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Memorandum <br />Date: November 14, 2018 <br />To: Eugene City Council <br />From: Eugene Sustainability Commission <br />Subject: Sustainability Commission Northwest Natural Franchise Agreement Recommendations <br />This memo outlines what the Sustainability Commission hopes to see in the Northwest Natural Franchise <br />Agreement. The Commission is providing this memo in response to advice from the Mayor and City Manager <br />to provide specific recommendations. <br />NW Natural Franchise Agreement <br />The primary requirement in the renegotiated franchise agreement should be that NW Natural meet the goals <br />of the City of Eugene’s Climate Recovery Ordinance. These goals include reducing fossil fuel use 50% from 2010 <br />levels by 2030 and reducing emissions enough to restore CO2 to 350 ppm in the atmosphere by 2100, <br />estimated in 2016 to require a 7.6% annual reduction beginning that year. <br />Specific policy recommendations to be included in the franchise agreement include the following: <br />1.Customers will be incentivized to reduce natural gas use and purchase greenhouse gas emission offsets <br />provided by NW Natural’s Smart Energy Program. (Note: this is somewhat inconsistent with the preference <br />to reduce fossil fuel use) <br />2.Prohibition of NW Natural offering financial incentives for residences and business to switch to natural gas. <br />3.Limit new natural gas infrastructure expansion (this does not include maintenance of existing <br />infrastructure). <br />4.NW Natural will reduce the carbon intensity of natural gas they supply by including biofuels, renewably <br />sourced hydrogen, and other non-fossil fuels. <br />5.Increase the franchise fee and dedicate franchise fee funds to implementing a program that provides <br />incentives to switch from natural gas to renewable energy (electricity). This program would be similar in <br />concept to the EnergyTrust of Oregon. The Eugene Electric and Water Board should be approached about <br />administering this program through an intergovernmental agreement. <br />6.The term of the franchise agreement should be reduced from 20 years to, at most, 10 years. If the <br />franchise agreement includes CRO and related provisions, a 5 or 10-year period would allow for more <br />timely check-ins and changes. <br />Options that result in direct reductions in fossil fuel usage are preferred over offset purchases. <br />In regulating natural gas, accountability and progress are critical. The agreement should include third-party <br />verification of fossil fuel reductions and agreed to progress on meeting established goals. Failure to meet these <br />goals should be subject to penalties (to be determined). <br />* ­´ ±¸ ΒΏǾ ΑΏΐΘǾ 7®±ª 3¤²²¨®­ ȟ )³¤¬ ΐ <br /> <br />