United States

United States

Good for price and the environment

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Oregon officials have approved a revolutionary way of regulating their electricity industry for the next four years that includes incentives for investing in renewables and for buying. This so-called "Alternate Form of Regulation" allows a utility such as PacifiCorp of Portland, which co-authored the plan, to get incentives for buying up to 50 MW of renewables.

If the utility beats the target cost for renewables submitted in its Integrated Resource Plan by 10% or more, it gets to keep half of the savings, says Bruce HelleBuyck, PacifiCorp's policy director. Since renewables are eligible if construction started after July 1996, PacifiCorp's 80% ownership of the Wyoming 41.4 MW wind plant is included. The program runs until June 30, 2001. The reform is ground breaking in others ways. It encourages utilities to conserve electricity and ties profits to the quality of service.

The plan was co-authored by local environmental groups such as the National Resources Defence Council, Renewable Northwest Project and the NW Energy Coalition, as well as the state Department of Energy. "We see this new rate reform proposal as a model for the nation as the electric utility industry evolves from its monopoly status to a new role of competing for customers in an open market," said the state's main newspaper, The Oregonian, in a May 19 editorial.

Best match ever

"We think this will be the model for electric distribution companies for the 21st century," says Ralph Cavanagh, northwest program director for the Natural Resources Defense Council. "It represents the best match that we've ever seen between the interests of shareholders, customers and environmental quality," he adds.

Nancy Hirsh, policy director of the NW Energy Coalition, agrees. "This welcomed regulatory innovation ensures that PacifiCorp can maintain its important investments in energy efficiency and develop new renewable resources while reducing its costs in preparation for competition," she says. "This approach is a win-win-win -- for the environment, for consumers and for the company." PacifiCorp's subsidiary Pacific Power serves 475,000 customers in Oregon.

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