Oregon’s public pension fund would head toward divesting itself of $1 billion in publicly traded investments in coal companies under a bill that won approval by the House.
The 33-24 vote on Monday, Feb. 19, was along party lines — no Democrat voted against it, and no Republican for it — and House Bill 4083 heads to the Senate.
Unlike broader versions that failed to advance from a House committee last year, the current bill is limited to coal used for fuel — but not oil or gas companies. It calls for no new investments in coal, advises but not mandates the state treasurer to phase out current investments, and requires a report to the Legislature by Jan. 15 of each year. Also, there is no target date for divestment. The earlier legislation would have required complete divestment by 2035.
Rep. Khanh Pham, D-Portland, said the current bill was the result of negotiations with state Treasurer Tobias Read since the 2023 session.
“This legislation is carefully crafted so that it protects the treasurer’s discretion and fiduciary duty, while also sending a signal that Oregon will phase out investing in thermal coal and has a minimal fiscal impact,” Pham said. “This measure is an immediate step forward to align our investments with our climate policy and is consistent with the treasurer’s fiduciary duty to protect the pensions of more than 400,000 Oregonians.”
The treasurer is one of five members of the Oregon Investment Council, which oversees the management of Oregon’s public pension fund, estimated at $93.8 billion in January. The Public Employees Retirement System covers 160,000 retirees and more than 200,000 active workers in state and local governments.
The current bill does not affect other state investments, but the pension fund by far is the state’s largest — and the nation’s 15th largest of its type.
On Feb. 7, just after the opening of the 2024 session, Read presented a presented a plan to the council for a broader divestiture by 2050. The plan calls for gradually increasing investment in public equity (stocks) related to the transition to alternative energy, raising the state’s share of such investments in private equity and real assets from $2 billion to $6 billion by 2035 — and no new investments in primary fossil-fuel ventures.
Oregon requires its two largest private utilities — Portland General Electric (PGE) and Pacific Power — to draw all their power from carbon-free sources by 2040. Since PGE shut down its plant in Boardman in 2020, Oregon has no operating coal-fired power plants, but utilities draw some coal-fired power from outside the state. Oregon also has set a target of 90% reductions from current (2017-21) greenhouse-gas emissions by 2050, though because of a Dec. 20 decision by the Oregon Court of Appeals, the Environmental Quality Commission is going through a new round of rulemaking this year.
Only one state (Maine) has divested itself of fossil-fuel investments, but several university endowments have, including those held by Oregon's public universities.
The Legislature has passed bills shaping state investment policy twice. In 2005 it did so aimed at companies doing business in Sudan, after genocide in the Darfur region, and again in 2012 for companies doing business in Iran. It did so in 1987 for companies doing business in South Africa, but repealed it in 1991 after negotiations began that led to the white minority government ceding power to a Black majority government in 1994.
Republicans questioned the latest proposed divestiture and said lawmakers should not interfere with state investment policy.
Rep. Virgle Osborne, R-Roseburg, said Oregon is narrowing its potential sources of power. “I think we need to slow down and think about what we are doing,” he said.
pwong@pamplinmedia.com
Most Popular
Comments / 0