Part 1 of a 2-Part Series on Clean Energy Accounting in Oregon
This is the first post in a two-part series about Oregon’s landmark clean energy law, HB 2021. In Part 1, we examine a critical flaw in how the law accounts for renewable electricity and tracks emissions—and why that threatens the law’s effectiveness. In Part 2, we explore how this flaw is undermining consumer renewable energy programs across the state.
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In 2021, Oregon passed HB 2021, setting aggressive targets to reduce greenhouse gas emissions from electricity delivered to Oregon customers. The law’s goal is simple: ensure that electricity sold to Oregon customers becomes cleaner over time.
But there’s a problem—there’s no requirement in the law for utilities to retire renewable energy certificates, or RECs, for the renewable electricity that they use to reduce these emissions. That’s a big deal. Without RECs, there’s no way to verify that the renewable energy and associated emissions being reported is exclusively serving Oregon customers.
This opens the door to double counting, where the same megawatt-hour of renewable electricity is used to meet emissions targets in Oregon and claimed somewhere else. The proof of delivery and environmental benefits contained in the REC can essentially be sold off or never acquired in the first place—even while still being used for compliance in Oregon.
Why RECs Matter for HB 2021
RECs represent the environmental attributes—including the emissions—associated with one megawatt-hour of renewable electricity. They’re used across the country in Renewable Portfolio Standards (RPSs), emissions reporting by utilities and other electricity suppliers, voluntary green power programs, and consumer emissions-reporting standards. Since carbon-free or renewable electricity can’t be physically directed to specific users and its delivery can’t be verified physically, RECs are the standard and necessary tool for tracking renewable electricity and its emissions benefits to customers on the power grid.
HB 2021 is about reducing emissions from electricity sold to Oregon customers, not about regulating power plants directly. That means delivery matters—and tracking that delivery requires RECs. Without having to own and retire RECs, the utilities can say they’re delivering zero-emissions electricity to Oregonians while they sell the proof of delivery to someone else. For example, let’s assume Portland General Electric (PGE) owns a 5 megawatt solar farm in Oregon. For its HB 2021 compliance, PGE reports the solar output as zero-emissions electricity for Oregon. Meanwhile, PGE sells all the RECs from that solar farm to Puget Sound Energy in Washington, which uses them to comply with Washington’s RPS. In this case, the same solar generation is being claimed as zero-emissions power for Oregon as well as renewable power for Washington. Both cannot be true, and this demonstrates a clear case of double counting.
Why This Hurts Oregon Ratepayers
Allowing double counting doesn’t just weaken the law—it actively harms Oregon customers.
Ratepayers are funding a clean energy transition, but if the utilities aren’t required to own and retire the RECs, those utilities are not actually delivering what customers are paying for. It’s like paying for six apples and getting five because one was counted twice. You’re wasting money.
Not requiring the use of RECs for HB 2021 slows the region’s clean energy transition, weakens regional decarbonization efforts, distorts renewable energy markets, introduces legal and contractual risk, and undermines public trust. It also conflicts with how RECs are treated in many other state and federal programs that track emissions or offer clean energy incentives.
What Needs to Change
The Oregon Public Utility Commission interpreted the current law to mean that RECs aren’t required for compliance. That interpretation leaves a major gap in HB 2021’s effectiveness. The legislature can fix it.
To ensure HB 2021 delivers on its promise, Oregon must require that RECs be owned and retired by utilities for the renewable energy they use to meet the law’s emissions targets. Without this step, HB 2021 is an empty promise.
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In Part 2, we look at real-world consequences of this accounting failure—how it’s hurting customers who voluntarily pay for renewable energy and freezing clean energy investment in Oregon and beyond.