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NW Grid Modernization Workshop

 

NW Grid Modernization Workshop
Hosted by PGE and USDOE
May 10, 2012
Governor Kitzhaber’s Keynote Speech

It is an honor to be here with energy and utility experts, business innovators, and leaders from around the region to discuss how to build a clean and more efficient energy system, one that in turn can support our goals for a clean and strong economy.

I’ve said this before: energy is THE issue of our time – both globally and here in the West. The central question is whether we shape the coming investment and development, or it shapes us.

Answering this question is more important than ever, given the challenges inherent in making the complicated transition from our 20th century energy infrastructure to new business models that can unleash the job-creation potential of low-carbon energy innovation and conservation.

We see the challenges every day…

  • In the increasing conflict around the import and export of fossil fuels;
  • In trade wars aimed at locking up market share for next generation energy products; and
  • In heated policy debate about leveling the playing field for clean energy.
  • And, especially important for this group, in the high cost of maintaining an outdated energy infrastructure;

Most concerning to me, however, is the fact that a troubling narrative is beginning to cloud discussions of, and solutions for, all of these issues: that sound environmental stewardship is a barrier to economic growth and job creation, when what we’ve found instead is tremendous economic potential in significantly scaling up our investment in energy efficiency and conservation.

I’m convinced that Oregon’s success at building an enduring prosperity for our state is tied to regional success on these fronts – to providing the leadership to building improved in-state partnerships, expanded multi-state collaborations, strategies that support clean energy opportunities, and smart programs based on conservation and restoration goals. We have a unique opportunity here to change the narrative and to demonstrate the value of meaningful energy policies through a collaborative approach.

That is why I am committed to strengthening partnerships with leaders from up and down the west coast and around the country to accelerate initiatives that support a vibrant clean economy. Initiatives like:

  • Moving away from boom/bust economic cycles that deplete our natural capital and leave us highly vulnerable to fluctuations to global recessions;
  • Creating and retaining economic activity and family wage jobs while reducing our carbon footprint;
  • Minimizing the need for imported energy, and;
  • Keeping capital circulating in our region through local sourcing, and supply chains.

Last month, I attended the annual Pacific Coast Collaborative Leaders Forum, gathering with leaders from British Columbia, California, Oregon, and Washington. We reaffirmed that clean economy collaboration and low-carbon innovation are central to our long-term competitive strategy. In fact, this kind of effort has already created a $47 billion regional market.

But there’s room to improve, which is why I joined B.C. Premier Christie Clark, Washington Governor Gregoire, and California Governor Jerry Brown in signing the 2012 Jobs Action Plan. It’s a roadmap to create up to 1 million more jobs in the next decade through new, measurable commitments to retrofit state-owned buildings, purchase advanced technology fleet vehicles, and create world-class energy standards to incentivize private sector leadership and advanced manufacturing.

We’re motivated by the fact that more 508,000 Pacific Coast residents from California to British Columbia are already cashing “green job” paychecks every week. We therefore reject the myth that jobs and the environment are in conflict – because our own experience and hard data shows otherwise. We know what other regions have yet to learn:

  • That the cleanest form of energy is the energy we don’t use and that scaling up investment in energy efficiency and conservation can drive our economy;
  • That the real potential of our extraordinary natural assets lies not in their exploitation, but in their restoration; and
  • That the global market is hungry for technologies, products and services that get things done more efficiently and at a lower cost – the keys to a clean economy.

Here are the facts: Job creation rates in the clean economy are well above those for other shrinking sectors of the economy. They pay better. And they have been more resilient to the recent economic downturn.

And now, the new West Coast Clean Economy Opportunity Study estimates that the regional clean economy could triple in size to $147 billion by 2020.

Our success in meeting that goal will depend on our willingness to develop new partnerships – partnerships that break boundaries – geographic, political, public/private – to define the new policies, programs and practices that in turn will define our energy and economic future.

This is why I requested the development of a 10-year Energy Plan for Oregon. I believe a long-term plan is the only way we can effectively make thoughtful, critical decisions as a state about the investment and infrastructure needed to transform our economy; the only way for communities – both urban and rural – to help shape their own future; and the best way to discuss the trade-offs of our energy choices and how to accommodate change while preserving what is most special about our state.

The goal for Oregon is clear: to prioritize and act on initiatives to reduce our dependence on carbon-intensive fuels and foreign oil; to develop home-grown renewable energy resources; to mitigate greenhouse gas emissions; to improve energy efficiency and create local jobs; to boost Oregon’s economy through investment and innovation; and to ensure a continued supply of affordable, reliable energy for our citizens and businesses.

I received 198 recommendations from a citizen Task Force in March – some of you in this room participated in that process and I thank you very much for the tireless work that went into it. I am now in the process of reviewing and synthesizing that work. I’m crafting a strategy built on three pillars:

  • Maximizing Energy Efficiency and Conservation
  • Promoting the Development of Clean Energy Facilities and Infrastructure by Removing Finance and Regulatory Barriers
  • Accelerating the Transition to Cleaner Transportation

Each of these initiatives will involve bolstering existing programs, pursuing regulatory changes, and tapping opportunities for the state to be a market driver through creative finance, purchasing, planning and governance.

The action plan will describe strategies through which we can chart a new energy future, one driven by our ability to harvest natural resources, such as energy from wind, solar, geothermal and biomass combustion, and through conservation and efficiency, simply using less, to power our state.

 

  • Maximizing Energy Efficiency and Conservation
  • Promoting the Development of Clean Energy Facilities and Infrastructure by Removing Finance and Regulatory Barriers
  • Accelerating the Transition to Cleaner Transportation

Each of these initiatives will involve bolstering existing programs, pursuing regulatory changes, and tapping opportunities for the state to be a market driver through creative finance, purchasing, planning and governance.

The action plan will describe strategies through which we can chart a new energy future, one driven by our ability to harvest natural resources, such as energy from wind, solar, geothermal and biomass combustion, and through conservation and efficiency, simply using less, to power our state.

Maximizing Energy Efficiency and Conservation

A central challenge for our future electricity system – and the one you have been discussing here today - is how to take advantage of those renewable and conservation resources and yet maintain a reliable electricity system.

We must, first, use electricity more efficiently – again, we know that the absolute cleanest and cheapest form of energy out there is the energy we DON’T use. 

Second, we must use energy more effectively. We can do this by deploying smart technologies to modernize the grid, integrating the State’s rich wind and renewable resources, and engaging our citizens as energy partners.

If we do this right, I’m confident we’ll be able to fulfill the Northwest Power Planning Council’s finding that 85 percent of the region’s energy needs over the next decade can be met through conservation.

Grid modernization occurs on both sides of the utility meter. Utility investments theoretically will enable the utility to manage demand, improve reliability, and better integrate renewable resources. Technologies within the home will enable consumers to respond to price signals and improve energy usage. Utilizing our own distributed energy resources, such as solar panels, will help power our own homes and feed energy back into the grid. Pilot projects and smart grid infrastructure will enable us to gain insight into and autonomy over the ways in which we can shift and lower our energy usage into and out of the home. If we optimize our existing energy resources we can leverage new analytics and communications infrastructures.

Many Oregon COUs and IOUs, including PGE, have taken steps to modernize their transmission and distribution systems and install smart meters to allow for two-way communication and data collection. What has lagged in Oregon (and nation-wide) is mass market adoption of technologies that allow consumers to respond to price signals and manage their energy usage.

Oregon, in collaboration with the BPA and other Western states, will be among the nation’s leaders in designing and deploying smart grid capabilities, including (1) advanced distribution systems (on both utility and customer sides of the meter), and (2) intelligent generation, transmission, storage, sensing, and control technologies.

Opportunities abound for utilities, business and civic leaders, and government officials throughout the West to act jointly and cooperatively to maximize the benefits of their shared economies and to minimize the overlap of efforts to address shared priorities and challenges.

And, as I said earlier, we can ensure more effective use of electricity by empowering consumers with information and choices. Today’s consumers are becoming more sophisticated and are capable of, and increasingly interested in, making active decisions about their energy consumption and its consequences.

By engaging citizens with newly available information, user-friendly technologies – like the ability to control one’s thermostat from one’s smart phone – and meaningful choices, they can serve as proactive partners – rather than passive passengers – they can help shape our energy future.

Here in Oregon, the Public Utility Commission is considering the adoption of voluntary rate designs which would educate consumers about the true costs of energy service. Coupling rates with smart grid and smart meter investments will send appropriate price signals to consumers. This will encourage them to take steps to manage their energy usage. More information will help consumers make better choices about the energy they use and when.

Promoting the Development of Clean Energy Facilities and Infrastructure by Removing Finance and Regulatory Barriers

The challenge is to scale and accelerate these types of innovative strategies across all sectors, to build out crucial energy infrastructure and make necessary investments at a time when public dollars are scarce.

These investments are absolutely critical to our future prosperity and will have a significant payback. So we must find a new way forward. I am therefore committed – and my staff has started working on – a West Coast Infrastructure Exchange concept with Treasurer Ted Wheeler and partners from California and Washington to find a new model of public-private financing for our critical infrastructure needs. I also know that to do this we must take a broader view of infrastructure – so we can aggregate opportunities and attract the right kind of capital; enhance our regional competitiveness; and create more good jobs. Investments in our grid, in our clean energy facilities, in our transportation and in related projects such as managing our water resources must be a part of this new, integrated picture. 

Accelerating the Transition to Cleaner Transportation

Finally, with regard to cleaner transportation, Oregon is one of only two states in the nation to have experienced a decline in vehicle miles travelled since 2000. Still, there is much more that can and must be done.

Transportation is the single largest contributor to Oregon’s carbon emissions, accounting for 34 percent of the total. Oregon’s roads accommodate four million registered vehicles for 2.7 million licensed drivers. Oregonians consume some 1.5 billion gallons of gasoline to drive 39 billion miles every year. That fuel costs Oregonians nearly 7 percent of their disposable incomes – nearly double what it was ten years ago. Moreover, gas prices are projected to rise, so we can expect this trend to continue unless we reconsider our transportation system and our driving habits.

We need to rethink future planning for our transportation infrastructure with targets to reduce demand and strategies to achieve those targets. We must engage communities throughout Oregon and to better understand how each community can reduce carbon emissions within its own respective transportation system.

And a key component of this must be capitalizing upon the emerging intersection between the utility system and the transportation sector.

The anticipated increased use of electric, compressed natural gas (CNG) and propane vehicles is creating a new role for utilities as they become fuel providers for the transportation sector. Further down the road, emerging technologies promise to leverage electric cars into mobile energy resources for the grid. Such trends pave the way for innovation, technology, and a rise in public-private partnerships.

Both investor-owned utilities and consumer-owned utilities, along with their oversight boards, councils and commissions, and the State, can help accelerate the early deployment of alternative fuel vehicle infrastructure, as can third-party efforts.

We are a relatively small state, but we are an innovative state. Oregon consumers have already shown their willingness to be early adopters of new technology. I want us to once again show the nation a new way of investing in our common future.

So let me conclude where I began with the question: Will we shape our energy future through or will it shape us? As William Jennings Bryan once said: “Destiny is not a matter of chance it is a matter of choice; it is not a thing to be waited for, it is a thing to be achieved.”

With your help, I am confident that our energy future here in the Pacific Northwest will be a matter of choice, not a matter of chance – and that we will chose a path that leads to a bright, prosperous and sustainable low carbon future.

 

 

 

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