NWGA Letter to Oregon Department of Energy Regarding Oregon Energy Strategy

May 7, 2025

Oregon Department of Energy, via OES comment portal

RE: Oregon Energy Strategy (OES) comments

To Whom It May Concern,

The Northwest Gas Association (NWGA) represents the natural gas utilities and transmission pipelines serving warmth and comfort to over 800,000 households and 86,000 businesses, institutions, and industries in Oregon. We respectfully submit the following feedback regarding development of the Oregon Energy Strategy (OES). Our comments are intended to enhance the OES process and to contribute to a comprehensive, responsible, and sustainable energy strategy for Oregon’s future.

As the Oregon Department of Energy (ODOE) and stakeholders continue to work on the OES, two considerations must be paramount: 1) Energy decarbonization must be balanced with energy availability and energy affordability. Unreliable, unaffordable energy risks public support for decarbonized energy. 2) A successful strategy must incorporate a clear-eyed view of what is doable; of the current realities of the energy delivery system. Physics and economics will ultimately determine what can be accomplished.

NWGA has been engaged in an executive-led, regional gas-electric coordination initiative (Initiative) with the Pacific Northwest Utilities Conference Committee (PNUCC) over the past year. (PLEASE NOTE: these comments are NWGA’s. We do not speak for PNUCC or its members.) One of the work streams of the Initiative was a 3rd Party review conducted by Guidehouse of nineteen different regional energy retrospective reports, forecasts and decarbonization studies.1 The Guidehouse report is the analytical foundation for the following observations relating to regional energy adequacy and resilience.

The region is dangerously close to experiencing significant energy supply disruptions, which could lead to blackouts during peak demand events

• Energy emergencies during extreme weather events are increasing in frequency and threatening reliability. The multi-day cold snap in January 2024 is the most recent in a string of examples.

  
  

• Meeting peak demand for energy during the multi-day cold snap in January 2024 required execution of emergency operations and procedures, careful coordination between natural gas and electricity providers, customer response to energy conservation requests, and electricity imported from the Desert Southwest and the Rockies.
  

• The Western Power Pool (WPP) found peak load in many Balancing Authority Areas (BAA) during January 12-14, 2024 was consistently over historical peaks or at or near peak load for an extended period. The Pacific Northwest relied on nearly 5,000 MWs of electricity imports on average to maintain system reliability during the cold snap.
  

• The region’s electric and natural gas delivery systems operate at their limits during severe weather, with no excess capacity to serve increasing peak loads. When combined with unplanned infrastructure curtailments and depleted underground storage inventories, prolonged events test the system. While the Pacific Northwest has endured cold weather events by rapid emergency response coordination, these situations demonstrate how close the region is to exceeding deliverability capacity.3

  
  

Demand for energy in the Pacific Northwest is projected to surge.

• The Pacific Northwest Utilities Conference Committee (PNUCC) projected demand for electricity in the Pacific Northwest could grow by over 30% in the next decade. This surge of about 7,800 average megawatts equates to enough electricity to power seven cities the size of Seattle.. The increase in demand is attributed to the rapid expansion of data centers, high-tech manufacturing, and the trend toward electrification.
  

• PNUCC’s 2025 Northwest Regional Forecast shows the region’s utilities may need as much as 30 GW nameplate capacity of new resources in the next 10 years to meet this surge in demand.4
  

• The Western Electricity Coordinating Council’s Assessment shows current resource plans across the entire Western Interconnection include 172 gigawatts of new generation capacity in the next ten years—more than double the generation capacity added in the last decade. Never has generation been built in the West at the rate called for in many current resource plans.5
  

• Overall demand for natural gas in the Pacific Northwest is forecasted to grow, as demand for electricity grows. However, existing pipeline capacity utilization is already maxed during peak events. Meeting this new energy demand can’t be done without adding new delivery capacity including natural gas pipelines, electric transmission and storage in both systems.

• Resource adequacy remains a critical risk—planned resources may be insufficient to meet future demand.

Regional assessments rely on capacity additions at risk of not being deployed

• Siloed planning in gas and electric systems has a detrimental effect on overall energy reliability.6
  

• Energy system failures are a public health issue. They also result in higher costs for consumers stemming from high market prices and the acquisition of emergency or unplanned capacity.7 These unnecessary cost increases make investment in the energy transition even more expensive for ratepayers.
  

• According to WECC, between 2018 and 2023, approximately 76% of the proposed resource additions came online in the year scheduled. In 2023, only 53% of the new generation resources scheduled to come online that year actually came online; the rest were delayed or cancelled.
  

• Risks to planned resource additions include supply chain disruptions, uncertainty in the interconnection process, siting delays and increased costs. Each of those barriers introduces significant risks to reliability.
  

• Finally, in 2027 the Woodfibre LNG export facility in BC will come online and will require a significant amount of gas capacity, which will further strain the region’s energy system capacity until any new contemplated capacity becomes available.8

The natural gas system delivers more than two thirds of the energy consumed during the coldest days of the year, as well as fueling a significant share of electricity generation at the same time. Because natural gas is the region’s second-largest power source after hydro9, its role will persist as electricity demand rises, and new generating resources are developed. The dependence on natural gas for power generation has never been higher10, demanding more from the existing constrained pipeline capacity network and highlighting the need for adequate storage.

Increasing interdependence between natural gas and electricity providers demands greater awareness and enhanced coordination to mitigate risks to the region’s energy system.11 As demonstrated by the Gas-Electric Coordination Initiative, industry leaders recognize the need for enhanced coordination that emphasizes the importance of a shared understanding of regional energy planning and risk assessment.

To ensure a resilient and sustainable energy future for the Pacific Northwest, stakeholders – including policymakers, utilities and customers – must collaborate on actionable solutions. This includes supporting clean energy projects at a realistic pace to balance affordability while also investing in the natural gas system. Here are a few specific suggestions to consider including in the OES:

• Convene utility energy planners – Identify similarities and differences between gas and electric planning (e.g. reserve margin vs design day; transmission and distribution system reliability and resilience criteria, etc.) and to identify action items that move us toward more integrated gas/electric planning (e.g. analyze a common scenario and compare notes for insights).
  

• Convene stakeholders to develop solutions that accelerate energy infrastructure development – Identify administrative and policy barriers that prevent or impede addressing energy system constraints. Propose changes that facilitate and expedite appropriate system growth. WECC warns if new resources are significantly delayed or cancelled, much of the Western Interconnection may not be resource-adequate over the next decade.
  

• Conduct a literature review – Identify common findings, differences and analytical gaps across a variety of energy-related studies and reports relevant to Oregon. Convene an expert stakeholder group to provide insight and guidance. Use the findings to identify administrative or policy actions that will contribute to improving energy adequacy.

Energy policy decisions must be made with great care. They shape not only the state’s environmental future but also its economic health and the everyday lives of our residents. Fostering an equitable, reliable, and sustainable energy transition for Oregon will require balancing energy affordability, energy availability and energy decarbonization while adopting a sober-minded view of the capabilities of our energy delivery system.

Thank you for considering our comments and suggestions. We are committed to collaborating and contributing constructively to this important work.

Sincerely,

DAN S. KIRSCHNER

Chief Executive Officer

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