|Select Economic and Energy Data†||Value||State Rank|
|Real Gross Domestic Product, per capita||$38,801||16th highest|
|Gasoline Price, per gallon||$2.89||12th highest|
|Electricity Price, per kWh||7.63¢||16th lowest|
Oregon has relatively affordable electricity prices (23 percent below the national average) because hydroelectric power provides nearly 60 percent of Oregon’s electricity. Only Washington produces more hydroelectric power than Oregon. About 30 percent of the state’s electricity is produced from natural gas. Wind and wood combined provide another 7 percent of electricity supply.
Oregon lacks fossil fuel resources. Most of Oregon’s hydroelectric electricity is generated on the Columbia River, on which the state’s four largest electricity generation facilities are located. These sites have allowed the state to utilize its major energy resource, helping keep electricity prices relatively low. Oregon also has renewable resource potential in wind and geothermal energy.
Regulatory Impediments to Affordable Energy
Although affordable energy is a vital component of a healthy economy, regulations frequently increase energy costs. Regulations imposed in the name of reducing carbon dioxide and greenhouse gas emissions are especially costly. Carbon dioxide is a natural byproduct of the combustion of all carbon-containing fuels, such as natural gas, petroleum, coal, wood, and other organic materials. Today, there is no cost-effective way to capture the carbon dioxide output of the combustion of these fuels, so any regulations that limit carbon dioxide emissions will either limit the use of natural gas, petroleum, and coal, or dramatically increase their prices.
Below are some facts about Oregon’s regulatory environment that are likely to affect the cost of energy or the cost of using energy. Oregon has passed a large number of costly regulations.
- Oregon imposes a goal of reducing its greenhouse gas emissions to 10 percent below 1990 levels by 2020 and to 75 percent below 1990 levels by 2050.[i] The bill, however, did not include the regulatory authorities necessary to achieve these goals. Instead, it established a Global Warming Commission responsible for recommending ways to meet the goals.
- Oregon is a member of the Western Climate Initiative (WCI), a regional agreement among some American governors and Canadian premiers to target greenhouse gas reductions. The central component of this agreement is the eventual enactment of a cap-and-trade scheme to reduce greenhouse gas emissions 15 percent below 2005 levels by 2020.
- Oregon has a de facto ban on new coal-fired power plants. Senate Bill 101, passed in 2009, limits power plant emissions to 1,100 pounds of carbon dioxide per megawatt of generated electricity.[ii] Because the law does not allow for the use of offsets to meet this standard, this regulation is a de facto ban on inexpensive coal power plants. In addition, House Bill 3283, enacted in 1997, requires new natural gas power plants to reduce greenhouse gas emissions by 17 percent, though offsets can be used to meet that standard.[iii] The law also instituted other emissions limits on non-baseload and non-generating energy facilities.
- Oregon requires utilities to generate from renewable sources a certain percentage of the electricity that they sell. The state’s renewable portfolio standard requires: that large utilities (more than 3 percent of state load) generate 25 percent of retail electricity sales from newer renewables (those placed in service after January 1, 1995); that smaller utilities (over 1.5 percent of state load, but less than 3 percent of state load) meet a 10 percent RPS by 2025; and that the smallest utilities (less than 1.5 percent of state load) meet a 5 percent RPS by 2025.[iv]
- Oregon requires gasoline to be mixed with renewable fuels. Senate Bill 1079, passed in 2008, mandates that all gasoline must contain 10 percent ethanol after in-state ethanol production passes 40 million gallons per year.[v] There is an analogous biodiesel quota for diesel.
- House Bill 2186, passed in 2009, allows the Oregon Environmental Quality Commission (EQC) to adopt rules for the reduction of greenhouse gas emissions from transportation fuels.[vi] This may include a low-carbon fuel standard, among other programs.
- Oregon imposes automobile fuel economy standards similar to California’s, which attempts to regulate greenhouse gas emissions from new vehicles. In 2006, the Oregon Environmental Quality Commission (EQC) instituted permanent rules to adopt California’s vehicle emissions standards.[vii]
- Oregon requires new residential and commercial buildings to meet energy efficiency standards. One-to-two-family residential buildings must meet the 2008 Oregon Residential Specialty Code, which is based off the 2006 International Residential Code. Commercial buildings must meet the 2007 Oregon Structural Specialty Code, which is based off the 2006 International Building Code.[viii] The International Residential and Building Codes, both developed by the International Code Council, are model codes that mandate certain energy efficiency standards. New state buildings must exceed state building code energy conservation provisions by at least 20 percent, while existing buildings must reduce energy use by 20 percent compared to baseline energy use in 2000.[ix]
- Oregon imposes state-based appliance efficiency standards for automatic commercial icemakers, bottle-type water dispensers, commercial hot food holding cabinets, commercial refrigerators and freezers, compact audio produces, DVD players and recorders, and portable electric spas.[x]
- Oregon allows utilities to “decouple” revenue from the actual sale of electricity and natural gas. Such decoupling allows utilities to increase their revenue by selling less electricity and natural gas.
† Data Sources: Real GDP per capita 2008: Bureau of Economic Analysis, News Release: GDP by State (June 2, 2009), http://www.bea.gov/newsreleases/regional/gdp_ state/gsp_newsrelease.htm; Unemployment: Bureau of Labor Statistics, Regional and State Employment and Unemployment–February 2010 (Mar. 10, 2010); Gasoline Prices: American Automobile Association, AAA Daily Fuel Gauge Report (Mar. 30, 2010); Electricity Prices: Energy Information Administration, Electric Power Monthly, Table 5.6.B., Average Retail Price of Electricity, (March 15, 2010), http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_b.html; Electricity Generation Data: Energy Information Administration, Electricity Generation 2009, http://www.eia.doe.gov/cneaf/electricity/epa/generation_state_mon.xls.
[i] H.B. 3543 (Or. 2007), http://www.leg.state.or.us/07reg/measpdf/hb3500.dir/hb3543.en.pdf.
[ii] S.B. 101 (Or. 2009), http://www.leg.state.or.us/09reg/measpdf/sb0100.dir/sb0101.en.pdf.
[iii] H.B. 3283 (Or. 1997), http://www.leg.state.or.us/97reg/measures/hb3200.dir/hb3283.a.html.
[iv] Lawrence Berkeley National Laboratory, Renewables Portfolio Standards in the United States, http://eetd.lbl.gov/ea/ems/reports/lbnl-154e.pdf.
[v] S.B. 1079 (Or. 2008), http://www.leg.state.or.us/08ss1/measures/sb1000.dir/sb1079.en.html.
[vi] H.B. 2186 (Or. 2009), http://www.leg.state.or.us/09reg/measpdf/hb2100.dir/hb2186.a.pdf.
[vii] Oregon Department of Environmental Quality, Oregon’s Low Carbon Fuel Standard, http://www.deq.state.or.us/aq/committees/lowcarbon.htm (last visited Mar. 8, 2010).
[viii] Building Codes Assistance Program, Code Status: Oregon, http://bcap-energy.org/node/90.
[ix] Oregon Department of Energy – Conservation Division, State Energy Efficiency Design (SEED) Program, http://oregon.gov/ENERGY/CONS/SEED/index.shtml.
[x] Oregon Department of Energy – Conservation Division, State-Regulated Appliance and Equipment Standards, http://www.oregon.gov/ENERGY/CONS/StateRegulatedApplianceStandards.shtml.