ORS 757.396: Participating large natural gas utilities; portfolio targets; ratemaking mechanisms; qualified investments.

(1) A large natural gas utility that participates in the large renewable natural gas program adopted by rule by the Public Utility Commission under ORS 757.394 (1) may make qualified investments and procure renewable natural gas from third parties to meet the following portfolio targets for the percentage of gas purchased by the large natural gas utility for distribution to retail natural gas customers in Oregon that is renewable natural gas: (a) In each of the calendar years 2020 through 2024, five percent may be renewable natural gas; (b) In each of the calendar years 2025 through 2029, 10 percent may be renewable natural gas; (c) In each of the calendar years 2030 through 2034, 15 percent may be renewable natural gas; (d) In each of the calendar years 2035 through 2039, 20 percent may be renewable natural gas; (e) In each of the calendar years 2040 through 2044, 25 percent may be renewable natural gas; and (f) In each of the calendar years 2045 through 2050, 30 percent may be renewable natural gas. (2) The commission shall adopt ratemaking mechanisms that ensure the recovery of all prudently incurred costs that contribute to the large natural gas utility’s meeting the targets set forth in subsection (1) of this section. Pursuant to the ratemaking mechanisms adopted under this subsection: (a) Qualified investments and operating costs associated with qualified investments that contribute to the large natural gas utility meeting the targets set forth in subsection (1) of this section may be recovered by means of an automatic adjustment clause, as defined in ORS 757.210. (b) Costs of procurement of renewable natural gas from third parties that contribute to the large natural gas utility meeting the targets set forth in subsection (1) of this section may be recovered by means of an automatic adjustment clause, as defined in ORS 757.210, or another recovery mechanism authorized by rule. (3) When a large natural gas utility makes a qualified investment in the production of renewable natural gas, the costs associated with the qualified investment shall include the cost of capital established by the commission in the large natural gas utility’s most recent general rate case. (4) Before making a qualified investment in biogas production that is upstream of conditioning equipment, pipeline interconnection or gas cleaning, a large natural gas utility shall engage in a competitive bidding process. (5) If the large natural gas utility’s total incremental annual cost to meet the targets of the large renewable natural gas program exceeds five percent of the large natural gas utility’s total revenue requirement for an individual year, the large natural gas utility may no longer be authorized to make additional qualified investments under the large renewable natural gas program for that year without approval from the commission. (6) The total incremental annual cost to meet the targets of the large renewable natural gas program must account for: (a) Any value received by a large natural gas utility upon any resale of renewable natural gas, including any environmental credits that the renewable natural gas producer chooses to include with the sale of the renewable natural gas to the large natural gas utility; and (b) Any savings achieved through avoidance of conventional gas purchases or development, such as avoided pipeline costs or carbon costs. [2019 c.541 §5]