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PacifiCorp loses solar battle

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Friday, August 01, 2008

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PORTLAND Oregon’s burgeoning solar industry is back in business after a regulatory scuffle with PacifiCorp that jeopardized the future of $40 million worth of new solar installations statewide.

PacifiCorp filed a brief with the Oregon Public Utilities Commission in June seeking clarification on rules governing third-party-owned solar installations, in which companies build and operate photovoltaic systems on property owned by a municipality or nonprofit and sell excess power back to the grid.

The filing touched off a panic within the industry because third-party installations are widely considered an essential model for affordable solar projects, with giants such as Honeywell, SunEdison and RC Solar planning to invest millions in Oregon.

PacifiCorp spokesman Art Sasse emphasized that the goal was not to hinder progress but to establish clear rules regarding a development model that is growing in popularity. Critics accused PacifiCorp of creating uncertainty at a key moment for solar, with federal tax breaks scheduled to expire at the end of 2007.

A phalanx of clean-energy companies and trade groups lined up with government agencies and Oregon’s largest utility, Portland General Electric, to intervene in favor of third-party ownership deals. The interveners breathed a collective sigh of relief on July 14 after PUC attorney Michael Weirich opined that third-party owners are not electricity service suppliers, meaning they need not face the same burdensome regulations as do utilities. The PUC had not ruled by press time, but the ruling was widely expected to follow the staff opinion.

“We got everything we wanted out of that brief,” said Craig Ernst of the Oregon Solar Energy Industry Association. “It was a huge relief.”

It was also a blow to PacifiCorp, which was bought out by Warren Buffett’s MidAmerican Energy Holdings in 2006 and is also facing controversy over its dams on the Klamath River. In spite of the backlash, Sasse says PacifiCorp does not regret the move.

“We would do it every time,” he says. “Our industry is highly regulated. You have to follow the rules and you have to know what the rules are. Every marketplace needs clarity.”                                  

BEN JACKLET


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