Oregon Enacts Landmark Law to Counter Utility Resistance to Independent Solar and Clean Energy Projects
Key Insights
Oregon Governor Tina Kotek signed SB 688 into law, empowering the Public Utility Commission to implement performance-based regulation for electric companies.
The new law aims to address utility resistance to independently owned clean energy projects, including community solar and rooftop solar, by providing incentives and penalties.
Utilities have historically delayed independent projects due to a profit model that favors their own capital investments, hindering renewable energy deployment and impacting low-income subscribers.
Effective January 1, 2026, SB 688 seeks to align utility operations with public interest goals, fostering distributed energy resources and accelerating the state's clean energy transition.
Oregon Governor Tina Kotek has signed Senate Bill 688 into law, a pivotal piece of legislation designed to dismantle long-standing utility resistance to independent clean energy projects across the state. The new law, effective January 1, 2026, grants the Oregon Public Utility Commission (PUC) enhanced authority to implement performance-based regulation for electric companies, enabling the commission to incentivize and penalize utilities based on their alignment with public interest objectives.
This legislative action directly targets impediments faced by community solar, rooftop solar, and other distributed energy resources (DERs) not owned by utilities. Among the actions deemed "in line with the public interest" are expanding the use of DERs, fostering community solar projects, developing microgrids, and promoting demand-response and energy-efficiency programs. The bill passed with significant bipartisan support, clearing the House 36-13 and the Senate 17-10.
John Lower, Executive Director of the Renewable Energy Coalition, a staunch advocate for the bill, highlighted the critical issue of interconnection as a major impediment, describing utility delays as often purposeful "weaponization." Lower testified that investor-owned utilities derive profit from capital investments in generating resources, a return not earned from independently owned projects. This structural incentive, he argued, leads utilities to hinder independent development through protracted interconnection study processes, excessive requirements, and re-energization delays, particularly impacting Oregon’s community solar program and its low-income subscribers.
Lower cited the slow progress since Oregon’s 2016 law prohibiting coal power by 2030, noting that only 25% of systems in PacifiCorp’s service territory are operational nine years later. He emphasized that these delays not only jeopardize individual projects but also damage the reputation and financial viability of the community solar program and broader state policies aimed at customer choice and local carbon-free power.
Portland General Electric (PGE), however, opposed the bill, with Greg Alderson, PGE’s Senior Manager of State and Federal Government Affairs, stating that the legislation overlapped with existing policies and that PGE was already engaged in activities the bill sought to incentivize, such as supporting DERs and ensuring grid reliability.
In a related move, Governor Kotek also signed a separate bill expanding microgrid ownership beyond utilities, allowing municipalities, businesses, and communities to build and operate microgrids for enhanced resilience and infrastructure optimization. SB 688 represents a significant step towards rebalancing the energy landscape in Oregon, aiming to accelerate the deployment of affordable, reliable clean energy by addressing the underlying economic drivers of utility behavior.