The City Doesn’t Pass Gas (Contract)

Eugene City councilors and residents spoke critically about an agreement with NW Natural Gas at a Feb. 8 virtual work session and public forum. After months of ongoing negotiations between the fossil fuel utility and the city, councilors did not vote to accept the 10-year agreement, meaning the contract will end in May. Local environmentalists called it a win. The city has been working to reduce its greenhouse gases through climate recovery ordinances.

“Because this is not over, it will go on,” Mayor Lucy Vinis said at the end of the public forum. “We’re not ending anything. We’re just not at a point of resolution.” 

The campaign Fossil Free Eugene, a collective of more than 30 organizations, called the impasse a victory. Members of the campaign wrote in a statement that for most of Oregon, swapping gas for electric heating is the climate equivalent of giving up a car cold turkey. “While most cities are using ordinances and building code updates to address building emissions, Eugene is taking a unique approach by critically examining their franchise agreement with their gas utility,” the group writes. 

On Sept. 28, 2020, the Eugene City Council voted to extend the franchise agreement for six months. The city receives $1.4 million annually from the agreement, according to meeting materials. The start of the deal with NW Natural goes back to 1999. 

Eugene City Manager Sarah Medary said at the work session that the city was due to make a decision on the contract by Feb. 19. She said that if the city doesn’t have something in order by that date, the agreement would end on May 11. Medary said that without the right-of-way agreement, NW Natural could enact higher charges for customers and be affected through more bureaucracy in the permit process. “It doesn’t mean the customers won’t be served,” she added. According to the contract, the right-of-way agreement would provide NW Natural the right and privilege to lay, maintain and operate facilities in and under public property throughout the city limits. 

Acting Public Works Director Matt Rodrigues said that the franchise agreement is also a blanket permit, so NW Natural doesn’t have to request a permit every time to do work such as maintenance. 

The back-and-forth contract negotiations between the city of Eugene and NW Natural was disclosed in the meeting materials. According to the contract language, NW Natural wanted the right to terminate the agreement within 30 days if the council or state government ever passed an ordinance or enacted rules that restrict or ban new natural gas service or the infrastructure itself. 

“That’s not acceptable to me,” Councilor Alan Zelenka said of the utility wanting the right to terminate if the state passed legislation about natural gas. 

The utility company also rejected a carbon reduction agreement with the city, saying it was a voluntary and collaborative agreement for the benefit of Eugene customers unrelated to the right-of-way contract. The city replied that the new franchise agreement was conditioned on NW Natural agreeing to the carbon-related terms. 

During the public forum, many residents spoke out against NW Natural, from high school student environmental organizers to ordinary concerned citizens. 

But Councilor Mike Clark said the city needed to hear from more people. “We need to hear from the general public. I know I got a note from the Chamber of Commerce,” he said. “They haven’t been a part of this discussion, and I hope we will do the wise thing and involve others in the conversation and slow down and learn what we need to learn.” 

During the work session, Greg Evans said he wanted to see more in climate reduction goals from NW Natural. “I’d like to commit them to the use of renewables and a reduction timetable to reduce the raw natural gas that they’re pumping out,” he said. “I think renewables is a layup for me. It may be more difficult than that, but to show good faith, I’d rather have an agreement that has us in the direction NW Natural moving toward more renewables and giving us the time that we need.” 

Councilor Jennifer Yeh said, “We’ve given concessions, and we have not pushed forward on some efforts in order to make this agreement and what we’re getting out of it at the end of the day seems to be a fee on customers that most of the money can be used for energy efficiency of only those customers of NW Natural.” She continued, “While we’re getting something, it doesn’t feel like we’re getting anything substantial in terms of our climate goals.”

She added that she wouldn’t vote for the franchise agreement. “It seems clear to me that we need to find a different way to reach the goals that we have articulated — let’s not kid ourselves, natural gas is a fossil fuel; it’s harmful,” she said. 

Councilor Claire Syrett spoke critically about NW Natural, saying the company had the opportunity to step up two years ago to join the city in addressing climate change. “I have seen NW Natural dragging their feet, engaging in a public relations campaign that spreads lies about what we’re doing, that they are not sincere about coming to an agreement that would actually benefit us,” she said. “This is an industry that is facing an existential crisis: fossil fuels need to be phased out.” 

Councilor Emily Semple agreed, saying that when she thinks of the time city staff spent on the negotiations to only end up being one-sided she gets outraged. “That’s not a good use of our resources. There’s more than just gas on the table,” she added. 

Mayor Vinis said she doesn’t want the city to be a model of how a city is held hostage to a franchise agreement that doesn’t serve higher goals on climate change. “It is an important moment to stand really clearly for what we see as our legacy work going forward,” she added. “This will be the first round of disruption we experience but it’s a way of standing firm that if they want to negotiate with us, they have to negotiate with us.”