ETO - Keep it or toss it? That is a question that needs an answer. The BB hits another home run.

Your pain is the Energy Trust’s gain

Bend Bulletin

Published: January 26. 2011 4:00AM PST

Pacific Power customers scrambling to work this year’s double-digit rate increase into their electricity budgets should be sure to set aside a little extra for the tax man, better known as the Energy Trust of Oregon. Their pain is the Energy Trust’s gain.

Most people know the Energy Trust as the government-created nonprofit that conducts free home-energy audits. Of course, nothing the Energy Trust does is really free. But many of the people footing the bill know little about the trust or, we suspect, its claim on their hard-earned money. So here’s a little history.

Back in 1999, the Legislature told the state’s two big utilities (Portland General Electric and PacifiCorp, which operates in Oregon as Pacific Power) to apply a 3 percent charge to all retail electricity sales. This charge is merely a tax by another name, and the money it generates is used for a variety of purposes. Some goes to education service districts to make schools more energy-efficient. Some pays to weatherize low-income housing. But most, almost 75 percent, of the so-called “public purpose charge” goes to the Energy Trust, which uses the electricity tax revenue to fund energy conservation programs and subsidize renewable energy projects.

The tax revenue that flows through the Energy Trust’s hands is significant. During the 18-month period from January 2009 through June 2010, the trust’s portion of the electricity tax amounted to nearly $86 million, or roughly $57 million per year. Among the projects subsidized with that money, according to a December 2010 Energy Trust report, are numerous wind generation facilities, solar installations and, last but not least, a project that collects methane percolating through the Douglas County landfill.

The trust’s funding mechanism ensures that Oregonians will continue to pay for more of the same — lots more. When you receive a fixed percentage of an ever-rising number, as the trust and its electricity-tax partners do, you collect more and more money whether you need it or not. Thus, while Pacific Power had to make a case to the Public Utility Commission for the rate increases that kicked in last month, the Energy Trust automatically capitalizes on Pacific Power’s work. You know, kind of like a parasite.

PUC spokesman Bob Valdez acknowledges that “as retail bills go up, the share that goes to the Energy Trust for energy conservation ... goes up as well.” But he says the “Legislature did that so it would keep track with inflation and also accommodate a growing number of customers and ... be there for any emerging technology that might come up.”

Maybe so. But it’s hard to believe lawmakers back in 1999 supported the weirdness at work today. One of the justifications for Pacific Power’s recent hikes is the cost of “green” power, which Oregon’s renewable portfolio standards require utilities to provide. Thus is the high cost of Oregon’s renewable energy mandate forcing Oregonians to pay more money to a nonprofit that subsidizes ... renewable energy.

But it gets crazier still. Last September, the PUC allowed Pacific Power to apply a 1.7 percent surcharge to electricity bills in order to pay for the removal of several dams. The electricity tax applies to that portion of Oregonians’ electricity bills, too, says the PUC’s Valdez. Thus, must Oregonians pay the Trust more simply because they have to cough up money to help fish. One environmental tax begets another.

Fortunately, the burden imposed by Oregon’s electricity tax can also be a great opportunity. It all depends on the willingness of lawmakers to help taxpayers despite the certain objections of environmentalists and organizations that feed on electricity tax revenue. Lawmakers who do respect taxpayers should ask, first, whether the Energy Trust has become obsolete. It seems to us that the proliferation of subsidies and mandates supporting efficiency and renewable energy are quickly making it so.

Moreover, the trust’s funding mechanism forces Oregonians to pay an environmental tax on other environmental taxes. They must pay twice, for instance, for the state’s renewable portfolio standard. They pay once in the form of higher electricity costs and once again in the form of increased electricity-tax contributions.

Well, here’s an opportunity for lawmakers to prove that they can cut expensive programs that have outlived their usefulness. Better yet, by doing so they can pat themselves on the back — with justification — for doing something to moderate electricity costs that their own policies are driving skyward.

Cylviagate, Part Next

The investigation of Governor John Kitzhaber's companion Cylvia Hayes and the Department of Energy continues.

Rain on Snow Event

Sandy River Flood.

U.S. wins trade case, Canada must stop subsidizing lumber mills

Published: Friday, January 21, 2011, 6:02 PM     Updated: Friday, January 21, 2011, 6:09 PM

 By Richard Read, The Oregonian 
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Ontario and Quebec must stop subsidizing lumber manufacturers or levy nearly $60 million in tariffs on Canadian exports to level the playing field for U.S. producers, a trade tribunal ruled Friday. 

Steve Swanson, chairman of the U.S. Coalition for Fair Lumber Imports, welcomed the ruling. "By providing new subsidies, Canada knowingly violated the terms of the lumber trade agreement to provide an unfair advantage to Canadian producers in this very challenging market," said Swanson, president of Swanson Group mills in Glendale. 

The tribunal of the London Court of International Arbitration found that the provincial subsidies violated a U.S.-Canada softwood lumber trade agreement reached in 2006. Under the agreement -- effective for seven years -- Canada collects export taxes on shipments of softwood lumber to the United States when lumber prices fall below certain levels. The agreement prohibits Canadian federal and provincial governments from circumventing these tariffs by increasing subsidies beyond those in effect in 2006. 

The U.S. coalition began dispute proceedings in 2008, citing plans by Quebec and Ontario to provide hundreds of millions of dollars in grants, subsidized loans and loan guarantees. The decision issued Friday requires Canada to end the illegal subsidies or levy additional tariffs. If Canada doesn't act within 30 days, the United States can slap import duties on Canadian lumber. 

U.S. Trade Representative Ron Kirk applauded the ruling, saying the result is "important for U.S. workers, firms and our softwood lumber industry." 

Peter Van Loan, Canada's international trade minister, said the ruling could have been much worse for Canada. He noted the tribunal dismissed 97 percent of the initial U.S. claim of $1.86 billion. 

The decision is the second consecutive win for the U.S. at an arbitration tribunal. The court previously ruled against Canada over the calculation of export quotas in 2007. 

Canada's lumber industry faces a bigger threat from a third U.S. case, filed Tuesday. The United States claims British Columbia has been misgrading and underpricing publicly owned timber in the province's interior region, hurting U.S. producers. Canada denies the allegations, saying trees damaged by a mountain pine beetle infestation are being graded and sold correctly. 

If the United States wins the next case, Canada's bill could reach nearly $500 million. 



--Richard Read 

Oregon’s Legislature and Governor Working Together—United We Stand

Rep. Richardson's Newsletter
January 21, 2011

Oregon’s evenly divided House (30 D’s & 30 R’s) has begun its 2011 Legislative Session with a co-governance model—Co- Speakers, Co-Committee Chairs and equal numbers on every committee.
The most crucial issue facing this Legislature will be balancing the State Budget. We are in a financial vise--a time when revenues have dropped more than $1 Billion since the end of the 2009 session and expenses are skyrocketing. To help solve Oregon’s budget crisis, I have been chosen as one of the House Co-Chairs of the Ways & Means Committee and Rep. Peter Buckley (D-Ashland) is my counter-part. Peter and I have worked together over the years and we are both committed to taking the necessary steps to deal with declining revenues in the most even-handed and responsible way we can.
Earlier this week, I had the opportunity with Rep. Buckley to give a budget update to a group of human service providers in Medford. To see the budgetary and economic status update I gave, (Click here.) To see Rep. Buckley’s remarks, (Click here.). And, to see the Q. and A. session following our remarks, (Click here.)
Oregon waits anxiously for Governor Kitzhaber’s first “Governor’s Recommended Budget”, to be unveiled on February 1st. In recent weeks there have been multiple, unprecedented meetings between our Legislative leaders and Governor Kitzhaber. Such collaboration is both appreciated and beneficial in doing the people’s work. For the first time since I joined the legislature in 2003, there is a feeling of unity between the Executive and Legislative branches of government. Such cooperation will be vital if we are to address Oregon’s economic challenges in a timely, effectively and professional manner.
The Governor has released the following general budget guidelines for his 2011-13 State Budget:

- Achieving Our Vision for Oregon. The focus of how we invest our limited resources in the next two years must be on building the foundation for a better future rather than on simply perpetuating the past.- Managing within Available Resources. I have reviewed each agency and program and established a funding floor set at the level of General Fund and Lottery Fund resources the state currently has to spend assuming no additional federal funds will be made available. I then allocated the resources from the expected revenue growth over the next biennium to help transform service delivery rather than simply accepting the spending practices of the past.
- Changing the Way Public Services are Delivered. It is clear that in order to maintain important public services over the next two years - especially education and health care - we must change the way those services are delivered.
- Prioritizing Early Childhood Services. To secure Oregon's future we must recognize that the foundation of academic, social and economic success lies in the early childhood years. Therefore, the single most important action we can take to shift our pattern of investment from addressing problems after they have developed to preventing them in the first place is a sustained investment in early childhood. (For complete article, Click here.)

Governor appears to be focusing on a reality-based-budgeting process for the future, which will be a logical strategy in consideration of our previous Governor’s Reset Cabinet findings. (Click here.)

The challenge for Governor Kitzhaber will be to stay strong in the face of stormy opposition. History has shown, “reform” is frequently discussed, yet rarely implemented as a result of the powerful coalitions that unite against it.
Disappointment results when hope for reform fails to contemplate the reality of power.
Nevertheless, this truly is time to, as the Governor has stated, “break decisively from the past.”


NATURAL RESOURCES
As a legislator from a rural Oregon district, I can say from experience that rural Oregonians care deeply about the environment, and they would like to have it managed, not placed off-limits. Once again, I come from a viewpoint that it is private enterprise that creates prosperity; government does not.
My suggestions to create private jobs in rural Oregon is to recognize that for more than 100 years, rural Oregon had a vibrant, natural resource based economy, and with the change in attitudes toward logging, mining, fishing, etc., has been in an economic recession for nearly 30 years.
To stimulate jobs in rural Oregon, while recognizing the need to protect the environment, it is time for a move to middle ground. Suggestions to do so might include:
--Create/restore Oregon’s 100-year forest management plan. Consider the rationale for viewing timber as Oregon’s renewable resource/crop. It has been said that historically, timber is to Oregon what corn is to Iowa. (I know this is dicey, but I still am placing in on the table—especially since rural counties, such as Curry and Josephine may well go bankrupt after the four-year federal timber-money payment extension terminates in 2012. What can we learn from the decade of high Oregon unemployment and decrease in Oregon’s per capita incomes when compared with the rest of the nation? Something must change if we are to break the rural-recessionary cycle.)
--Remove barriers to generating bio-electricity with forest products—slash and downed timber that has turned Oregon forests into tender-boxes waiting for the next conflagration. (Bio-mass generated electricity would also help Oregon to be less dependent foreign sources of power and fuel.) With Oregon’s emphasis on electric vehicles, we will need large amounts of low-cost electricity to recharge them, and bio-mass could provide it.
--Remove barriers to and promote research for converting forest products into ethanol. (Legislating the 10% ethanol requirement for Oregon gasoline has been a great boon for corn-producing states, but may have been premature for Oregon.) Forest product/bio-mass ethanol would be a great boon for Oregon. It would create thousands of rural Oregon jobs, help generate inexpensive electrical power and could save many jobs at Boardman.
The 2011 legislative session is one of both crisis and opportunity. It will require a joint effort by the Governor and the Legislature to rise to the occasion. I believe both are ready, willing and able to do so. United we stand…
Sincerely,

Revitalize the Forest Cluster?

What is the “Forest Cluster” and what will it take to revitalize it?  The forest cluster is private firms and public organizations that “support production of and benefits from primary and secondary wood products.”  In other words, an Economic Development Strategy for the forest/timber community.

The notion of clusters was introduced at the Oregon Business Plan Summit in 2006.  The Forest Cluster Work Group has been meeting since 2007. Here is a memo on the status of the Forest Cluster as of 12-1-2010  Recently, the Forest Cluster group has expanded to include private forestry and timber representatives in an effort to develop action items for the Board of Forestry and the Oregon legislature. 

As a critical response to the economic and employment problems Oregon faces, the BOF and the Oregon Business Plan are using the “cluster” concept “to make things happen.”  Stay tuned.

United States picks international trade fight with Canada over softwood lumber

Published: Tuesday, January 18, 2011, 8:11 PM     Updated: Tuesday, January 18, 2011, 8:11 PM

 By Richard Read, The Oregonian 

Randy L. Rasmussen, The OregonianThe United States contends Canadian timber policies violate a 2006 agreement and harm Pacific Northwest mills like Seneca Sawmill Co. in Eugene, which processes Douglas fir into lumber.

 The United States aims to take Canada to the woodshed over what trade officials contend is under-priced British Columbia timber that unfairly competes with U.S. lumber companies and workers. 

U.S. Trade Representative Ron Kirksaid Tuesday the Justice Department would file for arbitration under a softwood lumber agreement signed in 2006 after years of disputes. Kirk said British Columbia was selling timber harvested from public lands for prices below amounts set by the agreement, undercutting mills in the Pacific Northwest and other regions. 

"This type of benefit harms U.S. workers and firms in the lumber industry and is inconsistent with Canada's obligations," Kirk said. "Canada is in breach of its commitments." 

Canadian government and industry officials rebutted the claims. 

"There's no substance to this," said Pat Bell, British Columbia's minister of forests, mines and lands. "We should be working on developing other markets together, like Korea, like China, like India." 

Disputes over U.S.-Canadian lumber trade are as old as the hills. But in this round, the United States contends British Columbia resorts to a new tactic, improperly grading timber as beetle-killed salvage material and selling it for pennies per cubic meter to Canadian mills. The mills turn the timber into lumber sold cheap in America, hurting U.S. businesses and workers, said Steve Swanson, an Oregon lumber producer who chairs the U.S. Coalition for Fair Lumber Imports. 

Swanson, chief executive of Glendale-based Swanson Group, said British Columbia should reverse its practices, charge proper timber fees and levy export taxes to even the playing field. 

"North American lumber producers have curtailed production, closed mills and been forced to let go thousands of workers," Swanson said. 

The Justice Department is requesting a judgment by a tribunal of the London Court of International Arbitration. 

John Allan, president of the BC Lumber Trade Council, said U.S. officials brought the latest action in response to political pressure. 

"It seems to be an attack on how we manage our forests with respect to the mountain pine beetle," Allan said. "They're basically saying, 'You should have left those trees to die on the stump.'" 

Bell, the forests minister, said British Columbia grades timber just as it did before the 2006 agreement. Lumber prices are higher than expected, proving the agreement works, he said. China is also buying lumber, he said, due in part to Canadian marketing. 

Chinese purchases also helped sustain a Swanson mill in Glendale that would have closed as unfair Canadian competition intensified, said Zoltan van Heyningen, the U.S. lumber coalition's executive director in Washington, D.C. 

"Hopefully this case will help enable it to keep open," van Heyningen said. 

--Richard Read