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Minn. renewable gas program gathers support, but accountability questions remain

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Essential Energy Insights - September 17, 2020

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Minn. renewable gas program gathers support, but accountability questions remain

A proposal by CenterPoint Energy Inc.'s Minnesota gas utility to begin introducing renewable natural gas into the company's stream has been well received by renewable energy advocates, although some supporters want to see more environmental accountability associated with the program.

The Minnesota Public Utilities Commission is taking comments on the utility's August pilot program application to give customers the option to purchase renewable natural gas, or RNG — refined gas derived from biological sources, such as landfills or dairy farms — for an additional charge on their monthly bill.

Energy Vision, a New York-based advocate for cutting greenhouse gas emissions in the energy and transportation sectors, in recent comments offered its support for the CenterPoint program.

Methane when burned still releases carbon dioxide into the atmosphere, but methane is a potent greenhouse gas with significantly more global warming potential than carbon dioxide, according to the Intergovernmental Panel on Climate Change. Curbing the release of methane can be "net-carbon-negative," Energy Vision said in its comments to the PUC.

"[P]ipeline access and acceptance for biomethane projects remain challenging," Energy Vision wrote. "While the technology is proven, commercial and safe, only a handful of states and/or gas utilities have addressed the barriers to greater adoption and integration of biomethane; namely gas quality and pipeline interconnection standards. Fortunately, CenterPoint Energy is among the few that recognize the important role RNG can play in cost-effectively decarbonizing the natural gas grid."

The Center for Resource Solutions, a California-based group focused on policy and market opportunities for reducing greenhouse gas emissions in energy, also has recommended that the PUC move forward with the subsidiary's proposal.

The center recommended, however, that the PUC require CenterPoint to provide more details on the tracking and verification procedures for the pilot program. The center also pushed for third-party audits of the program's RNG sales.

"While it is not necessary or perhaps possible to demonstrate physical delivery of RNG molecules to CenterPoint customers due to shared gas distribution networks, some contractual path tracking mechanism and verification process is needed to ensure pilot participants are getting what they are paying for," the center wrote in comments, noting that this kind of tracking would help avoid "double claiming" for how much gas is being produced and used.

As part of the pilot program, customers would decide the amount of RNG they would buy and how much they are willing to spend, with a minimum of $1 per month.

The city of Minneapolis, which has also indicated that it supports CenterPoint's pilot program plan, said CenterPoint should have to produce an initial report three years into the program and a final report to identify and define the environmental benefits.

"Currently, the city does not have a way to account for RNG impacts in terms of its greenhouse gas emission reduction goals. Without clearer ways to incorporate RNG into the city's sustainability goals, the benefits of the RNG program to Minneapolis (and its residents) could be obscured or limited," the city wrote in it is comments.

The city also expressed concern about the relatively high cost of RNG compared to that of extracted natural gas, asking that CenterPoint detail how the fuel's cost will be covered if it is not purchased by pilot program participants.