critical when considering that utility-scale projects often take years to complete the necessary siting, planning, permitting, acquisition of equipment and materials, engineering, construction, and interconnection processes.

    Opportunities to expedite these processes, for example by reducing duplication and implementing efficiencies, should be pursued. Grid enhancing technologies can also help improve efficiencies of existing transmission lines. While Oregon will always rely on a combination of in-state and out-of-state resources, it is important to recognize that there are benefits to in-state development. These include energy sector jobs and broader economic growth as businesses gain improved access to electricity to power their activities.

    In addition to utility-scale resources, it is important to build distributed energy resources, which are often more costly to build per kilowatt hour generated, but can be constructed more quickly, provide important resilience benefits (especially when paired with battery storage), and typically have fewer effects on natural and cultural resources. Pursuing smaller utility-scale batteries and other resources like co-located generation in some areas can also mitigate the need to build new lines when strategically deployed to areas that act as bottlenecks in the transmission system. Failure to develop sufficient resources will not only threaten system reliability and hinder progress toward Oregon’s clean energy objectives but will inhibit economic development and discourage new businesses from entering the state.

  • State guidance and support is needed to expeditiously navigate the need for more resources, while recognizing that existing siting and permitting processes are intended to provide consultation and engagement with affected communities and carefully consider development benefits and burdens on communities, the environment, and cultural resources.

    The need for development must be carefully balanced against these competing priorities to mitigate the environmental and community impact by resource development. Both utility-scale and smaller- scale resources are being affected by changes to federal policy that is raising costs and causing uncertainty and delay. Other barriers include determining how to fairly allocate costs for transmission projects and mitigating affordability concerns from new investments.

    Oregon has some existing programs and policies that incentivize development of community-scale or smaller resources. For example:

    • The Oregon Department of Energy’s Community Renewable Energy Grant Program provides grants for planning and developing community renewable energy and energy resilience projects.

    • At least half of the grant funds are awarded for projects that serve environmental justice communities, such as communities of color, lower-income communities, and rural communities.

    • In addition, ORS 469A.210 sets a goal for community-based renewable energy projects to comprise at least 10 percent of the aggregate electrical capacity for large investor-owned utilities by 2030.

    • In other programs, set-asides, formula, or block grants for Tribal governments have been effective, particularly in the housing and community development space, and could be effective in supporting development of distributed renewable energy.

    It is important to build on these and other policies over time to ensure continued growth of customer- and community-owned resources, and to expand access to historically and currently underserved communities and areas at highest risk for outages. Currently, many programs are at risk due to lack of state and federal funding. Utility investments are likely to support some smaller-scale projects, but other funding will be necessary to capture the value of resilience benefits and other benefits to local communities.

    • One of the greatest risks to reliability and meeting Oregon’s clean energy goals is that new resources will not be constructed quickly enough to accommodate the pace of rising demand.

    • Limited electricity supply, and the risk of exposure to high wholesale power costs from high demand and low supply, has already been a topic of concern for the region for years. Unfortunately, even where projects already have permits and site certificates, barriers remain to get projects built, including interconnection and supply chain challenges.

    • Cuts in federal funding and changing regulations have reduced support for renewable resources, and tariffs are increasing the costs of materials. These actions threaten to further delay clean energy projects at a time that investment and construction needs to ramp up.

    • Increasingly frequent and intense wildfires are causing additional risks to Oregonians and to the ability to finance and build utility-scale electricity infrastructure. A key component of this risk is the growing scale and uncertainty of wildfire liability for utilities, which can affect the cost of debt and ability to finance projects. It is important to recognize the threat this poses to reliability and ratepayers, and to consider policy options to mitigate these impacts.

    • Even with aggressive cost mitigation through energy efficiency (including load flexibility), the necessary investments in clean energy infrastructure will impose higher costs on customers. Yet many Oregonian households and businesses are already struggling to afford basic needs like energy. To ensure those least able to afford rising energy costs are not further burdened, action to advance needed investments must coincide with action to promote energy affordability. Efforts like the Oregon Public Utility Commission’s ongoing implementation of House Bill 2475 (2021) (the Energy Affordability Act), must continue, and the state should explore further ways to support households and businesses across the state. This is particularly critical in light of the loss of federal energy assistance dollars.

    • While speedy action to advance infrastructure is critical, it is important to minimize and mitigate potential negative impacts on tribal cultural resources, affected communities, natural and working lands, and waters. This requires identifying not only barriers but potential benefits of particular types of infrastructure developments. These potential benefits include local economic development, strengthened resilience, environmental and public health benefits of a shift to low-carbon resources, as well as mitigation of effects such as through agrivoltaics.

2b

Enable consumers to support grid needs by shifting the timing of electricity consumption for distributed flexible loads like EVs or water heaters and larger commercial and industrial loads. (Load flexibility)

  • Oregon’s electric power systems face pressure from rapidly rising loads, extreme weather, and long lead times to construct utility-scale resources.

    New loads driven primarily by data centers and electrification must be integrated with an increasing supply of renewable energy resources with variable power outputs. Demand response programs allow customers to play a role in balancing grid operations by encouraging them to shift their flexible electricity loads away from periods of peak demand.

    • Many households and businesses have flexibility for when they operate electric vehicle chargers, water heaters, laundry and other flexible loads. This might mean, for example, charging a car, home battery, or pre-heating water during times of low system demand or high renewables output. It can save money by reducing peak demand and taking full advantage of available resources across the day and night.

    • More specifically, strategically managed vehicle and battery charging, including options like workplace and off-peak home charging, can maximize the benefits of clean energy while reducing the strain on the grid. In buildings, electric water heaters, space heating, and cooling can all be managed flexibly to provide comfort while supporting the grid.

    • Commercial and industrial electricity loads can also shift some of their operating hours and activate backup energy systems when necessary.

    • Finding opportunities for customers’ backup energy systems, particularly if they are clean, to support grid needs could be particularly valuable. For example, data centers install backup power that can be leveraged to reduce electricity drawn from the grid during peak hours.

  • Historically, the Bonneville Power Administration has led the way in providing flexibility to the Northwest power market through its marketing of hydroelectric power and its occasional requests to customers to provide demand response by delaying power consumption, primarily to large industrial customers like aluminum smelters.

    Demand response programs for other retail customers have not historically been a priority because of the hydropower system’s ability to provide abundant peak power, but that ability may no longer be sufficient.

    With growing electric loads and an increasing share of variable renewable resources, it will be important for policies to help align demand patterns with broader energy system needs. Examples might include continued evolution of utility regulation for investor-owned utilities and cooperation between BPA and consumer-owned utilities to encourage time-of-use rates, promote managed charging or vehicle-to-grid programs, automation, or other enabling mechanisms to motivate and compensate consumers for their flexibility. It may also include technical assistance for utilities across Oregon to identify least-cost methods to align electrification of flexible loads with system operations.

    • Load flexibility ultimately depends on the abilities and actions of end-use consumers, like households and businesses.

    • Not all consumers have the ability to shift the timing of their consumption, particularly those who may lack access to automated technologies, like smart thermostats. Poorly designed or implemented load flexibility policies could unfairly burden these consumers.

    • Conversely, there is a risk that those consumers least able to shift their consumption could be left behind as they are unable to take advantage of policies that reward load flexibility, including financial incentives from utilities or others.

    • Any new policy to promote load flexibility must be designed with these equity concerns in mind. While these risks are significant, it should also be recognized that failing to enable load flexibility will significantly increase costs and impose other negative effects for all consumers.

    • Load flexibility is an opportunity to mitigate the need to build new resources, which lowers costs and reduces effects on natural and working lands, cultural resources, and nearby communities. Utility action is needed to create mechanisms and incentives for load shifting.

      • However, investor-owned utility business models continue to benefit more from capital investments in infrastructure than from investments in programs like demand response and virtual power plants.

      • For consumer-owned utilities, administrative costs associated with administering demand response programs may outweigh the financial benefits.

    • Finally, customers may not know about programs, or may not trust that they are worth participating in.

2c

Consult and engage with Tribes to understand their concerns around energy development and to identify opportunities where state policies, funding, and programs can support tribal priorities while minimizing the effects of development on environmental and cultural resources. (Tribal consultation and engagement)

  • Indigenous Tribes and Bands have been with the lands that we inhabit today throughout Oregon and the Northwest since time immemorial and continue to be a vibrant part of Oregon today. Coordination and formal consultation with Tribes must be an essential component of policy development and implementation. Specifically, clean electricity and transmission line projects may need permits or approval from a tribal agency and Tribe.

    In addition, it is imperative to follow consultation requirements related to federal and state actions and their effects on Tribes, natural and cultural resources, and potential treaty rights. This is particularly important in the context of building clean energy infrastructure because of the potential benefits and risks that these projects carry, and the need to ensure that past harms and injustices are not repeated.

    It is important to understand Tribes’ concerns around energy development and to identify opportunities where state policies, funding, and programs can support tribal priorities. Identifying opportunities to advance tribal energy sovereignty can further help align with Oregon’s goals of clean energy, resilience, and reliability. ‍

  • Policies are needed to advance construction of needed electricity infrastructure. As policies, programs, and projects are developed, it is critical to engage Tribes in their development and implementation.

    Tribal consultation requirements stem from the federal government’s trust responsibility to 574 federally recognized Tribes — in particular, consulting with Tribes on federal actions or decisions, such as permits for proposed energy projects, that affect them and may affect tribal lands, resources, or cultural resources.

    In addition, Oregon law requires state agencies to maintain government-to-government relations with the nine federally-recognized Tribes in Oregon by identifying programs that affect Tribes, notifying affected Tribes, and including representatives of Tribes in developing programs. While consulting with Tribes is critical for many aspects of the energy strategy, consultation on issues affecting the shared electricity grid is highlighted here as a key opportunity.

    Tribal engagement should not, however, be limited to formal requirements or specific programs or projects, but be an ongoing process to build relationships and understanding to better identify areas of cooperation and concern.

    Many Tribes in Oregon have voiced concerns for various types of projects, including utility scale solar, floating offshore wind, and high voltage transmission lines. Through consultation, proposed project designs have a stronger opportunity to avoid negative impacts to natural and cultural resources that are vital to a particular Tribe’s traditional and current cultural practices.

    At the same time, many Tribes have concerns about the effects of climate change and recent extreme weather on natural and cultural resources, which have motivated development of tribal plans, taskforces, or committees to consider clean energy and energy sovereignty. Partnerships and engagement with Tribes and tribal ownership of energy projects can enable Tribes to earn revenue and build wealth for their communities.

    There is a need to work with each Tribe to identify opportunities where state policies, funding, and programs can support tribal priorities while minimizing the effects of development on environmental and cultural resources.

    • There continues to be significant concern and data showing that salmonoid species are declining.

      • The federal Endangered Species Act works to prevent extinction and to recover species to the point where the law's protections are not needed. Legal and administrative actions over decades have sought to find resolution, with a significant effect on hydropower operations, electricity generation, and ratepayer costs. There are several other forums where these issues are being discussed in greater detail with regard to specific hydropower facilities.

      • The modeling for the energy strategy generally assumed continued output from the dams, and if there is a potential of reduced output through changed hydropower operations – the actions in this energy strategy become more important to consider in relieving pressure by reducing demand, creating flexibility, and better utilizing generation over a broader geographic footprint.

    • Failing to consult and coordinate meaningfully with Tribes raises a risk of perpetuating historical and current inequities as well as disrupting a Tribe’s current cultural practices.

      • The state must comply with formal notice requirements, and in parallel work with tribal staff, as appropriate, to understand a Tribe’s priorities and opportunities to address their concerns, interests, and needs when advancing policies, programs, or projects.

      • Failing to work with Tribes on proposed projects also creates legal risk to the projects.

      • Working with Tribes on energy projects may require support and time to ensure there is an understanding of the project, its potential effects, and whether the Tribe has an opportunity to benefit from the project.

2d

Collaborate with the Bonneville Power Administration, neighboring states and other regional entities to address Oregon’s needs as part of a regional grid. (Regional engagement)

  • Oregon imports and exports electricity from across the western region as part of an interconnected electricity system. Oregon is also part of the Bonneville Power Administration’s service area, which covers four states and is federally operated. Energy infrastructure, particularly transmission lines, may require action from multiple sovereigns, such as Tribal governments, the federal government, and state governments to be permitted, developed, and operated.

    The state should build on engagement with other actors to facilitate cross-jurisdictional coordination and collaboration. This engagement is essential to advocate for Oregon’s interests, to maintain consistency between regional and state policies, and to advance priorities like transmission development that often rely on cooperation across utilities and jurisdictions.

    Several initiatives are underway that will strengthen regional ties in how the electricity system is managed; these initiatives deserve support but also require close scrutiny. Considering the billions of dollars the West has saved through the real-time electricity market since 2014, much work is underway to further progress toward an organized electricity market.

    Presently, two day-ahead markets are under development: Southwest Power Pool’s Markets+ and the California Independent System Operator’s Extended Day Ahead Market. The Western Resource Adequacy Program is establishing resource adequacy requirements for the region. Work to construct much-needed interstate transmission lines continues, including through the Western Transmission Expansion Coalition.

  • Regulation

    The power sector is highly regulated. Each state has its own regulations governing in-state utility activity, while the federal government regulates interstate activity (largely transmission). In the case of consumer-owned utilities, they have their own governance structures and are also largely reliant on federal power from BPA.

    Marketplace

    Currently, the regional power marketplace is dominated by long-term bilateral contracts and long-term contract-based transmission rights. Other parts of the country have organized wholesale marketplaces, where a single independent entity dispatches resources efficiently to meet all participants’ needs, and utilities and developers have increased transparency and information. Without such centralized organization, the Northwest power market has higher transactional and operational costs that ultimately increase costs for utility consumers. Since 2014, the Western Energy Imbalance Market has offered a centralized marketplace for real-time power sales, which has saved Oregon utilities and their ratepayers millions of dollars. However, real-time power sales are only a small portion of marketplace transactions. Organized markets for short-term power sales do not address marketplace barriers like transmission rights and utilization.

    Utilities in the region are moving toward more organized power markets to reduce costs and improve reliability. This is essential to more efficiently use existing infrastructure and to benefit from geographic and resource diversity across the region. As the power sector decarbonizes, this regional diversity will become increasingly important. A more diversified supply mix can take advantage of different weather patterns, resource mixes, and time zones to integrate more renewable generation while mitigating risks from weather changes, including extreme weather events and wildfires. Ultimately, moving toward a regional transmission organization would be an important step to improve west-wide coordination and reduce costs for consumers.

    Regional Activities

    It is important that the State of Oregon engage in these activities to advance state energy policy objectives, ensure that regional activities are consistent with state policy, and strengthen Oregon’s cooperation on vital areas including market development, resource adequacy, emissions accounting, and transmission planning. For example, hydropower is a key generating resource for Oregon and the Pacific Northwest, and Oregon should support regional and other planning efforts, such as by the Bonneville Power Administration and the Northwest Power and Conservation Council, to understand and mitigate the expected negative impacts of climate change and extreme weather on hydropower availability. Regional processes like these are becoming increasingly important and complex as the region moves toward day ahead markets, tackles resource adequacy, endeavors to build much needed transmission, and plans for a growing and cleaner grid that is more reliable and resilient.

    • Oregon’s electricity system is not an island, nor would it be desirable for it be to operated like one.

      • While regional engagement with Bonneville Power Administration and other entities requires time and effort, such engagement is critical to understand regional challenges—and then to identify regional opportunities. While regional needs may not perfectly align with Oregon’s needs, advancing dialogue is essential to identify and pursue areas of alignment. Such dialogue can also inform Oregon policymaking on solutions found and lessons learned from others in the region.