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Climate Policy

2.1    Climate Policy Introduction and Policy Language from SD15

EWEB Climate Change Policy SD15 – Climate Policy Section

The Board authorizes, delegates, and directs the General Manager to participate in local, state, and regional efforts to encourage, develop and enact measures to minimize and/or mitigate GHG emissions that contribute to climate change. Consistent with Board Policy (GP13), prior to legislative sessions the Board develops and guides EWEB’s positions relative to legislation, including those related to climate and environmental policy supporting this directive.

Climate policy passed at the federal, regional, state, and local levels provides the setting for our work on climate change. Much is evolving at these various levels. EWEB actively engages in this area to meet and go beyond our compliance obligations, educate policymakers about the intricacies of the electric power and water sectors, and partner with key stakeholders to build the future that we want to see based on the values of our customers.

EWEB’s Climate Change Policy SD15 highlights the importance of participating in policy discussions at various levels to minimize and mitigate GHG emissions. This chapter seeks to outline a high-level summary of the activities happening at various levels of government from the federal to the local level, while providing readers with relevant links and resources for additional reading as well as describing the impacts to EWEB.

Additionally, EWEB seeks to articulate guiding principles that staff aim to follow in their work. Principles can relate to any topic where EWEB invests effort, staff time, or resources. Principles on topics related to climate change will be included in this chapter of the Guidebook. Focus areas for EWEB Principles can range from policy advocacy work, program development, or even research and application of new technologies. The last section of this chapter seeks to publish these established principles for transparency and ease of reference.

Content currently included in v2.0:

  • Policy summaries and links for climate initiatives at the federal, regional, state, and local levels
    • Global/Federal: The Paris Accord, BIL/IIJA, IRA, SEC Enforcement Task Force on Climate & ESG
    • Regional: Western Energy Imbalance Market (EIM); Extended Day Ahead Market (EDAM); Western Regional Adequacy Program (WRAP); Western Climate Initiative (WCI); Regional Greenhouse Gas Initiative (RGGI); Regional Climate Forecasts and Analyses
    • California: AB-32 Cap-and-trade; Low Carbon Fuels Standard; SB-100 100 Percent Clean Energy Act; Tailpipe Emissions Standards; California Independent System Operator (CAISO)
    • Washington: I-937 Energy Independence Act, Clean Energy Transformation Act (CETA), Climate Commitment Act (CCA), Clean Fuels Standard
    • Oregon: Executive Order 20-04; Clean Electricity Standard; Clean Fuels Program; Clean Electricity and Coal Transition Plan; Renewable Portfolio Standard; Emissions Performance Standard
    • Eugene: Climate Recovery Ordinance; CAP 2.0
  • Principles to guide EWEB investment of staff time and financial resources:
    • Carbon Policy & GHG Reduction Principles
    • Distributed Generation Principles
    • Green Hydrogen Principles
    • EWEB Rate Design Principles

Content planned for future Guidebook Versions:

  • Additional details about federal funding opportunities under the BIL/IIJA and IRA
  • Additional principles to guide EWEB investment of staff time and financial resources

Explore this webpage: 2.2 Global / Federal Initatives | 2.3 Regional Initiatives | 2.4 State of Oregon Initatives | 2.5 Local Eugene Intiatives | 2.6 EWEB's Climate Guidebook Principles to Guide Policy and Programs

2.2    Global / Federal Initiatives

2.2.1     Global Efforts & the Paris Accord

The past three decades have produced a series of international multilateral treaties, agreements, and frameworks on climate change policy as part of a worldwide effort to reduce GHG emissions and the impacts of global climate change. These international efforts have been based on the research produced by the Intergovernmental Panel on Climate Change (IPCC), the United Nations body for assessing the science related to climate change that represents 195 member organizations. 

The first notable and binding of these international agreements was the Kyoto Protocol, signed in 1997 and building upon the 1992 United Nations Framework Convention on Climate Change (UNFCCC). The Protocol sought to reduce GHG emissions in the atmosphere to “a level that would prevent dangerous anthropogenic interference with the climate system”. There were two compliance periods. The first ran from 2008-2012 and the second from 2012-2020. As of 2020, the United States was the only signatory that did not ratify the Protocol. Currently there are 192 parties to the Kyoto Protocol.  

Most recently, the Paris Agreement, an international treaty intended to keep the rise in mean global temperature to well below 2 °C (3.6 °F) above pre-industrial levels, and preferably limit the increase to 1.5 °C (2.7 °F), was signed in 2016. It is estimated that to stay below 1.5 °C of global warming, global emissions need to be cut by roughly 50% by 2030. As of 2023, 195 members of the UNFCCC are parties to the agreement. The United States signed the Paris Agreement in 2016, subsequently withdrew in 2020, and rejoined in 2021. Recently enacted federal GHG investments (see U.S. Federal Policy section) have lent credibility to the U.S. readmission to the treaty and its leadership role in global efforts to address climate change.

While these international agreements are notable progress in an international response to global climate change, they are also generally viewed by experts as not binding with sufficient rigor and not always practicable (i.e., some countries lack sufficient financing capability to reach targets) to the extent required to ensure targets are reached. Further global coordination and commitment to GHG reduction efforts is essential.

Why does this matter to EWEB?

Since current international agreements are nonbinding, direct impacts on EWEB will be minimal. However, if world leaders continue to delay on robust climate action, the resulting physical changes to the climate will impact every community around the globe, including EWEB’s. Federal efforts in the United States to demonstrate commitment to the Paris Accord have led to new federal investments in funding for programs to reduce emissions (Inflation Reduction Act and Infrastructure Investment in Jobs Act). These grant programs are available to groups like EWEB.

Links and Relevant Resources:

 

The U.S. Capitol building. Image by Trev Adams from Pexels.

2.2.2     U.S. Federal Policy

At a national level, the United States has recently made a major change in its approach to national climate policy. This change comes a decade after the U.S. House of Representatives approved a national emissions trading program, the American Clean Energy and Security Act of 2009, a bill that then languished in the U.S. Senate, failing to become law. After subsequent repeated failures of national market-based emissions trading programs in Congress, national climate policy efforts have pivoted away from market-based emission trading programs towards investment and regulatory efforts. In particular, a clean energy investment approach to national GHG reduction policy has been politically successful recently as evidenced by key climate provisions advanced in the passage of the Infrastructure Investment and Jobs Act (IIJA) in Nov. 2021 and the Inflation Reduction Act (IRA) in Aug. 2022.

National regulatory efforts to cap emissions may yet be forthcoming but face significant hurdles, given that such efforts would likely require 60 votes to overcome a filibuster in the U.S. Senate. In the meantime, using the national budget reconciliation process, which only requires a simple majority vote in Congress, the federal government has enacted provisions in IIJA and IRA that are estimated by Princeton University to reduce national GHG emissions by at least 40% relative to 2005 levels over the next decade.

Simultaneously, in the U.S. investors are demanding disclosure of climate and environmental, social and governance (ESG) information.  The Securities and Exchange Commission (SEC) has proposed a new climate disclosure rule.  Many companies and governments currently disclose climate, water, and forestry risks and impacts to investors via CDP, a nonprofit organization that runs a global disclosure system.

Why does this matter to EWEB?

The IIJA and IRA are poised to have profound impacts on the clean energy economy. Energy producers – such as developers and owners of wind farms and other renewable energy generators – will be able to access tax credits leading to greater investment in renewable energy and lower prices. Energy consumers – such as EWEB customers – will be able to take advantage of rebates and incentives to install high-efficiency electric heat pumps and to buy electric vehicles, among other electric products.  Due to this legislation, it is expected that renewable energy will be more abundant and cheaper for EWEB to procure, while demand for electricity will be higher as EWEB’s customers continue to electrify.

Links and Relevant Resources:

2.3    Regional Initiatives

2.3.1     The U.S. Electricity Grids

People often refer to “the electricity grid” in the United States as if it were a single network of generating resources and infrastructure to deliver electricity from where it is produced to where it is consumed. In reality, in North America, there are four grids, or major electric system networks, as shown in the map below. The Western Interconnection (of which EWEB is part) and the Eastern Interconnection are the two major networks.  Texas and Quebec are served by two smaller networks. The Western and Eastern Interconnections are divided by the Rocky Mountains and very little, if any, electricity is passed between them.

Four North American Electricity Interconnections Map. Source: WECC.org Figure 3: Four North American Electricity Interconnections Map. Source: WECC.org

Electricity in the United States is managed under the Federal Energy Regulatory Commission (FERC). FERC is an independent agency responsible for regulating the interstate transmission of electricity, natural gas, and oil.  The North American Electric Reliability Corporation (NERC) is a nonprofit international regulatory authority whose mission is to assure the effective and efficient reduction of risks to the reliability and security of the grid. FERC and Canadian governmental agencies oversee NERC’s operations.

The Western Interconnect includes two Canadian provinces, 14 Western U.S. states, and northern Baja Mexico. It has several unique characteristics that distinguish it from the other North American interconnects. Within the Western Interconnect, 87% of land is public or protected compared to only 27% within the Eastern Interconnect.  In the West, we also have longer transmission lines compared to the East that connect remote electricity generating facilities to population centers. This pattern allows the West to take advantage of different supply-and-demand patterns, and different renewable energy sources, as electricity is transported over long distances.   

Another difference between the East and West has to do with how electricity supply and demand is managed. The map from The U.S. Energy Information Administration (EIA) shows the balancing authorities within each of the U.S. interconnections. Per EIA, a Balancing Authority is an entity that, “ensures, in real time, that power system demand and supply are balanced. This balance is needed to maintain the safe and reliable operation of the power system. If demand and supply fall out of balance, local or even wide-area blackouts can result.” All the regional transmission organizations (RTOs) or independent system operators (ISOs) in the U.S. also function as balancing authorities.

  • The Eastern Interconnection includes 36 balancing authorities, of which five are in Canada and the rest are in the United States.
  • ERCOT, or the Electric Reliability Council of Texas, contains one balancing authority.
  • The Western Interconnection has 37 balancing authorities, including two in Canada, one in Mexico, and the remainder located in the U.S.

Map of US Electric Power Regions and Balancing Authorities, Courtesy of US Energy Information Administration (2023) Figure 4: Map of US Electric Power Regions and Balancing Authorities, Courtesy of US Energy Information Administration (2023)

Why does this matter to EWEB?

EWEB is part of the Western Interconnection and therefore the electricity EWEB delivers to customers comes from this large, subnational grid. In some circumstances, it makes sense to calculate the carbon intensity of electricity based on the overall makeup of this large Western grid, since electrons flow freely across it. In other circumstances, it makes more sense for EWEB to calculate the carbon intensity of electricity based just on the energy EWEB generates or buys.

Links and Relevant Resources:

  

2.3.2     Regionalization and Organized Markets

While approximately 60% of the U.S. electric supply is managed by an Independent System Operator (ISO) or a Regional Transmission Organization (RTO), Pacific Northwest utilities do not presently participate in an organized market, except for those utilities that voluntarily participate in the real-time Western Energy Imbalance Market (EIM).

Map of US Independent System Operator / Regional Transmission Organizations, Sourced from US Energy Information Administration (2023) Figure 5: Map of US Independent System Operator / Regional Transmission Organizations, Sourced from US Energy Information Administration (2023)

Currently, most electricity market transactions in the Pacific Northwest are conducted bilaterally (1:1) between utilities, independent power producers, and marketers. Similarly, the Pacific Northwest’s transmission system is operated by individual transmission owners, requiring projects to pay separate charges (often referred to as “wheeling” charges) to deliver power across each transmission system. There are approximately three dozen balancing authorities (BAs) currently operating across the Western United States, with each responsible for balancing supply and demand within their footprint. Over the last 25 years, the region has considered several utility-led initiatives to coordinate transmission planning and operations or to centralize electricity market functions. The only initiative that has been implemented to date is the Western EIM.

There are multiple regional efforts and initiatives underway past and present that endeavor to fulfill multiple functions that an organized/centralized market can provide:

  • Shared transmission planning by a single entity
  • Single transmission provider and tariff administrator
  • Single transmission operator
  • Single Balancing Authority
  • Common Resource Adequacy Standard
  • Market Operator: a single independent entity and centralized day ahead and/or within-hour optimization and dispatch with reliability

The Western EIM has achieved success with a low-cost, voluntary option using available and free transmission and leveraging the existing California Independent System Operator (CAISO) infrastructure. However, the Western EIM serves only a small portion of the functions that are offered by traditional ISOs and RTOs, and free transmission is not replicable in future approaches. Regional efforts to advance a Pacific Northwest organized market have been hampered by the uniqueness of the Bonneville Power Administration, statutory preference power rights for publicly owned utilities in the region, and proper valuation of hydropower resources.

Agreement on governance models and the equitable allocation of costs and benefits in an organized market is a complicated task to successfully complete. However, utilities and stakeholders continue work on initiatives such as an Extended Day Ahead Market (EDAM) through CAISO or via the Markets+ model being proposed by the Southwest Power Pool. The hope with these two different models for a day ahead market is that significant societal and environmental benefits in grid efficiency, consumer savings, and decarbonization will result from optimizing load and generation diversity over large geographical and climate footprints. Initiatives can also use the existing transmission system more efficiently and work on planning, investing, and building necessary new transmission more effectively to move energy from where it is plentiful to where it is not, at any given time.

Why does this matter to EWEB?

Organized markets or other regional initiatives could carry with them requirements around resource adequacy or the dispatch of electricity generating resources. This means that EWEB may be required to plan to have a buffer of extra energy resources available, so that shortages don’t occur during times of high demand. EWEB is tracking the evolving requirements that may arise and is accounting for them in our Integrated Resource Planning process.

Links and Relevant Resources:

 

2.3.3     Regional Climate Policies

In the absence of a national binding emissions cap and/or comprehensive regulatory emissions reduction targets, state efforts to accomplish regional equivalents have been established.  Current initiatives include the Western Climate Initiative (California, Quebec, Novia Scotia, and Washington, which is pending) and the electric sector only Regional Greenhouse Gas Initiative (RGGI) including Maine, New Hampshire, Vermont, Connecticut, New York, New Jersey, Delaware, Massachusetts, Maryland, and Rhode Island.

Why does this matter to EWEB?

Regional climate policies could affect the price of carbon and the availability of certain kinds of energy resources.

Links and Relevant Resources:

 

2.3.4     Regional Climate Forecasts & Analyses

In 1980, The Northwest Power Act authorized the states of Montana, Idaho, Washington, and Oregon to plan for the energy future of the Pacific Northwest and to balance energy requirements with environmental concerns.  The Northwest Power and Conservation Council was created to do this work.  The Act required the new organization to both create a fish and wildlife program and to develop a 20-year least-cost power plan to be updated every five years. The Power Plan includes forecasts for both future electricity demand as well as future electricity and natural gas prices. It also includes an assessment of the amount of cost-effective energy efficiency that can be acquired over the 20-year term of the plan, and an assessment of a least-cost generating resources portfolio. The plan supports Bonneville Power Administration’s resource decision-making.

Other regional organizations in the Pacific Northwest are in the process of evaluating the patchwork of state-level policies within the region and how they intersect, as well as various pathways to get to net-zero greenhouse gas emissions within the Pacific Northwest. 

Links and Relevant Resources:

 

2.3.5     Neighboring State Initiatives

2.3.5.1      California: AB 32 – Cap and Trade and Low Carbon Fuel Standard (LCFS)

Smog in Los Angeles. Image by misterfarmer from Pixabay. Smog in Los Angeles. Image by misterfarmer from Pixabay.

The California legislature passed AB 32 in 2006 requiring the California Air Resources Board (CARB) to undertake a statewide effort to reduce global warming pollution. After extensive stakeholder input, research and analysis, CARB decided that cap-and-trade regulation should be the centerpiece of the 70 separate measures used to cut GHG emissions. Other measures included statewide regulations on building, vehicle, and appliance energy efficiency standards. AB 32’s cap-and-trade rule became active Jan. 1, 2013. The sunset date of the cap-and-trade program was extended from 2020 to 2030 through the passage of AB 398 in 2017 and the program is now designed to meet a target of reducing emissions by at least 40% below 1990 levels by 2030.

The Low Carbon Fuel Standard (LCFS) was also a key measure recommended through AB 32 that began implementation in 2011. This is a program designed to decrease the carbon intensity of transportation fuels to reduce greenhouse gas emissions, reduce dependency on petroleum products, and improve air quality.  Oregon’s Clean Fuels Program is modeled after the California LCFS.

Links and Relevant Resources:

 

2.3.5.2    California: SB 100 – 100 Percent Clean Energy Act

Passed in 2018, SB 100 marks California's firm commitment to developing renewable electricity infrastructure to replace fossil fuel-powered electricity. Its two main goals are: a) by 2030, 60% of all electricity generated will be from renewable sources; b) by 2045, 100% of electricity for the whole state will be renewable. Legacy hydropower is not eligible for the 60% target, but after 2030 hydropower may qualify for the remaining 40% of SB 100 compliance.

Links and Relevant Resources:

 

2.3.5.3    California: Tailpipe Emissions Standards

Under Section 209 of the Clean Air Act (CAA), California was given the ability to apply for special waivers to apply its own emission standards for new motor vehicles, rather than the federal standard. In 1967, the California Air Resources Board (CARB) was formed and enacted the nation’s first stringent vehicle emission standards. Other states began to consider their own standards. Fearing a patchwork of differing state standards, automakers lobbied successfully for the passage of a National Emissions Standards Act that restricted states from enacting standards more restrictive than the new national standard. However, the existing stringent California standard was granted a permanent waiver; legal precedent has determined that other states may exceed federal standards if they adopt an equivalent facsimile of the California standard. Oregon is one of 16 states to adopt the California standard.

In August 2022, California set new targets requiring 100% new car sales to be zero emission by 2035. Oregon followed suit and adopted California’s rule just a few months later.

Links and Relevant Resources:

 

2.3.5.4    California: CAISO and Western Energy Imbalance Market (EIM)

In 1998, the California Legislature created the California Independent System Operator (CAISO), a nonprofit Independent System Operator (ISO) that oversees the majority of California’s bulk electric system, transmission lines, electricity market, and infrastructure planning on behalf of members, instead of individual entities. CAISO forecasts electrical demand and dispatches the lowest cost generator to meet demand while ensuring enough transmission capacity for delivery of power.

Map of active participants in Western Energy Imbalance Market Participants in the Western Energy Imbalance Market, courtest of Western EIM.

In 2014, the Western Energy Imbalance Market (EIM) was launched by the CAISO to establish lower cost and cleaner approaches to integrating fluctuations in intermittent renewable power generation into supply and demand by automatically finding lower-cost resources over broader geographical footprints to meet real-time power needs. While the CAISO was directed by the California legislature to participate in the EIM, non-CAISO entities may also join the Western EIM. PacifiCorp was the first initial volunteer, and today there are 23 EIM participants.

The Enhanced Day Ahead Market (EDAM) has been proposed and would build on the success of the EIM in pursuit of reliability, economic, and environmental benefits through increased regional coordination and resource optimization.  It would provide additional market efficiency by integrating renewable resources using day-ahead unit commitment and scheduling across a larger area. The EDAM proposal is in an advanced stage of development through a public/stakeholder process as of November 2022.

Links and Relevant Resources:

 

2.3.5.5    Washington: I 937 Energy Independence Act (EIA)

Washington State has also passed several laws in recent years to address greenhouse gas emissions and renewable energy provisions.  The Energy Independence Act (EIA), approved by the voters in 2006 through the passage of Initiative 937, requires Washington electric utilities serving at least 25,000 retail customers to use renewable energy and energy conservation. There are 18 Washington utilities subject to the EIA. They provide 80% of the electricity sold to Washington retail customers.

The EIA established a renewable portfolio standard (RPS) with renewable energy targets as a percentage of customer load. The targets increased over time, from 3% in 2012, to 9% in 2016, to 15% in 2020. Eligible resources include water, wind, solar energy, geothermal energy, landfill gas, wave, ocean or tidal power, gas for sewage treatment plants, and biodiesel fuel and biomass energy. Hydropower eligibility is limited to incremental generation due to efficiency improvements made after 1999, and the hydro project must be either owned by one of the 18 EIA-qualifying utilities or marketed by the Bonneville Power Administration.

Significantly, EIA requires that utilities must pursue all conservation that is cost-effective, reliable, and feasible. They need to identify the conservation potential over a 10-year period and set two-year targets.

Links and Relevant Resources:

 

2.3.5.6    Washington: Clean Energy Transformation Act (CETA)

SB 5116, the Clean Energy Transformation Act (CETA) was approved by the Washington Legislature in 2019, committing Washington to an electricity supply free of greenhouse gas emissions (all non-emitting electricity sources qualify) by 2045 via staged compliance:

Key elements of the Washington Clean Energy Transformation Act (CETA) Key elements of the Washington Clean Energy Transformation Act (CETA), courtesy of the Washington Department of Commerce.

  • By 2025 utilities will remove coal-fired generation from Washington's allocation of electricity.
  • By 2030, Washington retail sales will be carbon-neutral (20% of compliance can be achieved using Renewable Energy Certificates, alternative compliance payments ($100 per ton of carbon), or Energy Transformation Projects that decarbonize other sectors of the economy.
  • By 2045, Washington retail sales will be 100% renewable and non-carbon-emitting.

CETA has other notable provisions. It grants the Washington Utilities and Transportation Commission (UTC) the authority to shift investor-owned utilities from a return-on-capital model to a performance-based model. Rather than profit (and returns to shareholders) coming purely from investments in capital projects, utilities’ returns could be determined based on their performance against metrics set by the UTC, such as carbon reduction or equity. The bill also requires utilities to consider equity in electric system benefits and increase customer bill assistance.

Why does this matter to EWEB?

Initiatives in neighboring states have varying levels of impact on EWEB. Broadly speaking, policies in California and Washington can increase or decrease the availability of certain kinds of energy resources, affecting region-wide energy markets.

Links and Relevant Resources:

2.4    State of Oregon Initiatives

2.4.1       Climate Action Plan (CAP) – Executive Order 20-04

Oregon Action Plan Logo

Gov. Kate Brown signed Executive Order 20-04 on March 10, 2020, directing multiple state agencies to take actions to reduce greenhouse gas emissions to avoid the worst effects of climate change. EO 20-04 outlined State of Oregon GHG reduction goals of at least 45% below 1990 emissions levels by 2035 and at least 80% below 1990 levels by 2050.

The centerpiece of EO 20-04 was the establishment of the Climate Protection Program (CPP). The Climate Protection Program set a declining limit, or cap, on greenhouse gas emissions from fossil fuels used throughout Oregon, including diesel, gasoline, natural gas, and propane used in transportation, residential, commercial, and industrial settings. The program also regulated site-specific greenhouse gas emissions at manufacturing facilities, such as emissions from industrial processes, with a best available emissions reductions approach. Notably, the program did not apply to electricity, a decision made because the legal authority of the program did not extend to electricity imported from out of state and there would be complications from applying the program only to in-state electric generating units. The CPP required that covered entities reduce greenhouse gas emissions and allowed covered entities to comply in part with Community Climate Investments (CCIs)– contributing funds to authorized third-party entities to implement projects that reduce greenhouse gas emissions in Oregon.

In December 2023, the CPP was invalidated by the Oregon Court of Appeals due to insufficient notice requirements during the 2021 rulemaking process. Oregon Department of Environmental Quality has stated that they seek to reestablish a climate mitigation program.

Why does this matter to EWEB?

The Climate Protection Program, if reinstated, could affect the market for fossil fuel-based technologies, contributing to electrification of transportation and other sectors. This could increase demand for the electricity that EWEB supplies.

Links and Relevant Resources:

 

2.4.2     HB 2021 - Oregon Clean Electricity Standard

Oregon’s CES was enacted in 2021 and sets targets requiring Oregon’s two largest and investor-owned utilities, Portland General Electric and PacifiCorp, as well as assorted Electricity Service Suppliers (ESSs), to reduce the greenhouse gas emissions associated with their retail electricity sold in Oregon to:

  • 80% below baseline emissions levels by 2030;
  • 90% below baseline emissions levels by 2035; and
  • 100% below baseline emissions levels by 2040.

The CES also enacted a permanent moratorium on the siting of new natural gas power plants in Oregon and established an annual statewide Community Energy Grant Program.

Why does this matter to EWEB?

Though EWEB is not subject to the emissions reduction requirements of HB 2021, those requirements will prompt Oregon’s two largest utilities (PGE and PacifiCorp) to build increasing amounts of carbon-free resources, such as wind and solar which will affect regional energy markets in hard to predict ways.

Links and Relevant Resources:

 

2.4.3     Oregon Clean Fuels Program (CFP)

Oregon Clean Fuels Program Basic Structure, Sourced from Oregon Clean Fuels Program Figure 6: Oregon Clean Fuels Program Basic Structure, Sourced from Oregon Clean Fuels Program

The Oregon CFP is a program designed to reduce the carbon intensity of transportation fuels, similar to laws in both CA and WA. The original CFP legislation set a target of a 10% reduction in carbon intensity by 2025. Under Executive Order 20-04, the program was expanded, and additional targets were set: a 20% reduction by 2030 and 37% reduction by 2035.

Regulated entities include transportation fuel producers and importers of fossil gasoline, fossil diesel, ethanol, biodiesel, and renewable diesel. They are required to meet the declining carbon intensity cap for the fuels they sell.

One way to meet the program requirements is to purchase credits from entities that generate credits by developing low-carbon transportation fuels. Credits are measured in metric tons of GHGs. Credits can be sold to regulated entities, which in turn produce revenue to pay for projects that lower GHGs. For information about how to estimate credits or to which entities the credits will flow under the program, please see Appendix E: Resources for Entities Seeking to Estimate the GHG Impact of Transportation Electrification Projects and Potential Credit Generation Under the Oregon Clean Fuels Program.

Why does this matter to EWEB?

Under the Oregon Clean Fuels Program (CFP), EWEB is authorized to be an aggregator of credits attributed to residential EV charging. EWEB may use the revenue from these credits to make investments in transportation electrification and decarbonization. Additionally, EWEB owns EV charging infrastructure at the Roosevelt Operations Center (for our owned fleet vehicles and for public use in our employee parking lot), and at our Hayden Bridge water treatment facility located along the McKenzie River. EWEB generates additional CFP credits from these owned charging stations.

Links and Relevant Resources:

 

2.4.4       SB 1547, Clean Electricity and Coal Transition Plan

Enacted in 2016, SB 1547 requires Oregon’s two largest investor-owned utilities, Portland General Electric and PacifiCorp, to phase out coal-fired electricity from their retail sales in Oregon by 2030 and double their original Oregon Renewable Portfolio Standard (RPS) targets from 25% to 50% by 2040.

Why does this matter to EWEB?

Fewer coal plants result in less dispatchable (able to be turned on and off) energy on the grid, making regional grid reliability more challenging. EWEB, like utilities across the region, will have to adapt to these new dynamics.

Links and Relevant Resources:

 

2.4.5       Renewable Portfolio Standard (RPS)

The Oregon RPS requires large electric utilities (over 3% of Oregon electric load), including EWEB, to meet 25% of their electric load with qualifying renewable electricity. Two tiers of small electric utilities are required to meet 10% or 5% of electric load with qualifying renewable electricity respectively. Although legacy hydropower is not a qualifying renewable source of electricity under the RPS, legacy hydropower is exempt from displacement and carries no compliance/mitigation requirement.

Why does this matter to EWEB?

Because of EWEB’s hydropower-dominant portfolio, the utility has been exempted from RPS requirements. However, this exemption is not guaranteed if EWEB’s portfolio mix changes.

Links and Relevant Resources:

 

2.4.6     Emissions Performance Standard (EPS)

The EPS sets a greenhouse gas emissions limit of 1,100 pounds (0.5 metric tons) of greenhouse gases per megawatt-hour (MWh) of electricity for the siting of any new electricity generation facility in Oregon, effectively prohibiting the construction of any new coal-fired electricity generating unit in Oregon. Though natural gas electric generating units would meet the 1,100 pounds threshold, they are now prohibited by the recently enacted Oregon Clean Electricity Standard (see above).

Why does this matter to EWEB?

The prohibition on these carbon-intensive dispatchable fossil fuel sources of electricity in Oregon can affect reliability across the entire region, especially during peak times of high electricity demand when dispatchable power is often required, if they can’t be replaced with low-carbon dispatchable sources.

Links and Relevant Resources:

 

2.4.7     Advanced Clean Car II Rule

In 2022, the Oregon Department of Environmental Quality adopted the Advanced Clean Car II Rule, which is modeled after California’s Tailpipe Emissions Standards. Both rules require that 100% of new, light-duty vehicle sales in their states be zero emission by 2035.

Why does this matter to EWEB?

EWEB’s electrification forecasts already assume high levels of electric vehicle adoption in the next 20 years. The Advanced Clean Car II Rule effectively formalizes that demand increase. EWEB predicts that vehicle electrification will be the greatest driver of increases in demand for electricity in the next 20 years. It will be critical for EWEB to manage EV charging to avoid significant increases to peak demand as EV adoption increases.

Links and Relevant Resources:

Aerial view of Eugene. Courtesy of the City of Eugene. Aerial view of Eugene. Courtesy of City of Eugene.

2.5    Local Eugene Initiatives

2.5.1   Eugene Climate Recovery Ordinance (CRO) and Climate Action Plan (CAP) 2.0

Eugene’s Climate Recovery Ordinance

Community goals:

- Reduce community fossil fuel use by 50% of 2010 levels by 2030.
- Reduce total community greenhouse gas emissions to an amount that is no more than the City of Eugene's average share of a global atmospheric greenhouse gas level of 350 ppm by 2100, which was estimated in 2016 to require an annual average emission reduction level of 7.6%.

City Operation goals:

- All City of Eugene owned facilities and operations shall be carbon neutral by 2020, meaning no net release of greenhouse gas emissions.
- Reduce the City of Eugene's use of fossil fuels by 50% compared to 2010 usage.

Source: City of Eugene, Climate Recovery Ordinance

Eugene has a long history of climate action within both city government operations and the community. The city conducted its first Community Climate and Energy Action Plan in 2010. In 2014, City Council passed the first version of its Climate Recovery Ordinance (CRO), which was updated to its current form in 2016. The CRO includes four bold goals – two focused on the community, including residents and businesses, and two focused on city operations (see box).

To implement the CRO and determine what actions are already planning and/or underway, and what actions are still needed to reach the goals of the CRO, Eugene launched its Climate Action Plan (CAP) 2.0 process beginning in 2018. EWEB was an active participant in the CAP 2.0 development process from 2018-2019 as a large-lever shareholder. Large-lever shareholders participating in the Eugene Climate Collaborative (ECC) were deliberately defined as “organizations who have significant oversight and impact on community-wide fossil fuel use and emissions or have the ability to affect or alter systems that will enable the community to adapt and prepare for climate change.”

ECC partners include: the City of Eugene, Lane County, Bethel School District, Eugene 4J School District, Lane Community College (LCC), University of Oregon, Lane Transit District (LTD), Eugene Water & Electric Board (EWEB), Metropolitan Wastewater Management Commission (MWMC), Northwest Natural, PeaceHealth, and the Eugene Area Chamber of Commerce.

CAP 2.0 was published in summer 2020 and includes many voluntary commitments within the document from Eugene Climate Collaborative partners, including 15 commitments from EWEB. Please see Appendix F for specific reporting on EWEB’s commitments in CAP2.0.

Why does this matter to EWEB?

EWEB supports the objectives of the Climate Recovery Ordinance and is committed to advancing our voluntary commitments in Eugene’s CAP 2.0, including tracking our progress through this Guidebook.

Links and Relevant Resources:

2.6    EWEB’s Climate Guidebook Principles to Guide Policy and Programs

Within the Climate Guidebook, EWEB wishes to include a set of principles meant to define the general direction EWEB seeks to move towards on issues, mostly public policy, related to climate change. These principles are built on EWEB’s values, which are set by the Board of Commissioners and in alignment with established best practices in the utility industry.

EWEB’s organizational core values per Strategic Direction Board Policy SD1 include:

  • SAFE: We value the safety, physical and psychological wellness of our workforce and the public, the security and integrity of cyber assets and data, and the protection of our customers’ assets
  • RELIABLE: We value the ongoing continuous on-demand delivery of drinking water and electricity, and the dependability of our response to our customers.
  • AFFORDABLE: We value and respect our customer-owners’ financial resources by making wise investments and controlling costs and rates.
  • ENVIRONMENTAL: We value the prudent and sustainable stewardship of the environment and natural resources, including preserving our watershed, and our role in reducing the greenhouse gases (GHGs) contributing to climate change.
  • COMMUNITY/CULTURE: We value a culture of intentional actions and outcomes, continuous improvement, diverse perspectives, that is trustworthy, respectful, equitable, and inclusive to employees and community members. We are dedicated to our public service, professions, local governance, and commitment to serve our community honestly and with integrity.

Developing a set of principles will guide the General Manager, and thus the organization, in fulfilling the Strategic Directive Policies such as SD15 from the Board.

A “principle” is a North Star – a position towards which EWEB seeks to move, based on our values. A principle is not a rulebook. As EWEB seeks to make positive changes in our community, we must first define the nature of those positive changes. Clearly articulated and transparent principles help us get there by orienting us in a certain direction. Policy development, program implementation, investment of EWEB staff time and/or investment of financial resources is the mechanism by which we move towards these principles.

As we better define our principles on various topics, we may discover that some of EWEB’s existing policies and programs do not currently meet all our aspirations. Recognizing that some policies and programs don’t currently align with our principles may be the first step in eventually ensuring that they do. Identifying any areas of potential misalignment may also help us identify and articulate to our stakeholders what barriers might exist and must be overcome before alignment is possible.

As EWEB further articulates its principles on a variety of topics, they will be included here for transparency and ease of reference. The topics can span from providing guidance on how to advocate for policy in Salem or Washington D.C, to informing internal program development, to articulating how a new technology relates to EWEB’s long-term interests. Topics submitted for inclusion could relate to climate change and the role the energy industry plays in decarbonizing society. Additional topics that merit development of their own set of principles will undoubtedly arise in the future and will be added over time. Context on the various topics and why / how the draft principles were developed is included here:

Carbon Policy & GHG Reduction Principles: Through the years, EWEB has worked with many regional partners on supporting climate and carbon policies at the state, regional, and federal levels. EWEB has been guided by a set of principles supported by previous Boards of Commissioners and in coordination with other public utility members of the Public Generating Pool. The principles included here are a refined version of those previously articulated principles.

Distributed Generation Principles: EWEB’s customers are increasingly interested in installing distributed energy generation and/or storage at their homes and businesses. How we compensate customers for the energy they produce and/or access through distributed technologies will become more important in the years ahead. The Distributed Generation Principles are in alignment with information staff has been providing verbally to the Board over time, are used to guide EWEB positions on relevant public policy, and are based on work done in coordination with best practices among comparable public utilities in the region.

Green Hydrogen Principles: Electric utilities are increasingly interested in how hydrogen can play a role in decarbonizing the economy. Here in Eugene, discussions have arisen about whether hydrogen should be blended into natural gas pipelines as a method of lowering the carbon content of the gas system. At the same time, regional coalitions are seeking funding for green hydrogen projects that may involve transportation fueling or other uses. A set of principles will help EWEB define and articulate our interest in hydrogen, as well as the types of projects we may pursue. The principles included here are based on alignment with principles advocated by U.S. Department of Energy, Oregon Department of Energy, and several regional partners.

Rate Design Principles: One of EWEB’s five organizational values is affordability, and as discussed in Chapter 3, keeping rates low for customers is climate action.  EWEB has long held a set of principles, based on industry accepted principles, for meeting legal standards and achieving best practices in rate making.

 

2.6.1     EWEB’s Carbon Policy & GHG Reduction Principles

Revision date: April 2024

Policies and laws to reduce greenhouse gas (GHG) emissions are a viable tool if society is to avoid the worst effects of climate change. Because electric utilities rely on an interconnected grid, policies that impact this grid also impact local electric utilities. Electric utilities rely on the grid to meet customer needs, sell surplus resources, and ultimately work together to keep rates as low as possible. Even with EWEB's ambitious voluntary internal climate policy goals for our owned and contracted resources, there are times when we buy power from the market. Getting to a fully decarbonized Western grid – the Western Interconnect (WECC) – and ultimately a fully decarbonized economy will require policies to reduce GHG emissions at the federal, regional, state, and/or local levels.

The most ambitious proposed federal policy on GHG reductions died in 2009 when Congress failed to pass a bill that would have instituted a nationwide plan to cap carbon emissions and allow emitters to trade pollution credits - a cap-and-trade system. Since then, only minor federal action occurred, until 2022 when Congress passed the Inflation Reduction Act (IRA). The IRA signaled a change in the federal approach to GHG emissions - rather than punish emitters, the IRA subsidizes emissions-free energy such as wind and solar.

In the absence of comprehensive federal legislation, Oregon has attempted to implement GHG policies. In 2019 and 2020, Republican legislators walked out of the Capitol to prevent votes on cap-and-trade legislation. So, Gov. Kate Brown implemented executive orders. In 2022, the Climate Protection Program took effect, setting a declining cap on emissions from fossil fuels - but it did not apply to electricity generation, which already must meet goals under the State's Renewable Portfolio Standard. In December 2023, the Climate Protection Program was invalidated by the Oregon Court of Appeals, yet Oregon Department of Environmental Quality seeks to reestablish a climate mitigation program.  At the same time, the state's Clean Electricity Standard, which was enacted in 2021, requires the state's two largest utilities - but not publicly owned utilities such as EWEB - to achieve net-zero GHG emissions by 2040. Additionally, the State's Clean Fuels Program addresses GHG emissions from transportation fuels and provides credits for entities that invest in transportation electrification among other low-carbon transportation fuel choices.

As EWEB advocates for comprehensive climate policies as directed in EWEB Board Policy SD15, we will be guided by the following principles.

Relating to climate policy, EWEB prefers and supports policies that:

  • facilitate the reduction of GHG emissions most efficiently and at the least overall cost to society.
  • are technology-neutral, economy-wide, and market-based.
  • recognize the role of legacy hydropower in limiting GHG emissions, ensure that existing hydropower resources will not be disadvantaged relative to newer renewables, and are compatible with a variety of future physical climate and hydropower production conditions.
  • measure carbon emissions as far upstream and nearest to the point of production as possible and are as resource specific as possible; in pursuit of more effective signals favoring the dispatch of cleaner resources and simpler and/or reduced administrative burden.
  • preserve a path for load/resource growth and flexibility for utilities that pursue cross-sector decarbonization.
  • are regionally consistent.
  • consider the equity of the impacts on diverse segments of the population and are consistent with EWEB’s Diversity, Equity, and Inclusion Policy SD23.

 

2.6.2     EWEB’s Distributed Generation Principles

Revision date: April 2024

Traditionally, power plants have been large and centralized structures such as hydroelectric, nuclear, coal, or natural gas plants, usually located far from where most of the power output will be consumed and connected to these load centers via a long-distance transmission and distribution system.

The U.S. Environmental Protection Agency (EPA) defines the term distributed generation to include a variety of technologies that are decentralized and often located close to where the power will be consumed. Due to the decentralized nature, these resources tend to be smaller in size than traditional centralized power sources. Distributed generation technologies may serve a single building such as a home or business or participate in a microgrid (a smaller grid that is connected into the larger electricity delivery system) that could serve a wider area such as an industrial facility, a college campus, a military base, or a downtown district for example.

Per EPA, in the residential sector, common distributed generation systems include:

  • Solar photovoltaic panels
  • Small wind turbines
  • Fuel cells, usually fueled by natural gas
  • Emergency backup generators, usually fueled by gasoline or diesel fuel

Per EPA, in the commercial and industrial sectors, distributed generation can include resources such as:

  • Combined heat and power systems
  • Solar photovoltaic panels
  • Wind
  • Biomass combustion or cofiring
  • Municipal solid waste incineration
  • Fuel cells fired by natural gas or biomass or hydrogen
  • Emergency backup generators, usually fueled by diesel fuel

Local development of distributed generation technologies is allowing EWEB’s customers to generate their own electricity and even generate surplus electricity that they can sell to EWEB via a process called net metering. These distributed generation technologies seek to make our community more resilient to disasters, reduce losses from the long-distance transmission system, and give customers choices about where to get their energy.

At the same time, customers with distributed energy resources are still connected to EWEB’s grid. These customers rely on EWEB’s grid for energy when their generators aren’t producing and to distribute excess energy to other consumers connected to the grid. Solar homes, for instance, still need energy from EWEB’s grid at night. And these customers also rely on EWEB’s grid of distribution and transmission lines when they sell surplus energy to EWEB.

EWEB incurs significant costs maintaining a robust grid and procuring energy for all customers, even those with distributed generation technologies. EWEB believes that these costs should be equitably shared among all customers.

Solar panels are installed at St. Vincent de Paul in Eugene. EWEB photo. Solar panels are installed at St. Vincent de Paul in Eugene. EWEB photo.

With that goal in mind, EWEB has developed the following principles:

  • EWEB supports and facilitates customer choice to install non-utility owned distributed generation equipment and infrastructure.
  • EWEB recognizes that some distributed generation technologies are better at meeting the community’s historical electricity demand (load) than others.
  • EWEB supports pricing mechanisms that fairly compensate customers for electricity they supply to the grid and that do not transfer unpaid costs to other customers.
  • EWEB strives for the equitable allocation of costs among all customers to maintain the electric grid.
  • EWEB will need a rate design that fairly assigns the costs of procuring energy (including peak energy needs) and maintaining the electric grid to the customers who cause those costs.
  • EWEB prioritizes the safety of utility workers and customers and will develop interconnection standards that ensure safety and reliability.
  • EWEB supports policies and practices that consider the equity of the impacts on diverse segments of the population and are consistent with EWEB’s Diversity, Equity, and Inclusion Policy SD23.

 

2.6.3     EWEB’s Green Hydrogen Principles

Revision Date: April 2024

add alt language as needed U.S. Department of Energy Hydrogen Shot initiative.

The most abundant element in the universe – hydrogen – is evolving as a tool to decarbonize sectors of the economy that have few or no other low-carbon options. In 2021, the federal government set a goal of reducing the cost of hydrogen to one dollar for one kilogram within one decade (1 1 1). Also in 2021, the Oregon legislature passed SB 333 that directed the Oregon Department of Energy to conduct a study on the potential benefit of, and barriers to, production and use of renewable hydrogen in Oregon.

The Oregon Department of Energy provides an overview of renewable hydrogen as follows:

“Hydrogen is currently used in several industrial processes – it is a fundamental input for manufacturing ammonia, which is then used for fertilizer production; it is used to process crude oil into refined fuels, like gasoline and diesel; and it is also used in the metallurgic industry. However, most of the hydrogen produced today is derived from natural gas or coal, which is “grey" hydrogen. “Blue" hydrogen is also derived from fossil fuels but with the associated carbon emissions captured and stored. Most “green" or renewable hydrogen is produced using renewable electricity to power an electrolyzer that splits water into its component parts of oxygen and hydrogen. SB 333 refers to renewable hydrogen as “hydrogen derived from energy sources that do not emit greenhouse gases." Renewable hydrogen could be used to replace grey hydrogen where it is currently used, as a transportation fuel, or as a replacement for natural gas in some applications.”

As part of the IIJA, the U.S. Department of Energy committed $7 billion in competitive funding for entities and groups forming regional hubs to pursue research and deployment of clean hydrogen. And the 2022 Inflation Reduction Act contains tax credits for both investing in hydrogen projects and producing hydrogen using renewable energy. In October 2023, the US Department of Energy selected the Pacific Northwest Hydrogen Hub as one of seven regional hydrogen hubs nationwide.

The energy storage capabilities of hydrogen offer intriguing possibilities for utilities planning to incorporate more intermittent, renewable energy resources into their portfolios. Excess electricity from renewables such as wind and solar can be used to create hydrogen and that hydrogen can be converted back to electricity when it’s needed later or sold for use in other secondary applications. Producing hydrogen, rather than curtailing resources during times of surplus, will reduce the overall cost and justify further investment in intermittent renewable energy sources. By storing energy, hydrogen can help balance fluctuations in renewable energy production, while also fostering a secondary market for abundant renewable energy.

The technology for hydrogen is advancing rapidly. While more than 95% of hydrogen used in the U.S. today is generated using fossil fuels, researchers are improving methods of creating clean, green, renewable hydrogen. And utilities are launching pilot projects to test hydrogen’s energy storage potential.

To guide us in proactively pursuing technologies to harness the power of hydrogen produced from non-emitting sources, EWEB supports policies that:

  • support hydrogen production that results in the lowest possible lifecycle greenhouse gas emissions[1] and facilitates the use of and/or investment in non-carbon emitting electricity generation resources.
  • provide opportunities for electric utilities, or independent power producers, to use hydrogen production to capture value from otherwise curtailed intermittent renewable generating resources, further incentivizing investment in renewables.
  • consider hydrogen and other non-emitting options as generic alternatives for energy storage applications.
  • does not exclude hydrogen, including other non-emitting chemistries, fuel cells, and/or direct combustion, as a decarbonizing energy alterative in other sectors such as industrial processes and medium/large vehicle transportation.
  • provide options for utilities to use hydrogen or other storage alternatives to improve the reliability and/or performance of local and/or distributed portions of the grid.
  • provide for diverse forms of clean energy storage to improve the resiliency of local communities.
  • consider the equity of the impacts on diverse segments of the population and are consistent with EWEB’s Diversity, Equity, and Inclusion Policy SD23.

    [1] Lifecycle greenhouse gas emissions are the overall GHG impacts of the production of a particular fuel.  Depending on the boundaries of the analysis, this could include the GHG impact of feedstock production and transportation, fuel production and distribution, and use of the finished fuel. There are different lifecycle GHG emissions associated with different hydrogen production methods. For example, using renewable power to split a water molecule via electrolysis has a different lifecycle GHG value compared to a process that uses fossil-based energy to crack fossil natural gas molecules via steam methane reformation technology. EWEB seeks to be technology agnostic and move towards ever-evolving technologies that result in the lowest climate impacts.

    Graphic of U.S. Department of Energy's H2@Scale initiative U.S. Department of Energy's H2@Scale initiative, which seeks to advance affordable hydrogen production, transport, storage and use to decarbonize sectors of the economy.

     

    2.6.4     EWEB Rate Design Principles

    Revision Date: April 2024

    Utility rates have a legal duty to establish rates that are “reasonable” and not “unduly discriminatory”[1] and EWEB has closely aligned its rate making principles with industry accepted principles that provide the basis for meeting legal standards and best practices in rates making.

    Industry Standard Principles:

    • Sufficiency
    • Fairness
    • Efficiency
    • Customer Acceptability
    • Bill Stability

    EWEB Rate Making Principles:

    • Sufficiency
    • Affordability
    • Efficiency
    • Cost Basis
    • Equity
    • Gradualism

    EWEB ratemaking principles are codified in several different Board policies.

    Sufficiency is the principle that provides investor-owned utilities with the ability to recover costs and a reasonable rate of return to attract capital and continue to invest in the system on behalf of customers. For a municipal utility like EWEB, sufficiency is a principle supported by Board Policy SD6 Financial Policies and SD9 Rate Setting Policy.

    SD6 states “Rate Sufficiency Policy: Rates and charges will be adequate to provide revenues sufficient to maintain a degree of financial soundness over and above requirements for compliance with existing bond covenants. (FP 1.1) “

    SD9 states “set rates at a level sufficient to recover ongoing costs of utility operation.”

    Affordability is included in Board policy SD1, Mission, Vision, Values & Legacy.  “Affordable” is listed as one of the utility’s five values. 

    SD1 states that EWEB values and respects our customer’s financial resources by making wise investments and controlling costs and rates. This value is supported by EWEB’s limited-income programs and long-standing budgeting practices.

    Efficiency in ratemaking refers to the concept that electricity prices should be set at an economically efficient level. The prices should reflect, as closely as possible, the true cost of providing reliable electric services to each customer class and should not inadvertently distort the market. Setting an electricity price that does not align with costs has significant consequences for utilities. Additionally, efficiency can also be used to describe the customers’ understanding and interpreting the utility prices, rates, and tariffs.

    Cost Basis has two components that align with the Board policies SD3 Customer Service Policy and SD9 Rate Setting Policy.

    SD3 states that “rates will be uniform to all consumers within various service classifications; and that pricing for utility service and products will be cost based…”

    SD9 states EWEB’s elected Boad of Commissioners has complete authority to “approve rates which are cost-based, nondiscriminatory, and in concert with the needs of EWEB’s customers.”

    The cost-of-service models are the basis for meeting the standard of cost-based rates for EWEB customers. The -costs are based on the Board approved budget annually and projected in three-year periods for multi-year cost of service review.

    Equity is in reference to the legal standard of rates that are “fair and reasonable” and “not unduly discriminatory” and is met by applying an industry standard cost of service approach to cost allocation among various customer classes and by employing standard rates and policies for customers within the respective customer classes. This ratemaking principle is aligned with Board policy SD9 Rate Setting Policy and SD23 EWEB’s Diversity, Equity, and Inclusion policy, especially within the focus area of equitable “access to products and services”.

    SD9 requires that “rates and charges for utility service be fair and nondiscriminatory” and are considered nondiscriminatory when “customers receiving like and contemporaneous service under similar circumstances are treated equally in the development and application of specific rates.”

    SD23 authorizes, delegates, and directs EWEB’s General Manager to ensure that the Community we serve has Equitable Access to Products and Services.

    Gradualism (Bill Stability) refers to the need to ensure that electricity tariffs remain relatively stable over time. The cost of electricity can vary hour to hour and the principle of stability reflects the utilities’ role in managing that volatility and insulating customers from the impact of the volatility. EWEB develops a 10-year financial plan and manages its financial plans to mitigate rate shock and volatility in retail rates and prices. 

    EWEB Board policy SD6 Financial Policies 1.2 supports the principle of gradualism.

    SD6 FP 1.2 states “certain funds will be held in reserve for the purpose of mitigating the customer rate impact of unanticipated events.” EWEB annually reviews and updates its Rate Stabilization Fund.

    The intent of these established rate design principles is to align EWEB rate development processes with the legal framework and utilizing industry standard practices of establishing its revenue requirement and cost allocation, while providing the Board of Commissioners adequate discretion within these principles to meet competing objectives, organizational goals, and community values.

    Links and Relevant Resources:

    [1] Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591 at 645 (1944).

    The McKenzie River. Adam Spencer, EWEB

    Next Section: Chapter 3 - Power Supply & Transmission

    Previous Section: Chapter 1 - Introduction

    Climate Guidebook Table of Contents

    Eugene Water & Electric Board

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