Northwest Natural Gas Co. said joint system planning and alternatives to natural gas pipelines can benefit consumers and help Oregon achieve its decarbonization goals, but the utility recommended that state regulators take a careful "learning-by-doing approach" to new measures.
In a Dec. 12 filing with the Oregon Public Utility Commission, the natural gas utility, known as NW Natural, addressed stakeholder concerns about its 2025 integrated resource plan (IRP).
The Citizens' Utility Board Of Oregon, along with community and environmental advocates, asked the utility for more details on several aspects of the plan, including its decarbonization resource strategy and its methods for evaluating non-pipeline alternatives (NPAs).
Joint system planning, in which gas and electric utilities coordinate to pursue safety, reliability and decarbonization goals, was a main theme of the utility's filing. NW Natural said it agreed with stakeholder recommendations to start joint system planning with partner utilities in order to optimize cost and reliability across energy systems.
The utilities will need to share data and methodologies such as load forecasts and planned system expansions to make the process successful, NW Natural said.
"The company also encourages the commission not to set overly strict rules before the company and stakeholders understand the practical limits of joint system planning," NW Natural said. "A step-by-step, learning-by-doing approach is more likely to achieve the best and most affordable results."
NW Natural said joint system planning would identify and help resolve problems with electrification that it found in its own analysis. "The analysis indicates that full electrification futures result in higher costs and lower net benefits compared to diversified strategies, highlighting the importance of maintaining a balanced approach," the utility wrote.
Utility argues against targeted electrification
NW Natural said NPAs such as geographically targeted demand-side management pilots are part of its strategy to address capacity constraints and improve system resilience.
But NW Natural asked the PUC to reject electrification proposals that would pull certain energy appliances out of customers' homes. The company said such efforts would have limited impact on gas peak demand and could increase electric peak demand.
The company was also not in favor of hybrid heating systems — installing electric heat pumps with gas furnaces as backup — at least in their current form. Utilities, regulators and customers will have to work out rate design, cost recovery and electric system capacity issues if they want to realize the potential of hybrid heating, NW Natural said.
"Hybrid heating systems, while a promising decarbonization tool, are not useful for distribution system planning because temperature-based switchover controls do not reduce peak-hour gas demand in constrained areas and, therefore, do not qualify as an effective NPA," NW Natural said.
The utility noted that PUC staff had signaled strong support for hybrid heating in an Oct. 24 filing as a way to sharply reduce gas consumption through 2050.
Renewable natural gas is part of NW Natural's plan to meet the state's Climate Protection Program (CPP) gas utility emissions compliance. The company does not see challenges in meeting RNG targets in the near term, but it said regulatory uncertainty about the political and legal durability of the CPP creates ambiguity in long-term planning. The company does not currently favor synthetic methane because of uncertainty around its availability and cost, but it is exploring the option with studies and market assessments.
NW Natural highlights cost control
As affordability becomes an issue on the national political stage, NW Natural said its IRP included strategies to keep overall system costs low for the utility and its customers.
"Cost and equity are also why joint system planning is important," NW Natural said. "When gas and electric utilities plan together, they can share information and make better decisions for all customers. This reduces the risk of shifting costs from one group of customers to another and helps keep energy reliable and affordable for everyone."
