The Future of Natural Gas Utilities
by Pat DeLaquil, PCP
Under Governor Brown’s Executive Order 20-04, the Department of Environmental Quality (DEQ) is engaged in rulemaking on a Climate Protection Program to reduce GHG emission reductions from three main sources: Fuel suppliers; Natural gas suppliers; and Stationary industries. Results from the energy system modeling work supporting the rulemaking show natural gas consumption declining in all policy scenarios by 59 to 63% compared to more than 9% growth in the reference scenario. Furthermore, the policy scenarios show a greater contribution of renewable natural gas (RNG) contributing up to 57% of total gas use in 2050.
These modeling results show that electrification of buildings is one of the most cost-effective ways to reduce emissions, even before the benefits of the recently passed 100% clean electricity law are considered. This modeling result underscores the importance of the new fact-finding docket opened by the Oregon Public Utilities Commission on the future of natural gas utilities. The goals of the fact-finding are “to 1) consider potential customer impacts that may result from limiting GHG emissions of regulated natural gas utilities and 2) identify the regulatory tools available to the PUC to protect consumers during the upcoming transition.” However, the potential impacts of GHG reductions on the natural gas industry will not be limited to DEQ’s Climate Protection Plan. Many other market and societal factors will also motivate most consumers to transition away from methane-based fuels in any form.
This docket will help set the stage for how Oregon can wind down its residential and commercial sector natural gas use while protecting remaining customers and promoting the public utilities to transition to suppliers of clean fuels for industrial consumers with applications that are not easily electrified, and building the green hydrogen infrastructure that will be needed to provide the seasonal storage capacity that our natural gas system currently provides. For more information click here. Interested members of the public can participate in this new docket by emailing PUC.HEARINGS@puc.oregon.gov. The docket number is UM 2178.