Oregon's Environmental Quality Commission lacks authority to regulate emissions from power plants located outside of the state, nor can it hold auctions to sell emissions credits that would be needed in the state's proposed cap-and-reduce emissions program.
Those are two of the obstacles to carrying out Gov. Kate Brown's executive order to create a cap-and-reduce emissions program in the state, according to Oregon Department of Environmental Quality's preliminary analysis on the governor's executive order, released May 15.
With regulation of out-of-state power plants off the table, reducing utilities' greenhouse gas emissions will largely fall to the Oregon PUC, which will look for ways to lower emissions in the regulatory process, according to the commission's preliminary analysis of the governor's order, also released May 15.
Brown signed Executive Order 20-04 on March 10 directing state agencies to take actions to reduce GHG emissions and consider climate change in agency planning (CU No. 1944 ).
The order came in response to the refusal of Senate Republicans to debate cap-and-trade legislation in the previous two legislative sessions, denying a quorum and preventing the Democratic majority the chance to pass any cap-and-trade legislation.
The executive order established science-based GHG emissions-reduction goals for Oregon of at least 45 percent below 1990 levels by 2035 and at least 80 percent below 1990 levels by 2050.
DEQ's analysis also covered clean fuels, reducing GHG emissions from the transportation sector, and regulations aimed at reducing methane emission from landfills and food waste.
The OPUC and DEQ reports raised a number of key legal and policy considerations, and the state agencies have opened a public-comment period to continue to shape the rules.
The DEQ report said one of the main differences between programs the Environmental Quality Commission may adopt under its existing authorities, and programs previously considered by the Oregon Legislature, is that DEQ believes the EQC cannot develop a program designed to generate revenues to the state for investment in emissions-reductions programs.
In addition to potentially needing new statutory authority, DEQ warned companies could avoid Oregon's in-state rules by moving out of state.
"If an emitting entity under the Oregon cap-and-reduce program shifts activity and therefore emissions at little or no cost to outside of Oregon, such shifts would undermine the broader goal of Oregon 'doing its part' to reduce global emissions in addition to harming Oregon's economy," DEQ warned.
The OPUC report was informed by 10 listening sessions with stakeholders between April 23 and May 1, that helped identify "three themes for action—GHG Reduction Activities, Impacted Communities, and Wildfire Prevention and Mitigation."
Under the category of GHG reduction, OPUC has initially identified potential actions in five primary areas that include "utility planning and framework, services and activities, evolution of regulatory framework, transportation electrification and regulator activities," according to the OPUC preliminary report.
The three investor-owned electric utilities that operate in Oregon—Portland General Electric, PacifiCorp and Idaho Power—filed joint comments with the commission recommending "that the PUC apply the Executive Order as a lens on existing proceedings where possible rather than creating new dockets or investigations."
The joint filing says that OPUC is already working on electrifying transportation and mitigating wildfires.
The IOUs also recommended that decarbonizing the electricity sector be done through integrated resource planning and other existing regulatory processes.
"The IRP process, in particular, is an effective forum for considering greenhouse gas emissions reductions alongside affordability and reliability," the IOUs said. "As part of their IRP process, utilities can address with stakeholders how the Executive Order will be incorporated into their planning documents."
The reports are just the start of both agencies responding to EO 20-04. OPUC will accept public comments on the executive order until June 15, and plans to hold a meeting on the subject on June 30.