Utilities, Business Groups Seek Judicial Review of Oregon’s Climate Protection Program

A coalition of businesses and trade groups including Avista Corp, NW Natural and Cascade Natural Gas filed a lawsuit with the Oregon Court of Appeals challenging the Climate Protection Program aimed to reduce greenhouse gas emissions from transportation fuels and natural gas starting in 2022. The Oregon Department of Environmental Quality adopted the program in December 2021 in response to an executive order that tasked the agency with implementing rules to cap and reduce emissions.

The program sets a declining limit on emissions from fossil fuels used throughout Oregon to reach a 90 percent percent reduction in emissions by 2050. The limit or cap decreases annually and emission allowances are allocated to covered entities – fuel suppliers – to comply with their program obligations. In addition to large stationary sources of natural gas, the program regulates the transportation of fuels, as well as other liquid and gaseous fuels. Site-specific emissions at manufacturing facilities are also subject to the regulation, requiring the use of the best available emission reduction methods.

Avista executives objected specifically to natural gas being included in the program because it remains an important option for customers as it provides reliable energy and is cleaner and more economical, according to a press release from the utility. Avista said it is committed to reducing its carbon footprint, but the program rules are not a meaningful reflection of feedback or collaboration efforts, and it is not a constructive way to reduce emissions. However, the utility agreed to comply with the program while the case proceeds through the legal system.

Trade groups challenging the program include the Oregon Farm Bureau, Oregon Business & Industry Association, Oregon Manufacturers and Commerce, and Alliance of Western Energy Consumers. In a statement issued in December, the Oregon Farm Bureau expressed disappointment at the Environmental Quality Commission’s decision “to circumvent the Legislature to adopt a “cap and trade” program by rule.” The group said that the program will adversely affect farmers and ranchers, raising the costs for fuels, propane, and natural gas.