Oregon PUC Re-opens New Resource Procurement Docket

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 utilities.

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."