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October 25, 2022

Oregon Regulators Protect Utility Customers and Climate in Paring Down NW Natural Rate Request

The Oregon Public Utility Commission ordered that the gas utility cannot charge households for aggressive anti-climate lobbying, promotional advertising, and investments in gas system expansion

Contacts

Carra Sahler, Green Energy Institute at Lewis & Clark Law School, sahler@lclark.edu, (971) 213-9480

Kristen Boyles, Earthjustice, kboyles@earthjustice.org, (206) 930-6660

Portland, OR

Oregon regulators partially rejected a proposal from the state’s largest gas utility, NW Natural, to raise gas bills to pay for gas system expansion, political lobbying to local governments to prevent climate action, and promotional advertising expenses, among other things. The Oregon Public Utility Commission’s (OPUC) decision today marks a major victory for Oregon ratepayers, and the group of climate, environmental justice, and community-led social justice organizations who intervened in the proceeding.

“The escalating climate crisis demands smarter energy choices. The Commission’s Order — limiting charges for new gas lines, misleading advertising, and pro-gas lobbying — reflects serious concern about NW Natural’s spending. It’s clear that NW Natural’s ratepayers should not bear the costs of a dying industry during a climate emergency,” said Kristen Boyles, attorney at Earthjustice representing the community groups.

The Commission took an important first step in reevaluating incentives for gas-system expansion during this climate emergency. Stating that continued use of NW Natural’s current line extension allowance would be “problematic,” the Commission set up a system of declining subsidies over the next three years for line extension allowances, which are subsidies for new gas hook ups.

The Order also approved the expansion of a low-income energy efficiency program, in part due to advocacy by community-led organizations like Community Energy Project. “This is an important move to make sure that our clean energy transition is more affordable. Now qualified customers may receive $4,000 per dwelling to make important improvements to their homes that save energy and increase comfort, including implementing critical health and safety measures,” explained Alma Pinto, Climate Justice Associate at Community Energy Project.

The Commission also slashed NW Natural’s requested rate increase for lobbying expenses. The Order specifically referenced the utility’s communications with local governments, including Multnomah County and Milwaukie city councilors, in its reasoning. It described NW Natural’s communications to local governments on climate policies or gas bans as “particularly problematic” and agreed that NW Natural should deduct a portion of its Community and Government Affairs expenses from rates. The Commission demanded NW Natural “provide detailed expense information that clearly categorizes its activity” in the future to ensure “meaningful stakeholder review of political activity[.]”

NW Natural’s attempt to recover costs for the printing and distribution of activity books targeted at school-age children that painted methane gas in a positive light, and associated it with pizza, cute animals, and baseball was also of note. In the Order, the Commission pointed out that asking children to identify natural gas as “clean” and diesel as “dirty” has “nothing to do with the purported safety messaging goal.” The Commission cautioned NW Natural to “carefully track its advertising costs” and ensure “expected expenses do not include promotional elements.”

“Marketing fossil fuels to children is wrong, period. Asking Oregon utility customers to foot the bill for this greenwashing school curriculum is even more unconscionable. Oregon regulators made the right decision today in choosing to protect Oregonians from this abuse of ratepayer dollars,” said Greer Ryan, Clean Buildings policy manager at Climate Solutions.

In their intervention, public interest groups were particularly concerned about the rate increase adding to the already high energy burden of residential ratepayers. Because of the advocacy from the group of climate, environmental justice, and community-led social justice organizations, along with ratepayer advocates at the Citizens Utility Board (CUB), the Commission rejected a significant portion of this increase request. However, even with the Commission’s partial rejection of NW Natural’s rate increase, Oregon ratepayers are still facing a significant bill increase this year.

“Oregon utility customers should not have to pay higher utility bills to bankroll a fossil-fuel expansion that is not in their best interest — it’s just that simple. The regulator’s decision to reduce NW Natural’s proposed rate hike is a first step towards protecting customers from the gas company’s dangerous effort to extend fossil fuel dependence for decades to come, at the expense of Oregonians’ health, climate, and utility bills,” said Carra Sahler, staff attorney with Green Energy Institute.

The group of public-interest advocates was represented by Earthjustice and the Green Energy Institute at Lewis & Clark Law School and includes Community Energy Project, Climate Solutions, Columbia Riverkeeper, Coalition of Communities of Color, Oregon Environmental Council, the Sierra Club, and Verde.

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