Negotiations Between NW Natural & City of Eugene Remain Ongoing
Negotiations over whether the City of Eugene will renew a franchise, or right-of-way agreement with NW Natural gas remain ongoing after Monday, Feb. 8, council meeting. Neither the city or the company want to budge on carbon reduction terms that align with Eugene’s climate goals.
NW Natural is seeking a separate "voluntary and collaborative" agreement on carbon reduction instead of one agreement proposed by the city. The natural gas company has also taken issue with the collection of a Carbon Reduction Fee (CRF) and how those fees should be used.
While NW Natural has agreed to a CRF, the company would prefer to collect fees on behalf of customers and use those fees for mutually agreed upon administrative costs not electrification.
The city, however, wants the fee imposed on the company itself, not customers. The city also wanted 80 percent of the fees collected to be used for energy investments in Eugene for low-income households. Meanwhile, NW Natural wants that 80 percent investment to go specifically toward their customers in the City of Eugene who are low-income.
The city has previously extended the current agreement for six-months three times in hopes of continuing discussions and eventually reaching an agreement with NW Natural. But as of now they're at an impasse.
"It seems clear that dragging the unsuccessful negotiation on is not benefitting anyone," said Councilor Jennifer Yeh, "there are major points that we are nowhere near as agreement on and are completely unacceptable going forward."
Yeh said the city has made concessions and decided to not push forward on some efforts, only to end up with a fee on customers that will support energy efficiency for NW Natural customers alone.
"While we're getting something, it does not feel like we're getting anything substantial that is getting us toward our Climate Recovery goals, and so at this point I would not vote to extend the franchise agreement," Yeh said.
The city's Climate Recovery Ordinance, last updated in 2016, calls for the reduction of community fossil fuel use by 50 percent of 2010 by 2030.
Without a franchise agreement, city staff told councilors service would most likely continue. But NW Natural would lose blanket authorization to conduct maintenance and expand lines on the right-of-way, and would instead need to go through an individual permiting process for each project.
Councilor Claire Syrett also chimed in with her frustration. She said when the city had started negotiations, the city offered an agreement that would have allowed both the city and NW Natural to transition together toward the phasing out of fossil fuels.
“But, NW Natural seems to be working the tobacco industry playbook instead, [NW Natural] seems determined to push back on these efforts instead of facing the future with grace and integrity,” Syrett said.
Other councilors were concerned not renewing the agreement would lead to an increase in utility prices across the board and might harm development projects.
"I'm always going to be concerned about our workers out there, our labor units, our local businesses, and how do we keep them surviving especially as we come out of the economic impact from the pandemic," said councilor Randy Groves. He added the city can put a fee on NW Natural but the cost will be passed onto the consumer.
"We don't really have a plan B," said councilor Alan Zelenka, "it's very likely that an adversarial relationship with NW Natural will result in resistance, lawsuits, more costs, more expense, further delays and very little greenhouse gas emissions over the next near term."
Zelenka said the city would get closer to reaching their CRO goals by reaching an agreement. Though he said he would like the franchise agreement to be linked with the Carbon Reduction Agreement and have NW Natural have less control over the management of collected fees.
City Manager Sarah Medary told councilors the meeting was intended to inform them of important dates, the expiration of the current agreement on May 11, and the last day, Feb. 19, to submit documents to renew the agreement before May 11.
“What tonight’s session was really intended to do was to let you know that unless we have everything decided and written up and posted by next Friday, there’s no way that there won’t be some sort of lapse at the end of May,” Medary said. She added staff is still working toward reaching an agreement, but that's unlikely to happen before next week.
At a public forum the same night supporters, and opponents of NW Natural spoke out, leaving councilors wanting to hear more community input on the issue. Another meeting on this topic is yet to be determined.
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