75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
Enrolled
Senate Bill 101
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Governor Theodore R.
Kulongoski for State Department of Energy)
CHAPTER ................
AN ACT
Relating to greenhouse gas; creating new provisions; amending ORS
469.320; and limiting expenditures.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + As used in sections 1 to 6 of this 2009 Act:
(1) 'Additional interest' means:
(a) The acquisition, by the holder of an interest in a
generating facility located in Oregon, of a separate interest in
that generating facility that is producing energy and is in
service for tax purposes, commercially operable or in rates on
July 1, 2010; and
(b) The renewal of an existing contract of five or more years
that includes the acquisition of baseload electricity for an
additional term of five or more years where the expected
greenhouse gas emissions profile of the contract renewal is
substantially similar to that of the previous contract.
(2) 'Annual plant capacity factor' means the ratio of the
electricity produced by a generating facility during one year,
measured in kilowatt-hours, to the electricity the generating
facility could have produced if it had been operated at its rated
capacity throughout the same year, expressed in kilowatt-hours.
(3)(a) 'Baseload electricity' means electricity produced by a
generating facility that is designed and intended, at the time a
site certificate is issued to the owner of the facility, to
provide electricity on a continuous basis at an annual plant
capacity factor of at least 60 percent.
(b) 'Baseload electricity' does not include electricity from:
(A) A qualifying facility under the federal Public Utility
Regulatory Policies Act of 1978, 16 U.S.C. 2601 to 2645; or
(B) A generating source that uses natural gas or petroleum
distillates as a fuel source and that is primarily used to serve
either peak demand or to integrate energy from a renewable energy
source described in ORS 469A.025.
(4) 'Construction' has the meaning given that term in ORS
469.300.
(5) 'Consumer-owned utility' has the meaning given that term in
ORS 757.600.
(6) 'Electric company' has the meaning given that term in ORS
757.600.
Enrolled Senate Bill 101 (SB 101-B) Page 1
(7) 'Electricity service supplier' has the meaning given that
term in ORS 757.600.
(8) 'Generating facility' includes one or more jointly operated
electricity generators that use the same fuel type, have the same
in-service date and operate at the same location as described in
ORS 469.300.
(9) 'Governing board' means the legislative authority of a
consumer-owned utility.
(10)(a) 'Long-term financial commitment' means an investment in
or upgrade of a generating facility that produces baseload
electricity, or a contract with a term of more than five years
that includes acquisition of baseload electricity.
(b) 'Long-term financial commitment' does not include:
(A) Routine or necessary maintenance;
(B) Installation of emission control equipment;
(C) Installation, replacement or modification of equipment that
improves the heat rate of the facility or reduces a generating
facility's pounds of greenhouse gases per megawatt-hour of
electricity;
(D) Installation, replacement or modification of equipment
where the primary purpose is to maintain reliable generation
output capability and not to extend the life of the generating
facility, and that does not increase the heat input or fuel usage
as specified in existing generation air quality permits, but that
may result in incidental increases in generation capacity;
(E) Repairs necessitated by sudden and unexpected equipment
failure; or
(F) An acquisition of an additional interest.
(11) 'Output-based methodology' means a greenhouse gas
emissions standard that is expressed in pounds of greenhouse
gases emitted per megawatt-hour, factoring in the useful thermal
energy employed for purposes other than the generation of
electricity.
(12) 'Site certificate' has the meaning given that term in ORS
469.300.
(13) 'Upgrade' means any modification made for the primary
purpose of increasing the electric generation capacity of a
baseload facility. + }
SECTION 2. { + (1) Unless modified by rule by the Public
Utility Commission as provided in this section, the greenhouse
gas emissions standard that applies to electric companies and
electricity service suppliers is 1,100 pounds of greenhouse gases
per megawatt-hour for a generating facility.
(2) Unless modified pursuant to subsection (4) of this section,
the greenhouse gas emissions standard applies only to carbon
dioxide emissions.
(3) For purposes of applying the emissions standard to
cogeneration facilities, the commission shall establish an
output-based methodology to ensure that the calculation of
emissions of greenhouse gases for cogeneration facilities
recognizes the total usable energy output of the process and
includes all greenhouse gases emitted by the facility in the
production of both electrical and thermal energy.
(4) The commission shall review the greenhouse gas emissions
standard established under this section no more than once every
three years. After public notice and hearing, and consultation
with the State Department of Energy, the commission may:
(a) Modify the emissions standard to include other greenhouse
gases as defined in ORS 468A.210, with the other greenhouse gases
expressed as their carbon dioxide equivalent; and
Enrolled Senate Bill 101 (SB 101-B) Page 2
(b) Modify the emissions standard based upon current
information on the rate of greenhouse gas emissions from a
commercially available combined-cycle natural gas generating
facility that:
(A) Employs a combination of one or more gas turbines and one
or more steam turbines and produces electricity in the steam
turbines from waste heat produced by the gas turbines;
(B) Has a heat rate at high elevation within the boundaries of
the Western Electricity Coordinating Council; and
(C) Has a heat rate at ambient temperatures when operating
during the hottest day of the year.
(5) In modifying the greenhouse gas emissions standard, the
commission shall:
(a) Use an output-based methodology to ensure that the
calculation of greenhouse gas emissions through cogeneration
recognizes the total usable energy output of the process and
includes all greenhouse gases emitted by the generating facility
in the production of both electrical and thermal energy; and
(b) Consider the effects of the emissions standard on system
reliability and overall costs to electricity consumers.
(6) If upon a review conducted pursuant to subsection (4) of
this section, the commission determines that a mandatory
greenhouse gas emissions limit has been established pursuant to
state or federal law, the commission shall issue a report to the
appropriate legislative committees of the Legislative Assembly
stating which portions, if any, of the greenhouse gas emissions
standard are no longer necessary as a matter of state law.
(7) Modifications to the emissions standard made pursuant to
this section do not apply to long-term financial commitments
entered into prior to the time of such modification. A long-term
financial commitment begins upon execution of a contract for the
acquisition of baseload electricity or upon construction of a
generating facility. + }
SECTION 3. { + (1) Unless modified by rule by the State
Department of Energy as provided in this section, the greenhouse
gas emissions standard that applies to consumer-owned utilities
is 1,100 pounds of greenhouse gases per megawatt-hour for a
generating facility.
(2) Unless modified pursuant to subsection (4) of this section,
the greenhouse gas emissions standard includes only carbon
dioxide emissions.
(3) For purposes of applying the emissions standard to
cogeneration facilities, the department shall establish an
output-based methodology to ensure that the calculation of
emissions of greenhouse gases for cogeneration facilities
recognizes the total usable energy output of the process and
includes all greenhouse gases emitted by the facility in the
production of both electrical and thermal energy.
(4) The department shall review the greenhouse gas emissions
standard established under this section no more than once every
three years. After public notice and hearing, and consultation
with the Public Utilities Commission, the department may:
(a) Modify the emissions standard to include other greenhouse
gases as defined in ORS 468A.210, with the other greenhouse gases
expressed as their carbon dioxide equivalent; and
(b) Modify the emissions standard based upon current
information on the rate of greenhouse gas emissions from a
commercially available combined-cycle natural gas generating
facility that:
Enrolled Senate Bill 101 (SB 101-B) Page 3
(A) Employs a combination of one or more gas turbines and one
or more steam turbines and produces electricity in the steam
turbines from waste heat produced by the gas turbines;
(B) Has a heat rate at high elevation within the boundaries of
the Western Electricity Coordinating Council; and
(C) Has a heat rate at ambient temperatures when operating
during the hottest day of the year.
(5) In modifying the greenhouse gas emissions standard, the
department shall:
(a) Use an output-based methodology to ensure that the
calculation of greenhouse gas emissions through cogeneration
recognizes the total usable energy output of the process and
includes all greenhouse gases emitted by the generating facility
in the production of both electrical and thermal energy; and
(b) Consider the effects of the emissions standard on system
reliability and overall costs to electricity consumers.
(6) If upon a review conducted pursuant to subsection (4) of
this section, the department determines that a mandatory
greenhouse gas emissions limit has been established pursuant to
state or federal law, the department shall issue a report to the
appropriate legislative committees of the Legislative Assembly
stating which portions, if any, of the greenhouse gas emissions
standard are no longer necessary as a matter of state law. + }
SECTION 4. { + (1)(a) An electric company or electricity
service supplier may not enter into a long-term financial
commitment unless the baseload electricity acquired under the
commitment is produced by a generating facility that complies
with a greenhouse gas emissions standard established under
section 2 of this 2009 Act.
(b) A generating facility complies with the greenhouse gas
emissions standard established under section 2 of this 2009 Act
if the rate of emissions of the facility does not exceed the
emissions standard.
(c) In determining whether a generating facility complies with
the emissions standard, the total emissions associated with
producing baseload electricity at the generating facility are
included in determining the rate of emissions of greenhouse
gases. The total emissions associated with producing electricity
at the generating facility do not include emissions associated
with transportation, fuel extraction or other life-cycle
emissions associated with obtaining the fuel for the facility.
(2) Notwithstanding subsection (1) of this section, the
emissions standard does not apply to greenhouse gas emissions
produced by a generating facility owned by an electric company or
electricity service supplier or contracted through a long-term
financial commitment if the emissions:
(a) Come from a facility powered exclusively by renewable
energy sources described in ORS 469A.025;
(b) Come from a cogeneration facility in this state that is
fueled by natural gas, synthetic gas, distillate fuels, waste gas
or a combination of these fuels, and that is producing energy, in
service for tax purposes, commercially operable, or in rates as
of July 1, 2010, until the facility is subject to a new long-term
financial commitment; or
(c) Come from a generating facility that has in place a plan,
as determined by the Public Utility Commission, to be a
low-carbon emissions resource, pursuant to sufficient technical
documentation, within seven years of commencing plant operations.
(3) Notwithstanding section 2 of this 2009 Act and subsection
(1) of this section, the commission may exempt a long-term
Enrolled Senate Bill 101 (SB 101-B) Page 4
financial commitment by an electric company or an electricity
service supplier from the greenhouse gas emissions standard if
the commission finds that the commitment is a necessary and
prudent response to:
(a) Unanticipated electricity system reliability needs; or
(b) Catastrophic events or threat of significant financial harm
that may arise from unforeseen circumstances.
(4) Notwithstanding subsection (1) of this section, an electric
company may enter into a long-term financial commitment that does
not meet the emissions standard established under section 2 of
this 2009 Act if the electric company does not seek recovery of
the costs in retail sales in this state.
(5) The commission by rule shall establish:
(a) Standards for identifying contracts for electricity for
which the emissions cannot readily be determined with any
specificity; and
(b) Emissions to be attributed to such contracts for purposes
of determining compliance with the emissions standard established
under section 2 of this 2009 Act. + }
SECTION 5. { + (1)(a) A governing board of a consumer-owned
utility may not enter into a long-term financial commitment
unless the baseload electricity acquired under the commitment is
produced by a generating facility that complies with a greenhouse
gas emissions standard established under section 3 of this 2009
Act.
(b) A generating facility complies with the greenhouse gas
emissions standard established under section 3 of this 2009 Act
if the rate of emissions of the facility does not exceed the
emissions standard.
(c) In determining whether a generating facility complies with
the emissions standard, the total emissions associated with
producing baseload electricity at the generating facility shall
be included in determining the rate of emissions of greenhouse
gases. The total emissions associated with producing electricity
at the generating facility do not include emissions associated
with transportation, fuel extraction or other life-cycle
emissions associated with obtaining the fuel for the facility.
(2) Notwithstanding subsection (1) of this section, the
emissions standard does not apply to greenhouse gas emissions
produced by a generating facility owned by a consumer-owned
utility or contracted through a long-term financial commitment if
the emissions:
(a) Come from a facility powered exclusively by renewable
energy sources described in ORS 469A.025;
(b) Come from a cogeneration facility in this state that is
fueled by natural gas, synthetic gas, distillate fuels, waste gas
or a combination of these fuels, and that is producing energy, in
service for tax purposes, commercially operable, or in rates as
of July 1, 2010, until the facility is subject to a new long-term
financial commitment; or
(c) Come from a generating facility that has in place a plan to
be a low-carbon emission resource, as determined by the State
Department of Energy, pursuant to sufficient technical
documentation, within seven years of commencing plant operations.
(3) The governing board may provide an exemption for an
individual generating facility from the emissions performance
standard to address:
(a) Unanticipated electricity system reliability needs;
(b) Catastrophic events or threat of significant financial harm
that may arise from unforeseen circumstances; or
Enrolled Senate Bill 101 (SB 101-B) Page 5
(c) Long-term financial commitments between members of a joint
operating entity recognized under federal law or the joint
operating entity's predecessor organization, or with the joint
operating entity for a baseload resource that the consumer-owned
utility had an ownership interest in prior to July 1, 2010.
(4) A governing board shall report to the consumer-owned
utility's customers or members and to the State Department of
Energy information on any case-by-case exemption from the
emissions performance standard granted by the governing board.
(5) For purposes of sections 1 to 6 of this 2009 Act, a
long-term financial commitment for a consumer-owned utility does
not include agreements to purchase electricity from the
Bonneville Power Administration.
(6) The department by rule shall establish:
(a) Standards for identifying contracts for electricity for
which the emissions cannot readily be determined with any
specificity; and
(b) Emissions to be attributed to such contracts for purposes
of determining compliance with the emissions standard established
under section 3 of this 2009 Act. + }
SECTION 6. { + (1)(a) The Public Utility Commission may not
acknowledge in an integrated resource plan, or allow in customer
rates, the costs of a long-term financial commitment by an
electric company or by an electricity service supplier unless the
baseload electricity proposed to be acquired under the commitment
is produced by a generating facility that complies with the
greenhouse gas emissions standard established under section 2 of
this 2009 Act.
(b) The commission shall revoke the certification under ORS
757.649 of an electricity service supplier entering into a
long-term financial commitment to serve customers in this state
if baseload electricity acquired under the commitment is produced
by a generating facility that does not comply with the greenhouse
gas emissions performance standard established under section 2 of
this 2009 Act.
(2) Pursuant to ORS 756.040, the commission shall adopt rules
for the implementation of this section.
(3) Within 90 days of application by an electric company or
electricity service supplier, the commission shall determine
whether the electric company's or electricity service supplier's
proposal to enter into a long-term financial commitment complies
with the greenhouse gas emissions standard established under
section 2 of this 2009 Act. The commission may not decide in a
proceeding under this subsection issues involving the actual
costs to construct and operate the selected resource, cost
recovery or other issues reserved by the commission for decision
in a general rate case or other proceeding for recovery of the
resource or contract costs. + }
SECTION 7. ORS 469.320 is amended to read:
469.320. (1) Except as provided in subsections (2) and (5) of
this section, no facility shall be constructed or expanded unless
a site certificate has been issued for the site thereof in the
manner provided in ORS 469.300 to 469.563, 469.590 to 469.619,
469.930 and 469.992. No facility shall be constructed or operated
except in conformity with the requirements of ORS 469.300 to
469.563, 469.590 to 469.619, 469.930 and 469.992.
(2) A site certificate is not required for:
(a) An energy facility for which no site certificate has been
issued that, on August 2, 1993, had operable electric generating
Enrolled Senate Bill 101 (SB 101-B) Page 6
equipment for a modification that uses the same fuel type and
increases electric generating capacity, if:
(A) The site is not enlarged; and
(B) The ability of the energy facility to use fuel for
electricity production under peak steady state operating
conditions is not more than 200 million Btu per hour greater than
it was on August 2, 1993, or the energy facility expansion is
called for in the short-term plan of action of an energy resource
plan that has been acknowledged by the Public Utility Commission
of Oregon.
(b) Construction or expansion of any interstate natural gas
pipeline or associated underground natural gas storage facility
authorized by and subject to the continuing regulation of the
Federal Energy Regulatory Commission or successor agency.
(c) An energy facility, except coal and nuclear power plants,
if the energy facility:
(A) Sequentially produces electrical energy and useful thermal
energy from the same fuel source; and
(B) Under { - normal - } { + average annual + } operating
conditions, has a
{ - useful thermal energy output of no less than 33 percent of
the total energy output or the - } { + nominal electric
generating capacity:
(i) Of less than 50 megawatts and the + } fuel chargeable to
power heat rate value is not greater than 6,000 Btu per kilowatt
hour { - . - } { + ;
(ii) Of 50 megawatts or more and the fuel chargeable to power
heat rate value is not greater than 5,500 Btu per kilowatt hour;
or
(iii) Specified by the Energy Facility Siting Council by rule
based on the council's determination relating to emissions of the
energy facility. + }
(d) Temporary storage, at the site of a nuclear-fueled thermal
power plant for which a site certificate has been issued by the
State of Oregon, of radioactive waste from the plant.
(e) An energy facility as defined in ORS 469.300 (11)(a)(G), if
the plant also produces a secondary fuel used on site for the
production of heat or electricity, if the output of the primary
fuel is less than six billion Btu of heat a day.
(f) An energy facility as defined in ORS 469.300 (11)(a)(G), if
the facility:
(A) Exclusively uses biomass, including but not limited to
grain, whey, potatoes, oil seeds, waste vegetable oil or
cellulosic biomass, as the source of material for conversion to a
liquid fuel;
(B) Has received local land use approval under the applicable
acknowledged comprehensive plan and land use regulations of the
affected local government and the facility complies with any
statewide planning goals or rules of the Land Conservation and
Development Commission that are directly applicable to the
facility;
(C) Requires no new electric transmission lines or gas or
petroleum product pipelines that would require a site certificate
under subsection (1) of this section;
(D) Produces synthetic fuel, at least 90 percent of which is
used in an industrial or refueling facility located within one
mile of the facility or is transported from the facility by rail
or barge; and
(E) Emits less than 118 pounds of carbon dioxide per million
Btu from fossil fuel used for conversion energy.
Enrolled Senate Bill 101 (SB 101-B) Page 7
(g) A standby generation facility, if the facility complies
with all of the following:
(A) The facility has received local land use approval under the
applicable acknowledged comprehensive plan and land use
regulations of the affected local government and the facility
complies with all statewide planning goals and applicable rules
of the Land Conservation and Development Commission;
(B) The standby generators have been approved by the Department
of Environmental Quality as having complied with all applicable
air and water quality requirements. For an applicant that
proposes to provide the physical facilities for the installation
of standby generators, the requirement of this subparagraph may
be met by agreeing to require such a term in the lease contract
for the facility; and
(C) The standby generators are electrically incapable of being
interconnected to the transmission grid. For an applicant that
proposes to provide the physical facilities for the installation
of standby generators, the requirement of this subparagraph may
be met by agreeing to require such a term in the lease contract
for the facility.
(3) The Energy Facility Siting Council may review and, if
necessary, revise the fuel chargeable to power heat rate value
set forth in subsection (2)(c)(B) of this section. In making its
determination, the council shall ensure that the fuel chargeable
to power heat rate value for facilities set forth in subsection
(2)(c)(B) of this section remains significantly lower than the
fuel chargeable to power heat rate value for the best available,
commercially viable thermal power plant technology at the time of
the revision.
(4) Any person who proposes to construct or enlarge an energy
facility and who claims an exemption under subsection (2)(a),
(c), (f) or (g) of this section from the requirement to obtain a
site certificate shall request the Energy Facility Siting Council
to determine whether the proposed facility qualifies for the
claimed exemption. The council shall make its determination
within 60 days after the request for exemption is filed. An
appeal from the council's determination on a request for
exemption shall be made under ORS 469.403, except that the scope
of review by the Supreme Court shall be the same as a review by a
circuit court under ORS 183.484. The record on review by the
Supreme Court shall be the record established in the council
proceeding on the exemption.
(5) Notwithstanding subsection (1) of this section, a separate
site certificate shall not be required for:
(a) Transmission lines, storage facilities, pipelines or
similar related or supporting facilities, if such related or
supporting facilities are addressed in and are subject to a site
certificate for another energy facility;
(b) Expansion within the site or within the energy generation
area of a facility for which a site certificate has been issued,
if the existing site certificate has been amended to authorize
expansion; or
(c) Expansion, either within the site or outside the site, of
an existing council certified surface facility related to an
underground gas storage reservoir, if the existing site
certificate is amended to authorize expansion.
(6) If the substantial loss of the steam host causes a facility
exempt under subsection (2)(c) of this section to substantially
fail to meet the exemption requirements under subsection (2)(c)
of this section, the electric generating facility shall cease to
Enrolled Senate Bill 101 (SB 101-B) Page 8
operate one year after the substantial loss of the steam host
unless an application for a site certificate has been filed in
accordance with the provisions of ORS 469.300 to 469.563.
(7) As used in this section:
(a) 'Standby generation facility' means an electric power
generating facility, including standby generators and the
physical structures necessary to install and connect standby
generators, that provides temporary electric power in the event
of a power outage and that is electrically incapable of being
interconnected with the transmission grid.
(b) 'Total energy output' means the sum of useful thermal
energy output and useful electrical energy output.
(c) 'Useful thermal energy' means the verifiable thermal energy
used in any viable industrial or commercial process, heating or
cooling application.
(8) Notwithstanding the definition of 'energy facility' in ORS
469.300 (11)(a)(J), an electric power generating plant with an
average electric generating capacity of less than 35 megawatts
produced from wind energy at a single energy facility or within a
single energy generation area may elect to obtain a site
certificate in the manner provided in ORS 469.300 to 469.563,
469.590 to 469.619, 469.930 and 469.992. An election to obtain a
site certificate under this subsection shall be final upon
submission of an application for a site certificate.
SECTION 8. { + The Public Utility Commission and the State
Department of Energy shall adopt rules as necessary to implement
sections 1 to 6 of this 2009 Act. + }
SECTION 9. { + (1) The Public Utility Commission shall develop
estimates of the rate impacts for electric companies and natural
gas companies to meet the following alternative greenhouse gas
emission reduction goals for 2020:
(a) Ten percent below 1990 levels, as specified in ORS
468A.205; and
(b) Fifteen percent below 2005 levels.
(2) The commission shall submit a report presenting the
estimates and explaining the analysis used to develop the
estimates to the appropriate interim committee of the Legislative
Assembly prior to November 1 of each even-numbered year. + }
SECTION 10. { + Notwithstanding any other law limiting
expenditures, the limitation on expenditures established by
section 1, chapter ___, Oregon Laws 2009 (Enrolled House Bill
5013), for the biennium beginning July 1, 2009, as the maximum
limit for payment of expenses from fees, moneys or other
revenues, including Miscellaneous Receipts, but excluding lottery
funds and federal funds, collected or received by the State
Department of Energy, is increased by $337,229, for the purpose
of carrying out sections 1 to 6, 8 and 9 of this 2009 Act and the
amendments to ORS 469.320 by section 7 of this 2009 Act. + }
SECTION 11. { + Notwithstanding any other law limiting
expenditures, the limitation on expenditures established by
section 1 (1), chapter 116, Oregon Laws 2009 (Enrolled House Bill
5043), as the maximum limit for payment of expenses from fees,
moneys or other revenues, including Miscellaneous Receipts, but
excluding lottery funds and federal funds, collected or received
by the Public Utility Commission of Oregon for the utility
program, is increased by $141,361, for the purpose of carrying
out sections 1 to 6, 8 and 9 of this 2009 Act and the amendments
to ORS 469.320 by section 7 of this 2009 Act. + }
SECTION 12. { + Section 9 of this 2009 Act is repealed on
January 2, 2020. + }
Enrolled Senate Bill 101 (SB 101-B) Page 9
SECTION 13. { + Sections 1 to 6 of this 2009 Act and the
amendments to ORS 469.320 by section 7 of this 2009 Act become
operative July 1, 2010. + }
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Passed by Senate June 26, 2009
...........................................................
Secretary of Senate
...........................................................
President of Senate
Passed by House June 29, 2009
...........................................................
Speaker of House
Enrolled Senate Bill 101 (SB 101-B) Page 10
Received by Governor:
......M.,............., 2009
Approved:
......M.,............., 2009
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2009
...........................................................
Secretary of State
Enrolled Senate Bill 101 (SB 101-B) Page 11