Tyson Foods Inc.'s decision to close a major beef processing plant in Nebraska has imperiled a Northwest Natural Holding Co. renewable natural gas plant that relies on the facility's byproducts for feedstock.
The Portland, Oregon-based gas utility, which does business as NW Natural, filed an application Dec. 29, 2025, with the Oregon Public Utility Commission seeking to defer costs and revenues associated with the Lexington Renewable Natural Gas Project until December 2026.
Tyson announced in November 2025 that the plant will close in late January. RNG production at the facility will cease unless the plant is reopened by Tyson or another operator, NW Natural said.
The application said NW Natural "could not have reasonably foreseen Tyson ending operations" when it developed the Lexington RNG project, which opened in January 2022. NW Natural operates a second facility with Tyson in Dakota City, Nebraska.
The Citizens' Utility Board Of Oregon said customers should not have to pay for RNG they are not receiving.
"There is no reason to bail out" the project, the nonprofit told Platts, part of S&P Global Energy. "In addition, in order to recover the costs of retired property, NW Natural has to demonstrate that the retirement was in the public interest, which they have failed to do."
Facility issues
The Lexington beef facility is one of Tyson's largest plants and was responsible for approximately 5% of total beef processing in the US, according to NW Natural's application.
NW Natural said US pastures currently have the lowest number of cattle since the 1950s, reducing the need for beef processing facilities. The fluctuations of food tariffs enacted and rescinded — specifically a 40% tariff on food products from Brazil, a major source of US beef — have also created uncertainty in the market.
Deferring the costs and revenues of the Lexington RNG project would "reduce the frequency of rate changes and the fluctuation of rate levels by permitting the company to seek cost recovery in a subsequent proceeding, such as a [purchased gas adjustment] or general rate case, where its rate would already be changing, as opposed to a standalone tariff filing," NW Natural said in its filing.
NW Natural said Jan. 7 that it is still evaluating its options for the facility, including undergoing an assessment of the asset value. If the company decides to sell the facility, the revenues would decrease the amount the utility seeks to recover from customers.
"While we're disappointed in the recent developments for the Lexington project, NW Natural's RNG efforts are on track for 2026 with projections to acquire more RNG for our Oregon customers than ever before," NW Natural spokesperson Stefanie Week said in an email. "RNG procurement activities at NW Natural will continue but with a cautious approach as the markets and regulatory environments are still developing."
For 2026, NW Natural expects RNG to account for about 4% of its gas supplies for Oregon customers.
NW Natural's history with RNG
A 2019 law known as Senate Bill 98 allowed and encouraged Oregon natural gas utilities to procure RNG to support the state's transition to a low-carbon economy, but NW Natural has run into roadblocks along the way.
Oregon utility regulatory staff told NW Natural in April 2023 to prioritize investments in projects that phase out fossil fuel use rather than purchases of RNG. Staff said energy transition projects are a more cost-effective solution to achieve legally mandated greenhouse gas emissions reductions. NW Natural will not need to rely on RNG to achieve emissions compliance until 2026, according to the PUC staff's modeling.
The gas utility has favored RNG procurement and hydrogen blending as opposed to building electrification to offset emissions from combusting natural gas.
State regulators rejected NW Natural's plan to prioritize RNG investments in August 2023 and denied a long-term energy supply plan that favored low-carbon fuels, which the commission said were not demonstrated as the last-cost, lowest-risk compliance pathway.
NW Natural had proposed procuring the maximum amount of RNG allowed under S.B. 98, aiming to have the RNG purchases count toward the company's compliance with Oregon's Climate Protection Plan emissions cap. But the PUC said at the time that NW Natural had failed to show that the RNG purchase levels were the best compliance option.
In NW Natural's 2025 integrated resource plan, staff comments favored hybrid heating — installing electric heat pumps with gas furnaces as backup — to sharply reduce gas consumption through 2050 and comply with the Climate Protection Plan.
