Oregon’s RPS establishes an obligation for electric utilities, requiring that a percentage of their annual retail sales must come from qualifying renewable resources. The exact percentage required, and the year the compliance obligation begins, depends both on the size and ownership type of the electric utility, as shown in Figure 1, below. As a consumer-owned utility, serving less than 1.5 percent of the state’s total retail electricity sales, Emerald is classified as a “Small Utility” when determining its annual obligation.
Figure 1. Annual percentage target of qualifying electricity by year
| Utility Type | Size | 2011 | 2015 | 2020 | 2025 | 2030 | 2035 | 2040 |
|---|---|---|---|---|---|---|---|---|
| Investor-Owned | 3% or more | 5% | 15% | 20% | 27% | 35% | 45% | 50% |
| Large Utilities | 3% or more | 5% | 15% | 20% | 25% | 25% | 25% | 25% |
| Small(er) Utilities | 1.5% to 3% | — | — | — | 10% | 10% | 10% | 10% |
| Small(est) Utilities | Less than 1.5% | — | — | — | 5% | 5% | 5% | 5% |
Oregon RPS Compliance Rules
The Act defines which types of renewable generation are considered “qualifying electricity” under the RPS. In general, qualifying renewable resources must meet certain renewable fuel standards and be of a certain age. Renewable fuels include the following types of resources:
- Efficiency upgrades (after 1995) at existing hydropower facilities
- Low-impact certified hydropower (with limitations)
- Hydropower built after 1995
- Wind energy
- Solar photovoltaic and solar thermal energy
- Wave, tidal, and ocean thermal energy
- Geothermal energy
- Certain biomass products, including woody biomass and animal manure
- Landfill gas, biogases, hydrogen gas (with limitations)
Short Mountain produces “qualifying electricity” and is an approved facility that’s been producing bundled electricity since its first eligible vintage date of January 2011.
There are several exemptions from compliance outlined in ORS 469A.060, which can serve to reduce a utility’s RPS portfolio obligation. These exemptions ensure that the RPS does not compel utilities to procure new qualifying electricity resources to replace existing non-fossil fuel resources, or to displace Tier 1 energy procured from the Bonneville Power Administration.
Under the Act, utilities may choose to comply with the RPS financially, in lieu of retiring Renewable Energy Certificates (RECs), by an Alternative Compliance Payment. The price for Alternative Compliance Payment is based on the cost of qualifying electric resources, as determined by Emerald and approved by its Board. Details for Alternative Compliance Payment are outlined in ORS 469A.180. Emerald may consider this Alternative Compliance Payment at some point in the future to extend the life of its Short Mountain RECs. One way in which a utility may be able to financially comply is by increasing its self-funded energy efficiency programs. This may have more direct benefit to our customers than retiring RECs and it
To limit the impact of complying with the RPS on retail consumer rates, the Act also outlines a Cost Cap. This 4% Cost Cap provides an upper limit on the cost for incremental actions required to comply with the Act. Further information on how this Cost Cap is defined can be found in ORS 469A.445.
Per rules adopted by the Oregon Department of Energy, generation volumes qualifying for RECs are based on values recorded and reported to the Western Renewable Energy Generation Information System (WREGIS). WREGIS is an organizational database that receives monthly generation volumes of renewable generation and serves as the regional system of record to issue, monitor, transfer, and account for RECs. One MWh of renewable generation equals one REC. The RECs have identification numbers, akin to serial numbers, that indicate the generation project and the month the electricity was generated. An “unbundled REC” is a REC that is acquired by a utility or electricity service supplier by trade, purchase, or other transfer without acquiring the electricity that is associated with the REC. Short Mountain RECs are considered “bundled” for Emerald since the qualifying facility is owned by Emerald. If Emerald were to sell/transfer these RECs to another agency, the RECs would then be considered unbundled.
Excepting for limitations due to Cost Caps, or the use of Alternative Compliance Payments, compliance is demonstrated by retiring a quantity of WREGIS RECs equal to the compliance obligation. Once a REC is retired in WREGIS it is no longer available to be banked, sold, or used for any other RPS program.
Oregon RPS Portfolio Obligation
Figure 2. Calculating Emerald’s RPS Obligation
| Category | Calculation | Quantity | Unit |
|---|---|---|---|
| Retail Sales to Customers | a | 481,887 | MWh |
| RPS Target1 | b | 5% | % |
| 2025 RPS Obligation BEFORE Exemption | c = a x b | 24,094 | MWh |
| Generation from Exempt Resources | |||
| BPA Tier 1 Net Purchases | d | 441,840 | MWh |
| Non-Federal Qualifying Resources (if any) | e | 0 | MWh |
| Total 2025 MWhs from Exempt Resources | g = d + e | 441,840 | MWh |
| Fraction of Retail Sales from Exempt Resources | h = min (g ÷ a, 100%) | 92% | % |
| Qualifying Electricity Target after Exemption | i = min (100% – h, b) | 5% | % |
| 2RPS Portfolio Obligation after Exemption | i x a | 24,094 | MWh |
| 1Using the Smallest Utility definition from the Oregon PUC. EPUD was 0.9% of statewide retail electricity sales in 2023. 2Emerald must retire 1 REC for each MWh of calculated RPS Obligation after Exemption to comply with Oregon RPS. |
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As detailed in Figure 2, above, Emerald’s qualifying electricity target for 2025 is 5 percent of retail sales before exemptions. Under Oregon’s RPS rules, if exempt generation in 2025 exceeds 95 percent of total retail sales, then Emerald can reduce the 5 percent qualifying electricity target by the amount the exempt generation exceeds 95 percent. If exempt generation exceeds 100 percent of total retail sales, then Emerald’s qualifying electricity target is reduced to zero (0) percent.
Emerald’s 2025 RPS portfolio obligation results in the retirement of 24,094 RECs in 2026. Emerald started the year with approximately 303,242 Short Mountain RECs eligible for compliance purposes. Emerald owns approximately 60,142 additional RECs from various wind projects with vintages from no earlier than January 2011. These additional RECs were sourced either by power purchase agreement or via allocation from environmental attributes as part of the BPA Regional Dialogue contract. Emerald’s required REC retirement for the 2025 compliance period represents just about 6.6% of the total available. It’s expected that this inventory of Short Mountain RECs, in addition to the future additions made until such time the plant is decommissioned, will allow Emerald to rely on Short Mountain REC retirements to meet future RPS obligations through the year 2038. This timeline could be extended if Emerald were to shift some of its RPS compliance obligation from REC retirements to an Alternative Compliance Payment.