NW Natural adds more renewable natural gas as debate over green fuel heats up

NW Natural (NYSE NWN) has brought online a second renewable gas project in Nebraska, amid debates over the utility's embrace for the green fuel.

The Portland-based NW Natural hailed the RNG facility in a Tyson Foods plant for being another step towards decarbonization.

David Anderson, NW Natural's president and CEO said that each project such as this one contributes to meaningful carbon reductions for our customers, and helps us achieve our shared climate goals. We're actively pursuing other opportunities to increase our use over time of renewable energy.

The 2019 state law supports NW Natural in its pursuit of renewable gas. It allows the utility to include the costs associated with the fuel produced from organic sources into their rates. The utility invests in RNG production in some cases and buys renewable thermal certificates that are associated with RNG flowing on the gas grid in other cases. NW Natural announced that it had invested $12 million in the Dakota City project, which recently came online.

Some stakeholders are not happy with the plan of the utility to increase its RNG production.

Staff at the Public Utility Commission argued in a document filed early last month that NW Natural could save up to $150 million by buying compliance credits instead of RNG, and complying with state requirements for greenhouse gas emission reductions.

This issue comes up in the PUC's review of NW Natural's integrated resource plan. The IRP is being used by gas opponents to attempt to decrease the use of natural gas in buildings and replace it with electricity. Residential ratepayer advocacy group Oregon CUB supports the staff position regarding RNG.

In comments submitted to the PUC last week, NW Natural defended RNG in a way that was superior to what is known as Community Climate Investment Credits. The company stated that acquiring RNG "results directly and immediately in NW Natural's customer's emissions reductions", while credits bought from the state would likely allow covered parties to claim emission savings before the actual reductions take place.

NW Natural said that the savings highlighted by PUC staff equate to approximately $1 per month for the average residential customer between 2024 and 2030.

The company stated that 'this is a reasonable price to pay for a portfolio of resources which reduces emissions from NW Natural customers -- as well Oregon -- faster and with less risks than the staff-recommended strategy'.