Senate committee hears bill to raise PURPA solar cap to 10 MW

Representative Ken Helm, D-House District 27, and community renewable energy advocates told the Senate Committee on Energy and Environment on April 23 that House Bill 3,863 would restore parity between solar and other small renewable resources by requiring the Oregon Public Utility Commission to set a standard-contract eligibility cap of no less than 10 megawatts for qualifying facilities under the federal Public Utility Regulatory Policies Act (PURPA).

Supporters said the bill would help small landowners and local developers get projects “to pencil” by giving them access to standardized avoided-cost rates and a PUC-approved standard contract. "This bill in front of you right now simply seeks to provide for slightly larger solar projects that may be pursued by individuals, or smaller companies, to have access to the standard contracts with our investor owned utilities," Representative Ken Helm said.

Why it matters: Qualifying for PURPA standard contracts and avoided-cost rates can make small projects financeable because developers can secure a set price and avoid lengthy, project-by-project negotiations with large utilities. Proponents argued the current 3-megawatt cap for solar—codified in OPUC rules (referred to in testimony as AR 631)—is out of date and is constraining community-scale solar and co-located projects that could provide local economic and resilience benefits.

What supporters said - James Williams, Lake County commissioner and executive director of the Community Renewable Energy Association (CREA), told the committee CREA and Rep. Helm helped draft the bill and described how PURPA's standard contracts and avoided-cost rates are important tools for small developers. "Qualifying for PURPA is a key to making these projects pencil," Williams said, explaining the financing role of a locked-in avoided cost rate and standard contract. - Farmer and small developer Ormond Hilderbrand described his experience as an example: "I could not have done the project that I did, you know, which is a 10 megawatt wind facility in North Central Oregon... I just was able to take advantage of [the standard contract]." He said a 3-megawatt solar cap prevents similar small local projects from moving forward. - Angela Crowley Cook, executive director of the Oregon Solar and Storage Industries Association (OSEA), said the PUC had promised to consider the change two years earlier and that local growers and smaller developers now make up a larger share of potential PURPA applicants. "OSEA strongly supports House Bill 38 63," she said.

Opposition and PUC authority concerns - Chloe Becker, representing Portland General Electric, opposed the bill on grounds that setting the cap in statute would remove the Oregon Public Utility Commission’s flexibility to adapt the standard-contract threshold as markets change. Becker said the original federal implementation expects standard prices for very small QFs and noted that in prior years a higher statutory cap led to a large rush of projects in PGE’s territory. - Elizabeth Howe of Pacific Power also opposed the bill, saying it "will likely cause our customers to pay more for energy from corporate projects than they would otherwise." Howe told the committee a standard contract locks in avoided-cost payments and system development or interconnection costs for long terms (testimony referenced 15- and 20-year terms), and that letting the PUC balance customer interests against developer benefits is preferable to setting a statutory threshold.

Details and clarifications - Bill text: HB 3,863 would require the PUC to establish an eligibility cap at no less than 10 megawatts for use of standard avoided-cost rates and standard contracts for PURPA qualifying facilities (QFs). - Current rule: Testimony said the Oregon PUC has set a 3-megawatt cap for solar in OPUC rule AR 631; supporters want solar returned to parity with wind and hydro at 10 megawatts. - Contract term: Testimony described avoided-cost standard contracts as long-term agreements (testimony referenced 15 years for solar QF avoided-cost contracts). - Opposition evidence: Utilities said a larger statutory cap previously produced an oversubscription (PGE testified that a past 10-MW standard contract period led to about 1,100 MW of contracted/proposed QFs).

What did not happen - The committee heard testimony for and against the bill but did not take a final vote during this hearing. Members asked the Office of Legislative Policy and Research to investigate rate-impact questions raised by utilities and proponents.

Ending note - Proponents asked the legislature to act because they said the PUC has not changed the rule despite prior assurances. Opponents asked the committee to retain the PUC’s discretion to adjust the threshold as market conditions change.