Oregon PUC Re-opens New Resource Procurement Docket Email This Story January 21, 2011
The Oregon PUC has re-opened Docket UM 1182 to further examine issues related to
the competitive bidding guidelines for procurement of supplies for the investor-owned
In a January 3 order, the PUC said that it, "accept[s] the premise that a bias exists
in the utility resource procurement process that favors utility-owned resources over
PPAs," citing the fact that utilities forego earning a return on ratebase when electing
a PPA, and also suffer credit ratings impacts due to imputed debt under a PPA.
However, "even after this [previous] lengthy proceeding, we know little about the
scope and impact of this bias. We have identified its existence, but are not able
to quantify its significance. We do not know whether the current regulatory process
has, in fact, failed to prevent the utilities from acquiring higher cost, utility-owned
resources," the PUC said.
Two proposals previously before the PUC would have offered various monetary incentives
for utilities to enter into PPAs to remove the self-build bias.
The PUC invited comment on whether the role of the independent evaluator, currently
limited to reviewing a short list of resource options, should be expanded by retaining
the use of independent evaluator through the utility's negotiations and final resource
selections to further address the utility preference to build its own resources.
The PUC also, "want[s] a more comprehensive accounting and comparison of all of the
relevant risks [of various resource options], including consideration of construction
risks, operation and performance risks, and environmental regulatory risks," and
invited comments on measuring such risk.
Finally, the PUC asked whether the current 100 kW cutoff in triggering the requirement
for an RFP for a new resource need should be lowered.
Retail Energy Supply Association President David Fein praised the PUC's decision
to re-open the docket, stating, "Removing the monopoly utility from the generation
function is a necessary first step toward the development of a competitive electricity
market in which businesses compete for Oregon customers --spurring innovation, fostering
the development of tailored and renewable energy products, and ultimately putting
downward pressure on price."