75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
Enrolled
House Bill 3039
Sponsored by COMMITTEE ON SUSTAINABILITY AND ECONOMIC DEVELOPMENT
CHAPTER ................
AN ACT
Relating to qualifying renewable energy projects; and declaring
an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + As used in sections 1 to 5 of this 2009 Act:
(1) 'Electric company' has the meaning given that term in ORS
757.600.
(2) 'Nameplate capacity' means the maximum rated output of a
generator or other electric power production equipment under
specific conditions designated by the manufacturer.
(3) 'Qualifying system' means:
(a) An alternative energy system used for emergency backup
power by a state agency or facility that is at least 30 percent
more efficient than existing agency or facility sources,
including fuel cells; or
(b) A solar photovoltaic energy system that:
(A) Meets the electric company's customer load service
obligation as its primary purpose;
(B) Directly connects to an electric company's electrical
system within this state or indirectly connects through the
system of an electric company's retail electricity consumer or
the electric system of a third party that is not an electric
company's retail electricity consumer but whose system is located
within this state;
(C) Has meters or other devices in place to monitor and measure
the quantity of energy generated by the solar photovoltaic energy
system; and
(D) Meets any other siting, design, interconnection,
installation and electric output standards and codes required by
the laws of this state.
(4) 'Resource value' means the estimated value to an electric
company of the electricity delivered from a solar photovoltaic
energy system associated with:
(a) The avoided cost of energy, including avoided fuel price
volatility, minus the costs of firming and shaping the
electricity generated from the facility;
(b) Avoided distribution and transmission cost; and
(c) The renewable energy certificates established under ORS
469A.130.
(5) 'Retail electricity consumer' means a retail electricity
consumer, as defined in ORS 757.600, that is located in Oregon
and is served by an electric company.
Enrolled House Bill 3039 (HB 3039-B) Page 1
(6) 'Solar photovoltaic energy system' means equipment and
devices that have the primary purpose of collecting solar energy
and generating electricity by photovoltaic effect. + }
SECTION 2. { + (1) Prior to April 1, 2010, the Public Utility
Commission shall establish a pilot program for each electric
company to demonstrate the use and effectiveness of volumetric
incentive rates and payments for electricity delivered from solar
photovoltaic energy systems that are permanently installed in
this state by retail electricity consumers and that first become
operational after the program begins. The cumulative nameplate
capacity of the qualifying systems enrolled in all of the pilot
programs may not exceed 25 megawatts of alternating current.
Qualifying systems enrolled in the pilot program may not have
nameplate generating capacity greater than 500 kilowatts.
(2) The commission by rule shall adopt requirements for the
pilot programs described in subsection (1) of this section. Each
electric company shall file for commission approval rate
schedules for the pilot programs that conform to the
requirements.
(3) The commission may establish incentive rates for the pilot
programs to enable the development of the most efficient solar
photovoltaic energy systems.
(4) A retail electricity consumer participating in a pilot
program may receive payments based on the actual electricity
generated from solar photovoltaic energy system output for 15
years from the consumer's date of enrollment in the program, at
rates or through a rate formula in a rate schedule established at
the time of enrollment. The consumer thereafter may receive
payments based upon the actual electricity generated from the
qualifying system at a rate equal to the resource value.
(5) The commission may adjust the rate schedule as needed for
new pilot program participants for the purpose of meeting the
goal established in subsection (1) of this section. Once a retail
electricity consumer is enrolled in a program, the rates or rate
formula for determining payments to the consumer may not be
modified.
(6) The commission shall establish pilot programs designed to
attain a goal of 75 percent of the energy under each program to
be generated by smaller-scale qualifying systems within the
allowed generating capacity range. The commission by rule shall
define the size of a small-scale qualifying system and may adjust
the definition of size for small-scale qualifying systems based
upon the costs of the energy generated, the feasibility of
attaining the goal and other factors. The commission may also
adjust the maximum percentage goal of energy generated by
small-scale qualifying systems based upon the same factors.
(7) The commission may establish total generator nameplate
capacity limits for an electric company so that the rate impact
of the pilot program for any customer class does not exceed 0.25
percent of the electric company's revenue requirement for the
class in any year.
(8) Ownership of renewable energy certificates established
under ORS 469A.130 that are associated with renewable energy
generation that is sold to an electric company under the pilot
programs must be transferred to the electric company and may be
used to comply with the renewable portfolio standard described in
ORS 469A.052 or 469A.055.
(9) To the extent that incentive rates paid for electricity
delivered to each electric company under a pilot program exceed
the resource value, qualifying systems participating in the pilot
Enrolled House Bill 3039 (HB 3039-B) Page 2
programs are not eligible for expenditures under ORS 757.612
(3)(b)(B) or tax credits under ORS 469.160 to 469.180 or 469.185
to 469.225.
(10) All prudently incurred costs associated with compliance
with this section are recoverable in the rates of an electric
company. The costs associated with the resource value are
recoverable in the rates of all retail electricity consumers.
Prudently incurred costs in excess of the resource value are
recoverable from customer classes eligible for the pilot programs
described in subsection (1) of this section.
(11) The commission shall advise and assist the owners and
operators of qualifying systems in identifying and using grants,
incentive moneys, federal funding and other sources of
noninvestment financial support for the construction and
operation of qualifying systems.
(12) The pilot programs described in subsection (1) of this
section close to new participants on March 31, 2015, or when 25
megawatts of alternating current of nameplate capacity of solar
photovoltaic energy systems have been permanently installed by
retail electricity consumers under the pilot programs, whichever
is earlier.
(13) The commission shall submit a report to the Legislative
Assembly by January 1 of each odd-numbered year beginning in
2011. The report must evaluate the effectiveness of paying
incentive rates under the pilot programs described in subsection
(1) of this section compared to incentive rates described in
subsection (9) of this section for promoting the use of solar
photovoltaic energy systems and reducing system costs. The report
must also evaluate the estimated cost of the program to retail
electricity consumers. + }
SECTION 3. { + (1) On or before January 1, 2020, the total
solar photovoltaic generating nameplate capacity, from qualifying
systems generating at least 500 kilowatts, of all electric
companies in this state must be at least 20 megawatts of
alternating current with no single project greater than five
megawatts of alternating current.
(2) For the purpose of complying with the solar photovoltaic
generating capacity standard established by this section, on or
before January 1, 2020, each electric company is required to
maintain a minimum generating capacity from qualifying systems.
The minimum generating capacity for each electric company is
determined by multiplying 20 megawatts by a fraction equal to the
electric company's share of all retail electricity sales made in
this state in 2008 by all electric companies.
(3) For the purposes of sections 1 to 5 of this 2009 Act,
capacity of a solar photovoltaic energy system is measured on the
alternating current side of the system's inverter using the
measurement standards set forth by the Public Utility Commission
by rule. If the system does not use an inverter, the measurement
shall be made at the direct current level.
(4) An electric company may satisfy the solar photovoltaic
generating capacity standard established by this section with
solar photovoltaic energy systems owned by the company or with
contracts for the purchase of electricity from qualifying
systems.
(5) All costs prudently incurred by an electric company to
comply with the solar photovoltaic generating capacity standard
established by this section are recoverable in the company's
rates and are eligible for an automatic adjustment clause
established by the commission under ORS 469A.120.
Enrolled House Bill 3039 (HB 3039-B) Page 3
(6) Costs associated with compliance with the solar
photovoltaic generating capacity standard established by this
section are not above-market costs for purposes of ORS 757.600 to
757.689.
(7) The commission may adopt rules implementing and enforcing
this section. + }
SECTION 4. { + (1) Any electricity produced from a qualifying
system under section 3 of this 2009 Act that is physically
located in this state may be used by an electric company to
comply with the renewable portfolio standard established under
ORS 469A.005 to 469A.210.
(2) For each kilowatt-hour of electricity produced from a
qualifying system that first becomes operational before January
1, 2016, and generates at least 500 kilowatts, an electric
company will be credited with two kilowatt-hours of qualifying
electricity toward the company's compliance with the renewable
portfolio standard under ORS 469A.005 to 469A.210, up to a
maximum of 20 megawatts of capacity. + }
SECTION 5. { + Sections 1 to 5 of this 2009 Act apply only to
qualifying systems that are solar photovoltaic energy
systems. + }
SECTION 6. { + (1) Before constructing or renovating a major
facility, an authorized state agency shall, after comparing
various equipment options and to the greatest extent practicable,
use fuel cell power systems for emergency backup power
applications and for critical power applications in lieu of other
equipment options.
(2)(a) The State Department of Energy shall, in consultation
with the Oregon Department of Administrative Services, adopt
rules establishing criteria for the comparison of fuel cell power
systems and other equipment options required by subsection (1) of
this section.
(b) Criteria to be established under this subsection must
address:
(A) The impact of emissions, including but not limited to
nitrous oxide, sulfur oxide, carbon monoxide, carbon dioxide and
particulates, from various equipment options, on the environment,
regardless of whether the equipment is installed indoors or
installed outdoors;
(B) Life cycle costs, including but not limited to acquisition
costs, installation and commissioning costs, siting and
permitting costs, maintenance costs and fueling and
decommissioning costs; and
(C) The complexity of equipment options and any ancillary
equipment. + }
SECTION 7. { + The Public Utility Commission shall report to
the Legislative Assembly prior to January 1, 2011, on any
recommended legislative changes to improve implementation of the
pilot programs and any adjustments the commission has made by
rule as authorized by section 2 of this 2009 Act to improve
implementation of the pilot programs. In compiling its report,
the commission shall also consider regulatory policies designed
to increase the use of solar photovoltaic energy systems, make
them more affordable, reduce the cost of incentive programs to
utility customers and promote the development of the solar
industry in Oregon. The commission's report must compare policy
options with respect to their impact on utility customers and
solar industry development in Oregon. + }
SECTION 8. { + Nothing in sections 1 to 5 and 6 of this 2009
Act affects the authority of the Public Utility Commission to set
Enrolled House Bill 3039 (HB 3039-B) Page 4
fair and reasonable rates as authorized under ORS 756.040
(1). + }
SECTION 9. { + Section 6 of this 2009 Act becomes operative on
April 1, 2010. + }
SECTION 10. { + This 2009 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2009 Act takes effect on
its passage. + }
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Passed by House May 4, 2009
Repassed by House June 24, 2009
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate June 12, 2009
Repassed by Senate June 25, 2009
...........................................................
President of Senate
Enrolled House Bill 3039 (HB 3039-B) Page 5
Received by Governor:
......M.,............., 2009
Approved:
......M.,............., 2009
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2009
...........................................................
Secretary of State
Enrolled House Bill 3039 (HB 3039-B) Page 6