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Eugene officials weigh possible changes to gas agreement

December 2, 2018

EUGENE, Ore. (AP) — Officials are considering whether they can force a natural gas company to reduce emissions to help meet carbon reduction goals.

A 20-year agreement between the city of Eugene and the private gas company NW Natural is up for renewal next year. It’s a so-called franchise agreement, which governs a company’s use of public rights of way to operate and maintain its service lines. Companies typically pay a percentage of gross revenue to the city as compensation.

One idea being discussed would assess a higher or variable franchise fee, a charge generally passed to customers, the Register-Guard reporte d. The city could use the fee to encourage the company to reduce its carbon footprint or spend the additional revenue to help address its carbon-reduction goals. Another idea would stop NW Natural from expanding in Eugene unless it describes plans to “decarbonize” its gas.

At a recent meeting, City Councilor Alan Zelenka said the options are “pushing the envelope in terms of what we’d be able to do within a franchise fee agreement.”

Kimberly Heiting, senior vice president of operations and chief marketing officer for NW Natural, said the company is committed to reducing carbon emissions. But she said natural gas must be part of any strategy to move the nation to a clean-energy future, she said.

“The goal should be emissions reductions, not necessarily 100 percent renewable energy, because if you force that, you are potentially leaving more affordable reductions on the table,” she said.

For example, she said there’s a better return converting the nation’s passenger vehicles to all-electric rather than converting the electricity and natural gas sectors to 100 percent renewable energy sources.

While natural gas burns cleaner than coal, it still releases carbon dioxide and methane, which trap heat in the atmosphere.

Supporters of the city’s climate efforts say Eugene must gradually phase out natural gas to meet those goals.

It’s unclear if the city would be allowed to regulate natural gas.

The Oregon Public Utility Commission regulates natural gas companies and has broad authority, City Attorney Kathryn Brotherton recently told city councilors. It could weigh in if the city conditioned a renewed franchise agreement to prohibit expansion of natural gas service unless NW Natural met certain terms.

In that case, the city would notify the commission of a proposed regulation and the commission would review it. If the commission objected, the regulation couldn’t take effect unless voters approved it, she said.

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Information from: The Register-Guard, http://www.registerguard.com

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