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Oregon gas company criticized for using ratepayer money to fight state climate program

Cassandra Profita

Three nonprofit environmental groups are calling out Avista for raising natural gas prices while using ratepayer money on lawyers fighting climate regulations.

Oregon’s second largest natural gas provider spent ratepayer funds fighting state climate change regulations while simultaneously attempting to raise rates for customers.

During the last five years, Avista paid lawyers more than $51,000 to fight Oregon’s Climate Protection Program, according to records obtained by three environmental groups critical of the decision. The nonprofits Earthjustice, Sierra Club and Climate Solutions on Friday submitted the records, which showed the money came from an account funded by Avista’s 105,000 ratepayers, to the Oregon Public Utilities Commission. The commission is considering whether to allow the utility to raise residential rates 8% by year’s end.

Avista, along with the state’s two other gas utilities — NW Natural and Cascade Natural — has hired lawyers from San Francisco-based Baker Botts and Reno-based Snell & Wilmer to sue the Oregon Department of Environmental Quality.

The companies are challenging the agency’s authority to regulate greenhouse gasses under the climate program, which mandates a 50% cut in Oregon’s overall greenhouse gas emissions by 2035 and a 90% cut by 2050. At least 26% of that reduction will have to come from the natural gas utilities.

Natural gas is almost entirely methane gas, among the most potent climate-warming greenhouse gasses, which trap heat in the atmosphere contributing to global warming. One-third of global warming today is due to human-caused emissions of methane, according to the U.S. Environmental Protection Agency.

Avista’s senior legal counsel, Greg Hesler, said in an email to the Capital Chronicle that paying lawyers with ratepayer money will benefit those customers.

“We believe it is a prudent expenditure on behalf of our customers, and it is therefore included as a cost to customers in their rates,” he wrote. “Avista does not believe that the Oregon Climate Protection Program (CPP) provides a constructive pathway for reducing emissions, and that it negatively impacts our customers through reduced energy choice, higher costs and decreased reliability.”

The environmental groups disagree. Avista has already raised residential rates 18% since November 2022, an increase the company attributed to global supply and demand issues exacerbated by extreme weather events and Russia’s war on Ukraine.

Greer Ryan, a policy manager at Climate Solutions, said the utilities commission should reject Avista’s request to raise rates again while spending ratepayer money to challenge the state’s keystone climate change mitigation program.

“We hope the commission will agree with us and say it’s inappropriate for gas utilities to charge their customers for political activities, especially for activities that are against the public interest like dismantling landmark climate policies,” she said.

The payments to lawyers are one of many that environmental groups are beginning to challenge from gas companies that are imposing rate hikes on customers. Ryan said Climate Solutions and other groups will continue urging the Oregon Public Utilities Commission to join several other state commissions and agencies that have created rules banning or limiting the use of ratepayer money on political lobbyists and on dues and fees paid to industry trade groups.

“We want the commission to say, ‘In rate-setting situations moving forward, you cannot charge your customers for these expenses,’” Ryan said.

The Oregon Capital Chronicle is a professional, nonprofit news organization. We are an affiliate of States Newsroom, a national 501(c)(3) nonprofit supported by grants and a coalition of donors and readers. The Capital Chronicle retains full editorial independence, meaning decisions about news and coverage are made by Oregonians for Oregonians.

Alex Baumhardt is a JPR content partner from the Oregon Capital Chronicle. Before that Alex was a national radio producer focusing on education for American Public Media.