All three of the natural gas companies in Oregon will have to fix their long-term plans to meet the state’s targets for reducing greenhouse gas emissions.
The Oregon Public Utilities Commission, which only has two members, said Thursday it could “not acknowledge” Cascade Natural Gas’ plans to meet the state’s greenhouse gas emissions targets by 2050. Last year, the commission, which regulates the rates charged by private electric and natural gas utilities, rejected similar plans from the two other gas utilities serving the state, NW Natural and Avista.
The commission regulates the rates charged by private utilities. The rejections mean the commission could challenge the companies when they seek rate increases or investment in infrastructure because their plans were rejected, experts said. The utilities serve a total of about 750,000 people across the state.
The commissioners and staff said the companies were “unreasonably optimistic” about future natural gas demand in a world of growing electrification and low prices. They said the companies are also relying too heavily on the rapid growth of less emissions-intensive fuels such as “renewable natural gas,” which is made from methane captured from animal waste and other processes, and “synthetic natural gas” made by blending hydrogen with carbon dioxide. These fuels are not widely produced and are still far too expensive, commissioners said.
Megan Decker, chair of the commission, said relying on nascent and still not scalable alternative fuels to reduce future emissions, rather than shifting some energy generation to renewable electricity, is something each company has not proposed at all.
“Some amount of electrification is going to be necessary,” she said. “That’s part of what’s missing.”
Brian Robertson, manager of resource planning with Cascade Natural, disagreed. He told the commission that company officials thought it was delivering on its promises.
“Cascade felt we did a sufficient job of modeling a long-term decarbonisation plan,” he said.
Companies present these plans to the commission every two years. They are a framework for how each will begin to reduce emissions to meet Oregon’s climate reduction goals while also ensuring affordability for customers. The Climate Protection Program would require fossil fuel companies to gradually reduce their greenhouse emissions 50% by 2035 and 90% by 2050. It was invalidated by the state’s second highest court in December in a lawsuit over required disclosures. But the state expects to revive the program by year’s end. Because of that, the utilities commission said Thursday that it is operating under the assumption that the gas companies will need to continue to shift their practices to comply with the state program.
Under the climate plan, natural gas companies were responsible for at least 26% of emissions reductions to meet state targets. Natural gas is almost entirely methane gas, among the most potent climate-warming greenhouse gases that trap heat in the atmosphere. One-third of global warming is due to human-caused emissions of methane, according to the U.S. Environmental Protection Agency. Nearly 40% of Oregon’s carbon dioxide emissions each year come from the burning of natural gas, according to the U.S. Energy Information Administration.
Cascade is the smallest gas utility in Oregon, with about 75,000 residential customers. Avista serves about 105,000 residential customers and NW Natural is the largest, with about 600,000 residential customers in Oregon.
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