Hundreds of communities around the country have committed financial resources to reduce greenhouse gas emissions through energy efficiency improvements and through purchases of renewable fueled electricity from their local utilities. A new trend appears to be emerging as part of these efforts – some communities are investigating direct ownership of energy projects and recent actions in Portland, Oregon illustrate this nicely.
In 2001, Portland adopted a Local Action Plan on Global Warming and the Portland Office of Sustainable Development (OSD) began examining options to meet 100 percent of its electricity needs from renewable energy sources. At their November 3, 2004 meeting, the Portland City Council accepted a $25,000 matching grant from the Bullitt Foundation to fund an outside consultant, Global Energy Concepts, to help analyze ownership options including direct municipal investment in a wind generation facility. Unlike some other cities which have implemented renewable power purchases, Portland does not have its own municipal electric utility. Instead, the city is currently a retail power customer of Portland General Electric and Pacific Power & Light. The city hopes that the wind power can begin delivering electricity by early 2007, contribute to a dramatic reduction in greenhouse gases and provide a stable long term price for the city’s electricity.
The OSD gave an update on the project at the December 15, 2004 city council meeting. A Request for Information (RFI) was released on December 8, 2004 with responses due by February 2, 2005. The RFI is quite detailed and interested people can download a copy after a simple registration with the OSD at this web site: Portland Bureau of Purchases [first time users will need to click the Bid Opportunities link > then select the link for First-Time User Registration and follow instructions]. Once the responses to the RFI are examined, the OSD plans to issue a formal Request for Proposals by early March 2005.
Portland’s Expectations and Goal of 100 percent electricity from new renewable energy projects located in Oregon by 2010
- Incur no first-year cost premium over Portland General Electric cost-of-service rates
- Support the City’s goals of reducing CO2 emissions and supporting a sustainable energy economy
- Provide predictable, stable prices for electricity over the long term
- Stimulate economic growth for the renewable energy industry in Portland and rural Oregon
- Stimulate new renewable power project development
The City is requesting information from interested parties detailing the costs and benefits of the following ownership options:
- City ownership of the project(s)
- Private ownership of the project(s), with subsequent City ownership
- Products supplied by Electricity Service Suppliers (ESS)
- Tariff products supplied by the incumbent utilities, Portland General Electric and Pacific Power & Light
- Long-term power purchase agreements whereby the City would buy energy from new renewable energy projects
- Contracts for differences supported by new renewable power projects
- Other innovative approaches
The City’s current electrical load is approximately 139,000 MWh per year (about 16 MWa average capacity) and is expected to increase to approximately 160,000 MWh per year (18 MWa) by 2008. The city has more than 800 electric accounts that cost the city about $13 million annually. The city estimates an average cost (including demand charges and other customer service fees) of nearly 9 cents per kilowatt-hour (kWh). The city expects that they will find through the RFI process that the cost of the new renewable electricity is very near or lower than the cost of power that they currently get from the distribution utilities. Democratic Energy will be tracking developments as they move forward and we hope that other communities will be monitoring these results.