All customers of Oregon’s largest natural gas utility — and low-income customers in particular — will experience lower increases on future utility bills thanks to a victorious partial settlement in a contested rate case between NW Natural and climate and community-based environmental justice organizations.

In its rate hike request before Oregon’s Public Utility Commission (OPUC), NW Natural initially sought a nearly 17% rate increase to raise its revenue by more than $150 million. Notably, none of the funding was slated for complying with Oregon’s climate policies.

NW Natural’s residential customers already pay on average 50% more than they did in 2020. Keeping costs low for customers, especially low-income families, and ensuring that NW Natural’s spending is aligned with Oregon’s climate policies were the primary goals of community groups who intervened in the rate case.

The settlement, signed last month, reduces the utility’s overall revenue increase to $95 million, which will keep energy bill increases lower for all NW Natural Oregon customers. Overall customer rates are now expected to rise by just 7%, instead of the anticipated increase of nearly 17%. The reduction is due to the settlement plus a “purchased gas adjustment,” which lowers rate increases when gas costs are lower than anticipated.

In addition to achieving lower rate increases for all customers, the settlement also achieved deeper discounts for low-income customers enrolled in NW Natural’s bill discount program, which lowers energy bills for those who qualify based on household size and income. Under the settlement, the bill discount program’s savings will now increase to 30% for customers (from the existing 20%) with eligibility incomes at the higher end, to 50% (from the existing 25%) for middle tier eligible customers, and to 85% (from the existing 40%) for the lowest-income customers. These large discounts will directly serve the lowest-income families most in need.

Importantly, in the settlement, despite NW Natural’s initial resistance, the utility agreed to a debt forgiveness program, part of an “Arrearage Management Program,” that will help low-income customers who struggle with recurring bill debt that leads to spiraling energy costs. NW Natural has committed to involving community-based organizations in a collaborative process to develop the program, which will roll out in 2025.

In another important win, conceded by the gas utility outside of the settlement, NW Natural will no longer fight for $720,900 in legal fees challenged by advocates. Advocates introduced evidence showing that NW Natural charged ratepayers for legal activity to undermine a range of climate policies in Oregon and Washington, including progressive new state building codes in Washington, and the Climate Protection Program.  While the company contested the evidence, it decided to forgo recovering these legal fees from customers.

Other parts of the rate case were not settled and will proceed to litigation. The groups are seeking to prevent NW Natural from discriminating against some new residential customers by charging them higher rates, and for subsidies that grow gas infrastructure. The groups are also asking OPUC to prevent NW Natural from charging customers for lobbying expenses aimed at blocking state and local climate policies and are seeking recovery of $16 million in excess charges for gas line extensions.  Despite a 2022 OPUC ruling that prohibited charging customers for pro-fossil fuel lobbying, NW Natural has continued to engage in this activity.

The settlement will still be subject to approval by the Oregon Public Utility Commission, which is expected in the next few months.

The organizations involved in the partial settlement are the Coalition of Communities of Color, Climate Solutions, Verde, Columbia Riverkeeper, Oregon Environmental Council, Community Energy Project, and Sierra Club; the groups are represented by Earthjustice and the Green Energy Institute at Lewis & Clark Law School. Other parties to the settlement include NW Natural, the Public Utility Commission of Oregon, Oregon Citizens’ Utility Board and the Alliance of Western Energy Consumers.

Following are statements from the organizations and the attorneys representing them:

“This settlement prevents unjustified rate hikes and will help ease the growing burden of energy bills faced by struggling families and low-income communities of color,” said Nikita Daryanani, Coalition of Communities of Color’s Climate & Energy Policy Manager. “Our organizations will continue to advocate for sustainable, equitable energy solutions that prioritize the wellbeing of impacted communities and the environment, while keeping energy rates affordable.”

“Safeguarding utility affordability is crucial for the well-being of our community,” said Anahí Segovia Rodriguez, Verde’s Energy Justice Coordinator. “This settlement protects frontline communities and helps us advance policies that will protect people and the planet.”

“Community Energy Project envisions a just and sustainable clean energy future,” said Siraat Younas, Community Energy Project’s Climate Justice Associate. “We’re advocating for an equitable transition to a more diverse energy supply with more renewable energy and less dependence on fossil fuels. It’s what we need to move toward a cleaner, healthier and more just world.”

“This settlement is a win for all Oregonians — and for the environment and Oregon’s climate goals,” said Rose Monahan, Sierra Club Staff Attorneys. “We’re also happy that NW Natural has opted not to pass on to its customers the costs of its harmful and misguided litigation against building electrification and climate policies.”