The RNG Surcharge Needs a Methane Receipt

Oregon's renewable gas rule has a number every customer should understand. If a large natural gas utility's annual incremental cost for renewable natural gas exceeds 5 percent of its total revenue requirement, the utility cannot keep making qualified investments that year unless it asks the commission and gets approval. Source: https://secure.sos.state.or.us/oard/view.action?ruleNumber=860-150-0200

That is a guardrail, but it is also a warning label. Renewable natural gas can be expensive enough that regulators had to write a threshold into the rules. If customers are paying for that premium through utility bills, they deserve more than a pleasant label. They deserve a methane receipt.

A Receipt Is Not a Slogan

A utility bill is one of the least voluntary climate policy tools in daily life. Customers do not renegotiate the gas portfolio when they heat a home or cook dinner. They pay the tariff approved by regulators.

Oregon's Public Utility Commission says investor owned natural gas utilities must seek approval for tariffs, and those tariffs can only be changed by commission order. The same page says commissioners weigh whether rates are fair and reasonable for customers while allowing the utility to recover reasonable costs and earn a reasonable return. Source: https://www.oregon.gov/puc/utilities/Pages/Rates-Tariffs.aspx

That structure can be necessary. Gas systems are regulated monopolies for a reason. But monopoly service raises the standard for proof. When a renewable gas cost shows up in a regulated bill, the burden should not be on the customer to trust the headline.

The Scale Is No Longer Theoretical

California has already shown how large the policy ambition can get. In 2022, the California Public Utilities Commission set a short term 2025 biomethane procurement target of 17.6 billion cubic feet and a medium term 2030 target of 72.8 billion cubic feet per year. The commission said the 2030 target reflected about 12 percent of residential and small business core gas usage in 2020. Source: https://www.cpuc.ca.gov/news-and-updates/all-news/cpuc-sets-biomethane-targets-for-utilities

The same California decision tied biomethane procurement to the state's short lived climate pollutant goals and noted a ceiling on dairy biomethane for the medium term target. That kind of detail matters. It shows that regulators know sources, volumes, and customer classes are not interchangeable.

Oregon's framework points in the same direction. State law allows large natural gas utilities to pursue renewable natural gas targets that rise over time and reach 30 percent in the 2045 to 2050 period. It also provides for recovery of prudently incurred costs through ratemaking mechanisms. Source: https://www.oregonlegislature.gov/bills_laws/ors/ors757.html

When programs move from pilot language to multiyear procurement, the public needs a clearer accounting.

What Should Be On the Receipt

A methane receipt should answer six plain questions.

Where did the gas come from? How much methane would have been emitted without the project? How much methane was actually captured and destroyed or displaced? What did customers pay above ordinary gas cost? What was the cost per ton of methane reduced? What cheaper alternatives were considered for the same source?

That last question is the one most often skipped. Renewable natural gas can be a good answer where the site is large, the gas is steady, the interconnection is practical, and the project can be monitored. It is not automatically the best answer just because it enters a pipeline.

A customer paying a renewable gas surcharge should know whether the same methane source could have been addressed faster and cheaper by direct destruction. If the answer is no, show the work. If the answer is yes, explain why the bill favored fuel anyway.

Direct Destruction Is a Consumer Issue

This is where cap and flare belongs in the consumer conversation. It is not a rival brand. It is a price check. If public money or ratepayer money is buying methane reduction, the low cost pathway has to be in the comparison.

EPA's landfill methane guidance says that when recovering energy is not feasible or desired, a site can continue collecting and flaring gas, and that methane destruction in flares is typically greater than 99 percent. The same guidance notes real operating costs, including maintenance and electricity for active systems. Source: https://www.epa.gov/lmop/continue-operate-gas-collection-system-and-flare

That is the right frame. Direct destruction is not free. It still needs equipment, power, maintenance, monitoring, and records. But it also does not require gas upgrading, pipeline injection, long term commodity contracting, or a story that every molecule on the bill has changed.

For consumers, that difference matters. A climate program that pays twice as much to get the same methane result is not more ambitious. It is less careful with other people's money.

Good RNG Can Survive Scrutiny

None of this argues that renewable natural gas should disappear. Some projects can reduce methane and produce useful energy. Some communities may decide that paying a premium is worth it for certain waste streams. Some utilities may have procurement options that are defensible when measured against alternatives.

But defensible is the key word. A good project should survive a public receipt. It should be able to show source, volume, baseline, emissions result, customer cost, and alternative cost. If that accounting weakens the case, the problem is not the receipt.

The same standard would help farmers and waste site operators too. It would move the conversation away from labels and toward payment for measured outcomes. A project would not have to become pipeline quality fuel to be considered legitimate. It would have to prove what happened to the methane.

The Rule Should Be Simple

If customers pay, customers get proof. If the bill says renewable gas, the public file should show the methane math. If a utility asks to recover a premium, regulators should require a side by side comparison with direct destruction and other lower cost options. If a program claims climate value, the receipt should show tons, dollars, and verification.

That would not make every gas bill cheap. It would make the cost honest.

Consumer protection in methane policy is not anti climate. It is how climate policy keeps public trust. People are more willing to pay for hard things when they can see what they bought. A methane receipt would show whether a surcharge bought a real cut, a fuel label, or a more expensive path around the same problem.

The neighbor paying the gas bill should not need to read a docket to know the difference.