SOCAN – Avista Rate Hike Proposal Comments

Alan R.P. Journet Ph.D.
alan@socan.eco
541-500-2331

Terrie Martin
PO Box 1242
Phoenix, OR 97535.
August 8^th, 2023

Chair Decker and Members of the Oregon Public Utilities Commission:

I write as cofacilitator of Southern Oregon Climate Action Now (SOCAN), an organization of over 2,000 rural Southern Oregonians who are concerned about the climate crisis and urge statewide action to address it. The mission of SOCAN is to promote awareness and understanding of the science of global warming and its climate chaos consequences and stimulate individual and collective action to address it, doing so within the framework of addressing social justiuce. Since rural Oregonians occupy the frontlines in experiencing the impact of the drought, shrinking snowpack, wildfires and extreme weather that the climate crisis imposes, we are strongly committed to statewide action. On this occasion, I write regarding the request by Avista for a rate increase for methane sales, the product it calls ‘natural gas’. I also write as a member of the Consolidated Oregon Indivisible Network’s Climate, Energy and Environment Team. As can be seen above and below, I am also joined by Terrie Martin representing the Oregon Congressional District 2 Indivisible Chapter. The relevance of this is that the territory of Avista in Oregon is largely, if not entirely, within CD2.

Avista (2023a) filed with the Oregon Public Utilities Commission in March this year a request for a substantial rate increase. Regrettably, according to its plan, Avista is seeking to increase its marketing of methane. Although the uses to which this rate increase will be put are not clearly stated in the request, according to the Oregon Citizen’s Utility Board (Shuff 2023) “At $10.9 million, Avista’s requested rate hike seeks to raise customers’ bills for:
Higher profit margins for shareholders
Adjusting for inflation (higher cost of goods/services)
Replacing old pipes to improve system safety
Customer-funded subsidies for expanding the gas system.”

While the CUB acknowledges the value of replacing dangerous pipes, they reasonably express concern about charging customers to expand the system when the utility is required to cut emissions to meet climate regulations. These regulations have been imposed to place our state on a meaningful emissions reduction trajectory commensurate with the global need. On behalf of the above organizations, I write to express opposition to the notion of approving a rate hike request that incorporates increasing the financial benefit to shareholders and expanding the delivery of methane in the region served by Avista. I also suggest that social justice would be better served with at least a two-tiered rate increase incorporating a zero, or much lower increase imposed on the more vulnerable low-income users than is charged to the financially more advantaged customers and businesses.

Since the PUC has long been considering methane gas utility requests, I will start from the assumption that PUC members are fully aware of the evidence regarding the substantial global warming potential of methane and the greenhouse gas emissions that result from the extraction, processing, transmission and combustion of methane. In short, full lifecycle assessments of these emissions, considering the far greater global warming potential imposed by methane compared to carbon dioxide, reveal that, in terms of its global warming impact, fracked and conventionally extracted methane gas can easily be as bad as – if not worse than – coal as an energy source. Indeed, a recent peer-reviewed paper by Gordon et al. (2023) offers the following important conclusions:

• “gas with a 0.2% leakage rate is on par with coal at all analyzed levels of CMM [Coal Mine Methane] leakage.”
• “Based on existing studies, coal has a median life-cycle GHG [emissions rate] of 980 kg CO2e per kWh (with an absolute minimum of 675 and maximum of 1689) and gas has a median life-cycle GHG of 501 CO2e/kWh (with a minimum of 290 and maximum of 988).”
• “…global gas systems that leak over 4.7% of their methane (when considering a 20-year timeframe) or 7.6% (when considering a 100-year timeframe) are on par with life-cycle coal emissions from methane leaking coal mines.”
• “methane leakage from gas production systems [ranges] from <1% to >66%.

Note that while the median value (# 2) for global warming emissions from gas usage is half that of coal, the range for gas emissions overlaps that for coal. This implies that gas is, in some situations, worse than coal. Since leakage rates increase with age (e.g., Weller et al. 2020), it seems inevitable that emissions will increase as infrastructure ages.

The consensus is clear that if we wish to limit warming to 1.5⁰C above pre-industrial levels globally we need to halve greenhouse gas emissions by 2030 and reduce them to net zero by 2050 (IPCC 2018, 2022). This imposes urgency on all of us, the public, state and federal agencies, and elected legislators at all levels, to take whatever action we can to reduce emissions. Although it is accurate to argue that methane gas results in lower emissions per unit of energy generated than coal or oil at the point of combustion (EIA 2022) this does not account for the full life cycle emissions, especially the leakage, identified above in the Gordon et al. (2023) report. In short, we should all be taking whatever steps, personally and professionally, that we can take to reduce emissions. This does not include promoting methane use and thus encouraging the consequent emissions.

For over a decade research demonstrating the fallacy that methane (natura gas) is clean has been growing. Yet, Avista continues to reiterate this false claim. For example we find: “Even though natural gas is a clean fuel, we believe we can make it greener, and we felt it was time to be clear about our path forward.” (Avista 2021a; emphasis underlined by me). Continuing to repeat this false claim even though the contrary research is abundant seriously undermines Avista’s credibility in any claims they make. When the negative health effects of domestic exposure to methane (e.g., Gottlieb & Dyrszka 2017, Seals & Krasner 2020, O’Rourke et al. 2022) are added to the equation, it becomes more obvious that Avista’s effort to expand its  marketing of methane should not be supported.

It is also noteworthy that representatives of the gas sector were represented on the Rulemaking Advisory Committee for the Oregon Climate Protection Program. Throughout that endeavor, their representatives claimed to be concerned about the climate crisis and committed to reducing greenhouse gas emissions in that sector. However, since the CPP was approved, members of the gas sector have taken every opportunity to undermine the plan they were involved in developing. We suggest that it is inappropriate to reward that sector with approval of a rate hike designed to augment the profits of shareholders and expand the emissions of methane and carbon dioxide.

Despite the above concerns, and ongoing behavior that suggests the gas division of Avista does not acknowledge the following corporate claim, Avista apparently recognizes that it is an energy company, not just a gas utility (Avista 2023b). Also, to its credit, Avista here claims a commitment to reducing greenhouse gas emissions: “Avista has always been on the forefront of clean energy and innovation. Founded on clean, renewable hydro power on the banks of the Spokane River, Avista has maintained an electric generation portfolio with more than half the generation from renewable resources, while continuously making investments in new renewable energy, advancing the efficient use of electricity and natural gas, and driving technology innovation that has enabled and will continue to become the platform and gateway to a clean energy future.”

However, this apparent commitment to reducing greenhouse gas emissions is somewhat optimistic. The Avista plan to reduce emissions (2021b, p. 5) comprises a commitment to:

“• Diversify and transition from conventional, fossil fuel natural gas to renewable natural gas (RNG), hydrogen, and other renewable biofuels.

“• Reduce consumption via conservation, energy efficiency, and new technologies.

“• Purchase carbon offsets as necessary.”

What the plan fails to note is that all these approaches require that the basic business model of providing and expanding the supply of methane to customers is retained.

I will evaluate these three options:

The first option is flawed. The so-called Renewable Natural Gas option is constrained by an incontrovertible problem: there is only a limited amount of RNG available. Cyrs et al. (2020) for example, reported that as of that date, the organic waste stream was only capable of providing 7% of contemporary national methane usage. Additionally, the availability of RNG in Oregon is severely limited. (ODOE 2018). This assessment concluded that anaerobic digestion could only provide 4.6% of the state’s annual methane usage, while even with employment of energy intensive thermal gasification technology, the total could only reach 17.5% of Oregon’s usage. In addition, this option ignores completely the serious question about how the full life cycle analysis of RNG assesses total emissions from the production and transmission of this fuel; once the RNG is in the pipeline, it will leak, in the same way that shale-fracked methane leaks. A final concern is worth noting. Since there is a limited amount of RNG, and some industrial processes will be very difficult to electrify, it seems much more reasonable to confine RNG usage to processes that really need a combustible fossil fuel energy source. Pumping this valuable RNG commodity into pipelines for general use represents a waste of that resource.

The Hydrogen option might look promising so long as the Hydrogen employed is extracted from water using electrolysis through a process driven only by renewable energy sources. Of course, there is a real question as to whether renewable energy should be used to produce Hydrogen and maintain the methane industry. More reasonable might be a plan to commit renewably generated energy directly to end uses. However, if alternative processes are employed for producing Hydrogen, the technology confronts another problem. Howarth and Jacobson (2021), for example, report that using Hydrogen generated from methane (so-called blue hydrogen) is actually more greenhouse gas emissions intensive than combusting the methane itself. Furthermore, even if the renewable energy were available to produce green Hydrogen, as Erdener et al. (2023) point out “existing gas-fired power plants or industrial processes, may not be designed to tolerate hydrogen blending beyond a given limit; for many existing gas-fired power plants, this limit is 5% volume.” On a slightly more optimistic note, Esposito (2022) reports a limit of 20%, but notes that even if this Hydrogen is renewably generated, the greenhouse gas emissions reduction amounts to only 6 – 7%. Esposito also adds that this would raise the price of methane by 2 – 4 times. Finally, while biofuel combustion is often designated as net zero in terms of greenhouse gas emissions, this is patently untrue since full lifecycle analysis must assess the emissions from producing, processing and delivering that fuel. As Jeswani et al. (2020) report, whether biofuels are genuinely an improvement over fossil fuels requires a close analysis of the production sequence of each biofuel process. Whichever approach to reducing emissions is taken under this item, emissions reductions are, at best minimal and Avista remains committed to a continuation and expansion of promoting fracked gas to supply users.

The second option involves increasing energy conservation and energy use efficiency. While this may look promising, a much more reasonable approach than grasping at straws to continue methane gas delivery would be to promote electrification of everything and encourage weaning ourselves completely from methane.

Meanwhile, clearly, the third option of investing in offsets involves no reduction in emissions whatsoever.

Rather than maintaining the false claim that “…natural gas is a clean fuel” the Avista gas division would be more persuasive if it were to accept the corporate claim that they are an energy company not a methane company. Avista would be more convincing if they were to seek alternatives to maintaining their methane business model.

Matthewson (2023) offers a valuable concern: “…while natural gas is an improvement over coal and other fossils fuels, continued reliance on it—not to mention any further development — at the expense of carbon-free alternatives will impede our ability to meet the Paris Agreement climate goals and avoid the worst impacts of global warming.” Meanwhile, Kemfert et al. (2022) offer the valuable insight that: “We highlight that natural gas is a fossil fuel with a significantly underestimated climate impact that hinders decarbonization through carbon lock-in and stranded assets.”

In short, the below organizations oppose approval of the Avista request for a fee increase, especially to the extent that the increased fees would provide increased benefits to shareholders and would increase the extraction and distribution of methane. In addition, while some have argued that raising the cost of methane actually serves the goal of reducing gas usage, SOCAN is committed to the notion that any efforts to address the climate crisis must acknowledge our collective history of social injustice. In this vein, we recommend that Avista develop a two-tiered pricing system such that low-income Oregonians are protected from a steep rate increase while wealthier Oregonians and businesses experience a compensatory rate increase.

Respectfully Submitted

Alan Journet Ph.D.
Cofacilitator
Southern Oregon Climate Action Now
Member,
Consolidated Oregon Indivisible Network
Climate, Energy and Environment Team

Terrie Martin
Chair of Steering Committee
Oregon Congressional District 2 Indivisible