HomeMy WebLinkAboutPotential Regulation of Natural Gas PresentationRegulation
of
Natural
Gas
Eugene City Council Work Session January 30, 2019
Background
Work Session Poll
•Fall 2018
•Potential ways to regulate
natural gas
Sustainability
Commission
•June Committee Memo
•Recommendations to
Council
NW Natural Gas
Franchise Agreement
•November Work Session
•Skov/McRae
recommendations
Work Session Research
•City staff analyzed ORS 221.420 and sought input from the PUC
regarding this column and are waiting to hear back.
•City staff’s analysis regarding whether the particular proposal/idea
could be a term of the franchise agreement, if Council so desired.
•City contractor Good Company provided estimates were performed as
a unique look at suggested approaches and results should be
considered as sense-of-scale estimates to support discussion.
Future Meetings
•February 11-Joint Elected Official Meeting with EWEB Board
•After Council Break-Council meeting to give specific instructions on
the franchise agreement.
•Spring-Work session with NW Natural Gas on their Low Carbon
Pathway.
•Spring-CAP2.0 work session(s) to provide direction on plan adoption
Response Chart
Idea/Proposal PUC
Notice1
Permissible
Franchise
Term or
Limited to
Regulation2
Impact on achieving CRO
Goals3
(310,000 MtCO2e by 2030)
Figures are annual reductions
at 2030.
Triple Bottom Line
1 Limit or prohibit new
natural gas infrastructure.
No Franchise
50% reduced investment=
20,000 MtCO2e
100% reduced investment=
40,000 MtCO2e
Moderate impact on new
construction. Depends on if
this is applied to new
accounts or to extension of
new pipeline.
2
Require NWNG to
incentivize customers’
reduced use of natural gas
or customers’ purchase of
emission offsets provided
by NWNG’s Smart Energy
Program.
Yes Franchise 50% offset=160,000 MtCO2e
100% offset=310,000 MtCO2e
Effect will increase cost of
product. Generally, utility
rate increases
disproportionately impact
low income populations.
Response Chart
3
Regulate the purchase and
installation of natural gas
fueled appliances. No Regulation 130,000 MtCO2e
Moderate to low impact on
low income populations,
until time of equipment
replacement.
4
Prohibit financial
incentives for installing
natural gas service. No Franchise Not modeled due to lack of
data and complexity.
Low impact on low income
populations.
5
Prohibit financial
incentives for purchasing
natural gas appliances. No Regulation Not modeled due to lack of
data and complexity.
Low impact on low income
populations.
Response Chart
6
Prohibit installation of
natural gas service for new
residential, commercial
and/or industrial buildings.
Yes Franchise
50% reduction in new
accounts= 20,000 MtCO2e
100% reduction in new
accounts=
40,000 MtCO2e
Without increased incentives
on electricity side, it will
increase cost of construction.
Also, cost of energy (without
a price on carbon) will be
greater than current rates.
7
Require NWNG to fuel
switch to biogas and
renewable hydrogen.
Yes Franchise Assume 25% biomethane by
2030 = 80,000 MtCO2e
Low to Moderate impact on
low income populations.
Increase in customer rates to
accommodate the new
infrastructure and potential
increase in energy source
costs
8
Increase franchise fee and
dedicate franchise fee
funds to implementing a
program that provides
incentives to switch from
natural gas to renewable.
No Franchise
Not modeled due to lack of
data on incentive program and
anticipated market adoption.
Low to Moderate impact to
low income populations.
Likely the increased fee will
be passed on 100% to
consumers, impact is based
on size of fee increase.
Response Chart
9
Reduce the term of the
franchise from 20 years to,
at most, 10 years. No Franchise No ghg impact. No discernable impact.
10
[Skov/McRae] Create a
hybrid franchise fee
structure: 1) fixed portion;
and 2) variable fee based
on carbon footprint of the
natural gas delivered to the
community, i.e., lower
carbon gas = lower
variable.
No Franchise
Assumed reduced carbon
footprint is from biomethane.
Assume 25% biomethane by
2030 = 80,000 MtCO2e
Low to Moderate impact to
low income populations.
Likely the increased fee will
be passed on 100% to
consumers, impact would be
from increase in customer
rates to accommodate the
new infrastructure and
potential increase in energy
source costs
11
[Skov/McRae] Prohibit the
expansion of natural gas
services unless NWNG can
demonstrate plan to
decarbonize its product.
No Franchise Not Modeled, but similar to #1
Moderate impact on new
construction. Depends on if
this is applied to new
accounts or to extension of
new pipeline.
Questions?