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United States

Oregon utilities seek green tags -- Requests for proposals

The two regulated utilities in the US state of Oregon, Portland General Electric (PGE) and PacifiCorp, are looking to buy tradable renewable energy credits -- known as green tags -- and marketing services to fulfil their obligations under the state's restructuring legislation that goes into effect in March 2002. They have both issued requests for proposals to put them in a position to offer two billing options that are required by the law -- an option to buy a blended mix of renewable resources and an option to pay a premium to fund habitat restoration projects around the state. Both will become part of a portfolio of options beginning March 1, and will be sold to customers by independent marketers.

The renewable and habitat options are not new to Oregon electric customers who can already buy wind power at a premium from both utilities, though only PGE offers a "salmon friendly" option to fund habitat projects to offsset damage caused by hydro dams.

PGE currently buys the output of FPL Energy's Vansycle Ridge wind plant in Oregon and PacifiCorp buys wind from Wyoming's Foote Creek wind farm, of which it is part owner. The legislation, however, does not allow utilities to use the green attributes from their own projects to provide renewable energy for the new billing option under deregulation.

"Energy generation is one commodity and the environmental benefits are another," says Destin Nokes of PacifiCorp. "We can sell green tags that we own to others and we can buy green tags from anywhere. But, we can't use those we own or that our affiliates own in our program." He says a series of accounting requirements established by the legislation guards against double counting of green tags, and purchasing green tags from outside the company makes that verification easier.

Both utilities are also seeking proposals for retail services to market the two environmental options to eligible customers. Winners in the solicitation were to be announced last month.

Oregon passed a limited restructuring law in 1999 that was to have been in place this month, but fears about the volatility of deregulated markets after California's experience caused state legislators to postpone the Oregon experiment until March. Customers can also choose two other billing options not included in the solicitation. They are a price tied to market prices and a regulated price set by the Oregon Public Utility Commission.

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