Citing developments within the Western Power Pool’s Western Resource Adequacy Program, the Oregon Public Utilities Commission waived penalties for electric service suppliers participating in the state’s alternative RA program.

The three-member commission voted Nov. 25 in favor of staff’s recommendation to grant a waiver for electric service suppliers (ESSs) that make filings in Oregon’s state resource adequacy program and directed staff to work with the PUC’s Administrative Hearing Division to decide whether to open a rulemaking or investigation to consider amendments to RA rules.

ESSs are the product of Oregon’s electricity restructuring law, which gave non-residential customers the option to purchase energy from independent PUC-certified suppliers rather than their utilities through the state’s direct access program.

The PUC’s vote came after the Northwest & Intermountain Power Producers Coalition filed a motion asking the commission to consider the waiver because of developments within WRAP, which impacted Oregon’s separate RA program.

Entities not part of WRAP must participate in the state’s RA program, which is modeled mostly on WRAP, except it does not have specified penalties. Those instead are determined by the commission, according to a staff memo.

The commission previously waived penalties for the 2025-2027 compliance period after WRAP delayed its first binding period. Until the recent vote, no waiver existed for the 2027-2029 cycle, but the commission approved one in response to recent WRAP developments.

WRAP participants had until Oct. 31 to commit to the program’s binding season beginning in winter 2027/2028. Citing concern about the program’s readiness, Oregon-based utilities PacifiCorp and Portland General Electric exited, along with Calpine Energy Solutions, which operates as an ESS in the state. (See WRAP Wins Commitments from 16 Entities.)

The entities could choose to rejoin WRAP, but if they do not, they must demonstrate compliance with Oregon’s RA requirements unless another regional RA program becomes available.

In light of these developments, NIPPC asked the Oregon PUC to provide clarity by adopting a penalty framework for the state RA program and adopting an alternative compliance pathway for ESSs.

NIPPC said ESSs are struggling to meet both WRAP and state RA requirements, in particular because of difficulties procuring transmission rights from third-party transmission providers and rights holders.

“[NIPPC] said that uncertainty about ESSs’ ability to comply with requirements or reasonably limit penalties for non-compliance in either WRAP or the state program could irreparably harm the direct access (DA) market by leaving DA customers with ‘no reasonable choice’ but to provide notice to their incumbent utilities of their intent to return to cost-of-service rates,” according to the memo. “Although WRAP and state program penalties are not scheduled to apply until 2027, NIPPC stressed the urgency of its first request, that the commission clarify state program penalties, noting that DA customers must typically provide at least two years’ notice to return to their incumbent utilities.”

In response to NIPPC’s motion, PUC staff said it “believes there is good cause for the commission to waive [RA penalties] for ESSs for the next state program compliance process. This waiver would remove the requirement for the commission to make a compliance determination on ESSs’ forward showings and the firm requirements related to remedies and penalties.”

Staff added that the waiver should give it enough time to investigate and consider changes to the state RA program.

Staff also provided a five-point checklist for what it believes the commission should accomplish moving forward:

• • Provide load-serving entities with near-term clarity about state RA requirements and consequences of noncompliance.
  • Ensure, to the extent possible, non-preferential treatment between ESSs and utilities and fair treatment between participants in the state RA program and those in WRAP.
  • Minimize disparities between available RA programs while also incentivizing participation in a regional RA program.
  • Ensure the commission maintains visibility into the RA positions of LSEs and the potential for impacts on all retail customers.
  • Ensure compliance with state program requirements is feasible and incentivized by the program’s design.

‘Ensuring Reliability and Competition’

Stakeholders participating in the meeting backed staff’s recommendations.

Marie Barlow, an attorney with NewSun Energy, said the organization supports the efforts.

“We just want to emphasize that the goal for the resource adequacy and the direct access programs should remain focused on ensuring reliability and competition,” Barlow said. “The outcome that we absolutely do not want is for the direct access program to collapse under the weight of those resource adequacy obligations, resulting in those loads returning to the utilities and further burdening those utilities with their greenhouse gas reductions obligations and additional reliability obligations, especially at a time when they’re already going to be burdened with rapidly increasing loads.”

Other organizations and companies also voiced their support, including PGE, PacifiCorp and Calpine.

PUC Chair Letha Tawney noted that the vote does not mean there will be no RA obligations for ESSs and that most parties appear to agree they should continue to present forward showings.

“I think there may be interim data requests that staff will have to request and ESSs might need to be responsive to,” Tawney said. “As we go forward through this time frame, it might be that every … 24 months showing is sort of sufficient given how dynamic the space is. But I’m hearing an openness to that dialog, and I appreciate that.”