The proper
role of government is frequently debated in the Legislative Assembly. Most
lawmakers agree that one of the fundamental functions of government is to
provide the basic infrastructure that enables all citizens to have access to
shared services such as roads, public schools and clean, potable water.
Arguably, those services should include access to electric and natural gas
utilities.
During
the 2015 session, the Legislature passed Senate
Bill 32 by wide bipartisan margins. The bill states the Oregon Legislative
Assembly finds that access to natural gas is in the public interest and the
extension of pipelines to rural areas is necessary for communities to preserve
and develop local economies and enlarge their tax bases. In addition, I believe
the expansion of natural gas infrastructure and services also represents the
most cost effective means of energy conservation.
SB
32 required the Public Utility Commission (PUC) to form a work group to study
feasible ways to expand natural gas infrastructure to areas that are not
currently served by public utilities. I was among those selected to serve on
the work group that has already convened for several meetings.
One
of my primary interests is the tremendous potential benefits the town of
Lakeview could reap from the development of natural gas infrastructure. The
picturesque city of about 2,300 people is the county seat and largest town
located in Oregon’s third largest county. Like many other small rural Oregon towns,
Lakeview has yet to experience the elusive “economic recovery” that is
occurring in some of the more urban parts of the state.
I
believe developing a natural gas utility in Lakeview would help to provide the
kind of economic revitalization that could help carry its economy far into the
future. Both the availability of natural gas and the potential cost of the
distribution system are within reach.
The
Ruby Pipeline, a 680-mile system extending from Wyoming to Oregon, provides
natural gas supplies from the major Rocky Mountain basins to consumers in
California, Nevada and the Pacific Northwest. The 42-inch pipeline passes about
two miles south of Lakeview.
It
has an already installed terminal, as well as a lateral pipeline, constructed
to an industrial site near the south city limits. Only an adequate source of
funding is preventing the construction of a natural gas distribution system to
Lakeview’s potential residential, commercial and industrial users.
There
is precedence for the kind of infrastructure expansion that the Legislative
Assembly is attempting to achieve through the work group.
The Rural
Electrification Act of 1936 was signed into law by President Franklin
Roosevelt for the purpose of providing federal loans to help install
electricity infrastructure in rural areas of the United States. The Act
resulted in the electrification of rural America by subsidizing the development
of the needed utility infrastructure.
Likewise, the Communications
Act of 1934 provided that all people in the United States shall have access
to rapid, efficient, nationwide communications service with adequate facilities
at reasonable charges. It created the Universal Service Fund that operated as a
mechanism by which interstate long distance carriers were assessed to subsidize
telephone service to low-income households and high-cost areas. The Telecommunications
Act of 1996 expanded the traditional definition of universal service to
include affordable, nationwide telephone service to rural health care
providers, eligible schools and libraries, as well as other services.
Oregon also assesses a Universal
Service Surcharge that helps to provide basic telephone service in high-cost
areas, a Residential
Service Protection Fund charge that helps fund the telephone assistance and
telecommunication device access programs, and an Emergency
911 Communications Tax that funds the state’s emergency reporting system.
Each of these assessments, charges and taxes are billed as line items on our
monthly telephone bills.
Currently,
investor owned electric utility customers in Oregon pay a “public purpose
charge” (PCC) that is equal to three percent of their monthly utility bill. Investor
owned natural gas utility customers pay a little less.
That
surcharge, included as a line item on ratepayers’ monthly utility bills, collects
more than $150 million per year from investor owned utility ratepayers. More
than $21 million per year is collected from natural gas utility customers.
The PPC was established by Senate Bill 1149 and became
effective March 1, 2002. Nearly three-fourths of the ratepayer money collected is
designated to be spent for energy conservation in homes and businesses, the
building of renewable resource power plants and other renewable resource
projects.
In 2007, Senate
Bill 838 amended the PPC law by giving utilities the ability to ask the PUC
for permission to include in rates the costs of implementing or funding additional
cost-effective energy conservation measures. The PUC requires the utilities to
assess the achievable cost-effective conservation potential in their
service territories. Natural gas is certainly one of the most cost-effective
sources of available energy.
By
my calculations, during the past decade, as much as $200 million of the PPC proceeds
have been spent largely on solar and wind energy projects. The return on
investment has been extremely poor.
For
instance, according to the Department of Energy, Oregon’s entire solar
generation capacity currently amounts to only seven one-hundredths of one
percent of the State’s annual total electricity generation. Solar energy’s
contribution to our state’s electric generation capacity is hardly measurable,
despite the huge investment of PPC dollars on solar generation projects. Oregon could provide natural gas
infrastructure to serve many rural communities for a fraction of what is being
spent on these inefficient renewable systems.
The
fact of the matter is, it is not wind and solar energy development that is
reducing United States and global greenhouse gas (GHG) emissions. The United
States has an abundance of natural gas resources. The market-driven development
of those resources has both driven down the cost of natural gas to historic
lows and caused our national GHG emissions to plummet to mid-1990s levels.
In a
newsletter
I released last August, I described how the Bend-La Pine School District
has been able to convert 40 percent of its bus fleet from diesel to liquid natural
gas. Aside from the immediate cost savings of the fuel itself, the school
district has also been able to reduce its hydrocarbon emissions by 80 percent.
The environmental benefits of this conversion are apparent.
Lakeview
has the distinction of being in an air inversion zone, and one of five Oregon
towns struggling to attain Environmental Protection Agency air quality
attainment goals. Because of that, the town struggles with how to preserve its
air quality without further damage to its industrial and economic base. Like
the other four towns, the wood stoves being used by many residents to heat their
homes are often blamed for the air quality challenges.
The
use of natural gas as an affordable home heating substitute could help solve this
very difficult problem, as well as help spur the kind of private sector
investment that any community needs in order to grow and thrive.
I
will continue my efforts with members of the work group, as well as
collaborating with other legislators and interested parties, to try and develop
solutions for funding these natural gas infrastructure investments. Your ideas and
recommendations are actively solicited.
The
work group’s next meeting is scheduled for June 16 in Salem.
Please remember--if we do not stand up for rural Oregon, no one will.
Best Regards, Doug
Senate District 28
Email: Sen.DougWhitsett@state.or.us I Phone: 503-986-1728 Address: 900 Court St NE, S-311, Salem, OR 97301 Website: http://www.oregonlegislature.gov/whitsett
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