Separate Avoided Cost for Renewable Qualifying Facilities in Oregon

Qualifying facilities (QFs) sell power to Oregon utilities at a per-megawatt-hour rate equal to the purchasing utility’s generic avoided cost.  The Oregon Public Utility Commission (OPUC) recently declared in Order No. 11-505 that Oregon’s two largest electric utilities, Pacific Power and Portland General Electric, must create a new renewable avoided cost rate.  The utility’s renewable avoided cost rate will be available to renewable QFs selling in Oregon and will be based on the cost to satisfy the state’s renewable portfolio standard.

This change benefits renewable QFs by giving them the right to choose between the old generic rate and the new renewable avoided cost rate.  One catch for QFs: if they elect the renewable avoided cost rate, the utility will retain Renewable Energy Certificates (RECs) during periods of renewable resource sufficiency.

This development is one more consequence of the Federal Energy Regulatory Commission having explicitly approved the use by states of separate avoided cost rates for separate classes resources under similar circumstances.  See California PUC, 132 FERC 61,047 (2010).

Order No. 11-505 was issued by the OPUC on December 13, 2011 in Docket No. UM 1396.

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