Oregon’s 2026 Legislative Session Comes to a Close
As part of our agency mission and vision, the Oregon Department of Energy carefully watched the 2026 legislative session, which opened February 2 and closed March 6. So that our work in the future is well-informed, we paid attention to all legislation that touches the energy sector. We provided information on energy topics to ensure informed decisions about legislation and legislative action. In addition, we followed bills that could affect our own work and were engaged in conversations about our agency budget.
Just after the 2025 Legislative Session, Congress passed House Resolution 1, a sweeping bill with several provisions that affected Oregon. This included both short-term and long-term budget shortfalls, as well as implications for the energy sector. The 2026 short session was centered on those budget shortfalls, with agencies – including the Oregon Department of Energy – prepared to help address the gap between existing budgets and available funds.
As session got started in the first week of February, an updated revenue forecast predicted higher than anticipated corporate tax receipts. Later in session, the Legislature considered and passed SB 1507, which “disconnected” Oregon from some pieces of the H.R. 1 tax cuts. That combination filled some of the budget gap. Cuts still had to be made, but for the most part, state services were protected from major impacts. However, longer term budget issues created by H.R. 1 remain on the horizon as the state has to adjust to significantly less federal funding for Medicaid, SNAP, and other important programs.
H.R. 1 also had effects on the energy sector that led to legislation. For example, tax credits for renewable energy projects passed in the 2022 Inflation Reduction Act were revised and the timeline for projects to be eligible shortened by H.R. 1. This created a sense of urgency around the permitting of renewable energy projects, which led to the consideration and passage of HB 4031. That bill allows a developer of a renewable project of any size to go through county-level permitting rather than state-level permitting if they are eligible for the federal tax credit. Another energy facility siting bill, HB 4076, benefitted from the sense of urgency to get projects going quickly; that bill makes it either automatic or easier to receive a land use exception for new energy projects located near existing ones that can make use of both grid-related infrastructure and interconnection agreements already in place.
In addition to state budget woes due to H.R. 1, the state was also falling behind the nation in its economic recovery post-pandemic. As a result, the Governor and the Legislature were looking for ways to promote economic growth. Meanwhile, electricity load growth forecasts for the Pacific Northwest made it clear that clean energy and transmission projects would need to be part of any economic development package. The Oregon Department of Energy, therefore, was mentioned in the Governor’s economic development bill (HB 4084) and in two other bills (HB 4020, HB 4021), all three of which were designed to make permitting processes across multiple agencies more efficient.
Because of the greenhouse gas emissions and energy implications of the transportation sector, the Oregon Department of Energy paid close attention to continued dynamics regarding the transportation package passed in the 2025 September special session. Signatures were collected to refer the tax and fee pieces of the package to the November ballot. In the short session, SB 1599 moved the referendum up to the May ballot and also included a package of cuts to Oregon Department of Transportation programs and staff to redirect funding to address the budget shortfall. This included cuts to programs that reduce greenhouse gas emissions, such as Safe Routes to Schools and transportation electrification programs.
While building new clean energy projects and transportation funding were the highest profile energy issues of session, a few other bills passed as well. HB 4029 will protect purchasers of residential solar projects from fraudulent sales and lending practices. HB 4086 calls for Business Oregon to create an industrial symbiosis road map. HB 4077 allows a pathway for utilities to pay for insurance via bonds and securitization. HB 4100 requires the owners of fuel terminals to prove their ability to pay for cleanup in the event of a spill.
Otherwise, it was a tale of what did not pass. This included bills that would have created a Climate Superfund to pay for the effects of climate change in Oregon (SB 1541), studied the potential for nuclear energy projects sited in Oregon (HB 4046), moved the state toward allowing plug-in or “balcony solar” (HB 4080), created new financing mechanisms for energy projects (SB 1526 and SB 1588), advanced more residential energy projects to benefit the grid (SB 1582), and determined where liquid fuel could be stored in the state (HB 4032).
You can read more about all of these bills and the session in general in ODOE’s 2026 Legislative Session Report.