Oregon Regulators Help Curb Spiking Energy Bills by Phasing Out Gas Subsidies and Removing $13.7 Million in Overcharges

October 25, 2024

Oregon Regulators Help Curb Spiking Energy Bills by Phasing Out Gas Subsidies and Removing $13.7 Million in Overcharges

Victory

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The Oregon Public Utility Commission requires NW Natural to stop using customer funds to subsidize gas pipeline expansion, and removes costs for the company's lobbying activities from rates

Contacts

Elizabeth Manning, Earthjustice, [email protected], 907-277-2555

Charlotte Shuff, Oregon Citizens' Utility Board (CUB), [email protected], 503-719-8744

Portland, OR -

In a major victory for Oregon's energy customers and community groups advocating for a livable future powered by affordable clean energy over fossil fuels, Oregon regulators are requiring the largest gas utility in the state - NW Natural - to phase out subsidies for new gas hook-ups.

Eliminating these subsidies is a huge win that will reduce energy bills and protect our climate by ending uneconomic investments in fossil fuel infrastructure. The Commission ruled to phase out gas subsidies by 2027 that would have financed the cost of new methane gas lines and connections by charging all utility customers for these costs, even though it only benefits new homeowners and builders. These subsidies have historically spurred builders to connect new homes to gas, locking future homeowners into dependence on fossil fuels even when doing so will result in high energy costs to these customers.

"We are proud to support our communities in having a voice at the decision-making table," said Anahi Segovia Rodriguez from Verde. "With this ruling, communities are finally taking their future into their own hands, ensuring access to affordable clean energy and a healthier environment for all."

The decision by the Commissionto phase out gas subsidies makes Oregon one of the few states in the nation, in addition to California, Washington, Colorado, and Connecticut, that are removing these subsidies from customer rates.

In another part of today's ruling, the Commission also prohibited the utility from charging a fixed rate that tripled the usual fee for new gas customers, which Commission staff described as a "deceptive" measure that unfairly shifted costs for subsidized gas system growth on to new customers. The Commission also ruled that NW Natural must remove $13.7 million from rates because it overcharged ratepayers for new infrastructure costs. Removing these costs will further lower customer's energy bills. And, the Commission required NW Natural to stop charging its customers for lobbying expenses to fight state climate policies.

Finally, the Commission approved the multi-party settlement reached in August that lowered the revenue requirement to $95 million from the Company's original request of more than $150 million. This settlement provides deeper discounts for income-qualified customers enrolled in NW Natural's bill discount program and creates a debt forgiveness program for the lowest-income customers.

Earthjustice and the Green Energy Institute at Lewis & Clark Law School represented the Coalition of Communities of Color, Climate Solutions, Verde, Columbia Riverkeeper, Oregon Environmental Council, Community Energy Project, and Sierra Club in the rate case before the Commission. The Oregon Citizens' Utility Board represented residential customers as a whole.

Following are additional statements from CUB, Earthjustice, and the community groups represented by Earthjustice and the Green Energy Institute:

"Regulators have made it clear today - it's time we stopped subsidizing the expansion of the fossil fuel network," said Bob Jenks, Oregon Citizens' Utility Board (CUB) Executive Director. "Getting rid of these subsidies is a big win for customers and will have lasting impacts on our bills. It's good for people. It's good for the planet. And it's the right thing to do."

"The Commission issued a groundbreaking order today to phase out gas subsidies," said Earthjustice attorney Jaimini Parekh. "This will discourage investments in fossil fuel infrastructure that no longer make economic sense and it will save energy customers millions in the first year and more later. This dated utility practice kept neighborhoods hooked on fossil fuels - it's a very good thing Oregon is closing this chapter. We also applaud the Commission for stopping NW Natural from charging customers for dark money expenditures to fight climate policy. That practice had no business continuing."

"Community Energy Project advocates for a just and equitable transition to clean energy and less dependence on fossil fuels," said Siraat Younas, Community Energy Project's Climate Justice Associate. "This ruling and the previous settlement safeguard low-income and frontline communities from unjustified rate hikes and growing energy unaffordability."

"Today, the Commission joined regulators across the country in recognizing that subsidizing the expansion of the fossil gas system directly undermines state climate goals," said Dylan Plummer, Senior Campaign Strategist for Sierra Club's Building Electrification Campaign."The Commission stood up for Oregon customers by rejecting Northwest Natural's grossly inflated, proposed 'line extension allowance' subsidy and significant fixed charge proposal that together would have enticed Oregonians to invest in fossil gas and then saddled them with high costs down the line. By sending Northwest Natural back to the drawing board, the Commission reaffirmed that Oregonians deserve real solutions to the climate crisis, including expanding electrification projects that will allow us to eliminate our reliance on dangerous and polluting gas infrastructure."

NW Natural was one of the fossil fuel companies protested against during a Portland Youth Climate Strike march in Portland, Oregon on May 20, 2022. (Nick Cunningham / DeSmog.com)

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