A proposal from Cascade Natural Gas to cut greenhouse gas emissions was refused last week. That comes after the Oregon Public Utilities Commission last year shot down plans by NW Natural and Southern Oregon provider Avista. The industry must now figure out better ways to satisfy the Oregon Department of Environmental Quality’s Climate Protection Program. JPR’s Justin Higginbottom spoke with Alex Baumhardt, environment reporter at the nonprofit newsroom the Oregon Capital Chronicle, who broke the story about what the commission found lacking in those plans.
Justin Higginbottom: First, can you tell me about the state's target for reducing greenhouse gas emissions?
Alex Baumhardt: Yes, so the target is to cut greenhouse gas emissions 50% by 2035 and 90% by 2050. And about 26% of the cut has to come from natural gas companies, because natural gas is almost entirely methane. And that's a really potent greenhouse gas trapping heat in the atmosphere. It's worth noting that the program is on ice for the next year. It's sort of hung up in a lawsuit that the natural gas companies have brought against the state. But suffice to say, the state is going through this process in the next year redoing the program and it’s expected that early next year it will be totally back in action.
Justin Higginbottom: Why did the Oregon Public Utilities Commission reject plans by these three gas companies — Cascade Natural Gas, NW Natural and Avista — to meet emission targets?
Alex Baumhardt: They found these plans to be overly optimistic about the future of natural gas, especially in a world of increasing electrification. Globally, electricity has never been cheaper than it is today. It's being made from so many different renewable sources. On top of that, a lot of the plans rely on these nascent gas industries like renewable natural gas, which would capture methane from cows, or creating synthetic natural gas. I think these companies put that in their plans to say, “We're not going away, look at all these alternatives that are less carbon intensive.” The commission says those are way too expensive, they're not available wide scale and you can't rely on them as much as you are to meet these future targets.
Justin Higginbottom: So those new technologies just aren't really ready for wide use by consumers. What might these decisions mean for the companies?
Alex Baumhardt: Every two years they have to present these plans to show the state that they're on track or trying to be on track to meet these emission reduction targets. It means they have to make better plans. So when they come back to present this, they need to show that they're on track. On top of that, all of these utilities have repeatedly asked for rate hikes. Cascade Natural Gas, which was the last to meet and present their plan, already said they're planning to ask for a rate hike later this year. It's going to be hard to make the case that you want to raise rates on customers if you're also not meeting your climate targets. And the Oregon Public Utilities Commission gets to say yes or no to a rate hike. So it means it might be harder to ask for that. And it means when they come back they need to have a better plan.
Justin Higginbottom: Did the commission propose any solutions for these companies?
Alex Baumhardt: They're proposing that electrification needs to be a part of their future plan. There's just not a universe in which you meet these emission targets on alternative methane. And so I think they're saying: “Be realistic. If you can assume any part of your future plans involve electrification, we would believe that you are going to make these targets.” So that's the solution. The companies need to show they considered the possibility that electrification will play a bigger role in future business.
This interview has been edited for length and clarity.
