Aiming to further cut greenhouse gas emissions in its operating areas, Northwest Natural Holding Co. touted the benefits of renewable natural gas while applauding the recent enactment of legislation in Oregon that allows utilities to acquire the resource on behalf of their customers.
"Besides reducing the carbon intensity of what's going through our pipes, [renewable natural gas, or RNG] is a great way to help our communities solve their waste problems and create a potential revenue source for them," President, CEO and director David Anderson told analysts on the company's second-quarter earnings conference call Aug. 6. "We believe there are many reasons to pursue RNG, and there is a good supply of it."
Oregon Gov. Kate Brown on July 31 signed into law a bill that establishes voluntary statewide goals for utilities to add as much as 30% of RNG to the state's pipeline system by 2050. Northwest Natural Holdings, one of the proponents of the bill, called it "groundbreaking legislation" that would make RNG a growing part of the state's energy supply.
Senate Bill 98 also sets a limit of 5% of a utility's revenue requirement that can be used to cover the incremental cost of RNG, aimed at protecting ratepayers and keeping utilities from spending excessively. "Currently, that equates to about $33 million annually for [Northwest Natural Holdings]," Anderson said.
Anderson said the company will continue to work with the Oregon Public Utility Commission in the coming months on the related rulemaking process. This process is set to conclude with the regulator adopting rules by July 31, 2020.
"While we're in the early stages of these initiatives, I look forward to continuing to work with our regulators and other stakeholders on furthering these innovative solutions that provide climate benefits to our customers at reasonable cost," Anderson said.
RNG is gas produced from organic materials such as food, agriculture and forestry waste, wastewater or landfills, which has been processed to remove the impurities and turned into pipeline-quality gas. The law supports all forms of RNG, including methane and renewable hydrogen, according to Northwest Natural Holdings.
Northwest Natural Holdings, which owns Northwest Natural Gas Co., posted second-quarter net income from continuing operations of $2.1 million, or 7 cents per share, recovering from a loss of $339,000, or a loss of 1 cent per share, in the year-ago period. The S&P Global Market Intelligence consensus normalized earnings estimate for the quarter was a loss of 7 cents per share. GAAP net income was $1.1 million, against a loss of $998,000 in the prior-year quarter.