Oregon Climate Change Regulatory Activities and Policy Initiatives Bill Drumheller -- Oregon Department of Energy University of Oregon School of Law Climate Change Symposium October 19, 2007

2 The Challenge

3 Oregon First State to Regulate Carbon Dioxide In 1997, as part of HB 3283, the Oregon legislature gave the Energy Facility Siting Council the authority to set carbon dioxide emissions standards for new energy facilities. For base load gas plants and non-base load plants, the standard sets the net emissions rate at lb. CO 2 per kilowatt-hour. For non-generating facilities, the rate is lb. CO 2 per horsepower-hour. An energy facility siting applicant has two alternatives for meeting the CO 2 standard through offset projects: 1) it may implement projects directly or through a third party; or, 2) it may instead use the “monetary path” and pay the Climate Trust $1.27 per short ton to offset emissions for the applicant.

4 West Coast Governors’ Global Warming Initiative In September of 2003 the Governors of Oregon, Washington, and California agreed to work together on climate change policies. In November of 2004 the Governors approved 36 recommendations in five areas that were jointly developed by the three states. This regional work led to the next set of regulatory actions by the State of Oregon.

5 Resulting Regulations Clean Cars: Oregon adopts California’s greenhouse gas tailpipe emission standards in June When the rules take full effect in model year 2016 new vehicles will emit 30 percent less greenhouse gas emissions. Appliance Efficiency Standards: Oregon (in line with a multi-state effort) now regulates many appliance product categories for which the federal government has no efficiency standard. (2005 and 2007 legislation)

6 HB 3543 Legislation Oregon greenhouse gas emission goals put into state law in the 2007 session. –Arrest growth of emissions by –10 percent below 1990 levels by –75 percent below 1990 levels by Also created the Global Warming Commission and the Oregon Climate Change Research Institute. Focuses on mitigation and adaptation.

7 Secondary Impacts of Additional Regulation Climate change impacts were a key concern in 2007 session for energy legislation not solely focused on climate change. Renewable Portfolio Standard (RPS) has trigger clause in which smaller utilities not subject to RPS lose that exemption if they buy into or help build new coal energy plants. Renewable Fuel Standard (RFS) won’t count biodiesel made from palm oil due to deforestation issues in tropical rainforests.

8 Mandatory Reporting Next phase of regulatory activity around climate change and greenhouse gases. The Governor asked the Environmental Quality Commission (EQC) in July of 2007 to consider a rule mandating the reporting of greenhouse gas emissions from sources. Oregon DEQ is just beginning the public process of developing that rule for eventual consideration by the Oregon EQC.

9 Additional Climate Change Initiatives Climate Change Integration Group Carbon Allocation Task Force State Agency Greenhouse Gas Inventory Western Climate Initiative The Climate Registry Western Public Utility Commissions' Joint Action Framework On Climate Change

10 Carbon Allocation Task Force (CATF) Devised a “load-based” cap-and-trade system for greenhouse gas emissions in Oregon. “Load based” is key – like California, it would capture CO 2 from electricity imports. Concluded that a “load-based carbon allowance standard for Oregon” is feasible, and the group outlined such a program. Presented their “median proposal” to the Governor in January of Drafted as HB 3545 in 2007 session, but did not go to vote.

11 Western Public Utility Commissions’ Joint Action Framework On Climate Change Review best practices for energy efficiency and pursue joint opportunities to identify and secure cost-effective conservation. Develop policies to recognize energy efficiency as an energy resource. Review best practices for demand response and develop joint activities to increase beneficial demand response capability. Explore ways to remove barriers to the development of advanced, low- carbon technologies for fossil fuel-powered generation capable of capturing and sequestering carbon dioxide emissions. Explore the development and implementation of greenhouse gas emissions standards for new long-term power supplies. Examine opportunities to further support and implement renewable energy development to serve the West Coast states, including policies to encourage the development of transmission. Commit to outreach with neighboring states.

12 The Climate Registry Allows entities to report their greenhouse gas (ghg) emissions to common platform. Common protocols for quantification of ghg emissions. A “ton is a ton”. Will be basis for OR mandatory reporting. Plus all of Canada and Sonora, Mexico Oregon participates on protocols committee, and both the protocols and software technical working groups.

13 More Information Oregon Climate Change Portal Western Climate Initiative The Climate Registry Bill Drumheller, Oregon Department of Energy (503) or