Oregon natural gas providers raising residential rates up as much as 25% this fall
The city of Eugene is the first city in Oregon to ban natural gas in new residential developments. (Ervins Strauhmanis/Flickr)
Oregonians relying on natural gas for home heating and cooking will be paying significantly more this winter.
On Nov. 1, NW Natural, the state’s largest natural gas utility, will raise residential rates about 14%, and then another 11% in March, affecting about 600,000 people. Avista will increase gas rates for its 105,000 residential customers by about 18% in November, and Cascade Natural’s 75,000 residential customers will see about a 25% rise next month, according to analysis from the Citizens’ Utility Board and the Public Utilities Commission. The commission is a governor-appointed group of three who regulate the rates charged by private electric and natural gas utilities, and the board is a watchdog group made up of 15 members appointed from each of Oregon’s congressional districts.
The rate increases are due in large part to global supply and demand issues exacerbated by extreme weather events and Russia’s war on Ukraine, according to the board.
But some increases are also the result of the companies hoping to spend more on capital and business investments.
NW Natural’s residential rates rose 12% last fall, and this year the company wanted to raise rates nearly 10% to pay for investments and business costs. But environmental groups and the Citizen’s Utilities Board petitioned against NW Natural using customer dollars to pay bonuses to top executives, for political lobbying and to subsidize the cost of expanding the grid and adding new gas hookups.
The commission ruled in favor of the petitioners on some of the issues, slicing about 1.5% from NW Natural’s rate request. It ordered NW Natural to cut $1 million from customer revenue dedicated to advertising and admonished it for using customer dollars to pay for communications that were misleading or promotional. The commission said an activity booklet NW Natural produced for kids to provide safety information about natural gas was of particular concern.
“The vast majority of the information is unrelated to safety with some pages verging on outright promotion,” the commission wrote in its order.
The commission also ordered NW Natural to cut spending with customer dollars on communications with politicians, to the tune of $356,000. The commission found that some of NW Natural’s communications with politicians verged on lobbying, which is not allowed to be paid for with customer dollars, according to state and federal laws.
The commission ruled that NW Natural will also need to gradually reduce the amount customers pay to subsidize the addition of new gas hookups. The commission ruled this was not a fair use of customer money because adding new gas hookups could be out of line with the company’s need to reduce emissions under the state’s Climate Protection Program. Natural gas providers in the state must reduce emissions from natural gas 26% by 2050 under that plan.
According to Bob Jenks, executive director of the citizens’ board, limiting the customer subsidy for new gas hookups each year for the next three years could save $28 million for NW Natural customers.
“The commission is recognizing that the gas industry is changing because of climate change and there’s a lot of uncertainty. It’s recognizing the risks to customers,” he said “and the commission is saying let’s reduce that.”
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