This contract with the local gas utility could help Whatcom further climate goals
What will Whatcom County’s energy use look like in 25 years? Does it include natural gas, a fossil fuel that currently heats many of our buildings but also contributes to climate change?
That’s the question the Whatcom County Council grappled with at its meeting on Tuesday, Oct. 12, as it considered whether or not to renew a legal contract with Cascade Natural Gas, the local gas utility that serves over 52,000 customers in the county. As it’s currently written, the franchise agreement would give the utility the right to build and maintain pipelines in public rights-of-way for the next 25 years, until the mid-2040s.
Local environmental and pipeline safety groups have been pressuring the county to renegotiate the terms of the contract, arguing that the agreement should be shorter, require the utility to help pay for climate action and hold it responsible for pipelines that might be abandoned in a wide-scale transition to clean energy, such as wind and solar.
“Please don’t lock Whatcom County into 25 years of the same terms with Cascade Natural Gas, when the terms of county climate action will most likely be anything but the same,” pleaded Simon Bakke, communications manager at local environmental nonprofit RE Sources, to County Council on Tuesday night during a public hearing.
The Council voted 6-1 to hold off on making a decision until January 2022, in order to examine what renegotiations could look like. The dissenting vote came from Councilman Ben Elenbaas, who represents District 5, which stretches from Lummi Island to Blaine. He was outspoken in his belief that the franchise agreement should be approved as is.
The most recent franchise agreement between Cascade Natural Gas and Whatcom County has been in effect since 1996. The contract is not a law, explained County Climate Impact Advisory Committee member Eddy Ury, and natural gas service to folks living in the county won’t be turned off just because council delayed its decision.
“This isn’t whether or not we have gas service that’s being decided,” said Ury, who previously worked for RE Sources and is running for County Council. “It’s ‘How do we get a good deal for the taxpayers of Whatcom County?’”
But that doesn’t mean the potential renegotiation isn’t urgent, said Councilman Todd Donovan, who represents District 2 and raised the motion on Tuesday to hold the decision until January and explore renegotiation.
“The climate crisis is immediate,” Donovan said. “Part of the renegotiation of this is really to address the immediate urgency of the climate crisis.”
The county is in the final phases of creating a Climate Action Plan, which maps a path to avoiding the worst impacts of climate change and achieving state emissions reduction targets. Greenhouse gas emissions are created by burning fossil fuels, such as natural gas.
“We need to encourage a transition away from space and water heating with gas, a major source of CO2 emissions in buildings,” said the County’s Climate Impact Advisory Committee in a draft executive summary of the Climate Action Plan written in July.
A new tool for climate action
It’s only recently that franchise agreements have come under scrutiny as a potential tool to address climate change, said Carl Weimer, special projects advisor at the Bellingham-based nonprofit Pipeline Safety Trust.
“Nobody ever paid attention to these boring contracts called franchise agreements except in the last few years,” said Weimer, who was on the County Council 2006-2018. “Climate change has trickled down so far that local cities and counties are looking at these mainly ignored contracts.”
The main change that environmentalists and public safety groups are advocating is to shorten the county’s contract length from 25 years to 5 or 10 years. The more often the county gets a chance to renegotiate the terms of its franchise agreement, the better chance it has to keep up with rapidly evolving climate and energy science, Weimer said.
The trust was formed in the aftermath of the 1999 Olympic Pipeline explosion at Whatcom Creek, and Weimer has read many franchise agreements over the years — he said that 25 years is one of the longer terms he’s seen. This summer, the city of Bellingham signed a 10-year franchise agreement with Cascade Natural Gas.
“Ten years from now, a lot more will be known about the transition and how far along on the Climate Action Plan we are,” Weimer said.
A potential measure that could be put in a renegotiated contract or a future one is a “franchise fee,” or fee levied on the utility to use public rights-of-way. This fee could be used to help further the county’s Climate Action Plan or hire staff to address climate change, said Councilman Donovan.
“One of the main needs we have in the Climate Action Plan is we need staff,” Donovan said. “We need a director.”
A county government’s right to charge utilities a franchise fee was reinforced by a 2019 Washington Supreme Court decision allowing King County to do so.
Whatcom County should also explicitly write into the agreement that Cascade Natural Gas cannot abandon their pipelines in place if they go bankrupt, which could happen as folks increasingly turn to electricity over natural gas, argues a letter from the Climate Impact Advisory Committee to County Council and County Executive Satpal Sidhu.
“There will be utility work done at some point where it will get in the way,” Ury said. “When stuff is just left in the ground, there’s this enormous uncertainty that comes with doing work. It messes up our budget and costs.”
The cost of removing abandoned pipelines could then fall onto taxpayers, he said.
“It’s like making somebody else take out your trash,” said Simon Vickery, climate and energy policy manager at RE Sources.
The letter from the Climate Impact Advisory Committee also pushed the county to examine if the utility’s current $50 million in insurance coverage is adequate to respond to potential disasters such as earthquakes.
Pushback on renegotiations
A handful of council members did not support franchise agreement renegotiations.
“It’s just one more do-nothing-but-cause-harm type of initiative that I can’t even believe it comes from who it comes from because they claim to be so compassionate,” Elenbaas said at Tuesday’s meeting. “I’m not interested in raising the prices on anybody who is trying to heat their homes.”
Council member Kathy Kershner also expressed fears that if the franchise agreement is not signed as is, Cascade Natural Gas could pull gas service from the region, be deterred from investing in improvements to its Whatcom infrastructure or pass the cost of a franchise fee onto customers.
Cascade Natural Gas maintains approximately 940 miles of main pipeline in Whatcom County, according to utility spokesperson Mark Hanson.
Even if the franchise agreement did include a franchise fee, however, that doesn’t automatically mean that the utility can or will pass the costs onto customers, Ury said. As a private, investor-owned utility, Cascade Natural Gas is regulated by the state’s Utilities and Transportation Commission and cannot raise rates or disconnect gas service at will, he said.
“It might get misunderstood, like ‘We don’t want you to sign this because we don’t like gas.’ It’s not like that at all,” Ury said. “It’s the duty we have to protect public interest. When it comes to county property, we need to look at it in broader context and get a better deal.”
This story was originally published October 19, 2021 at 5:00 AM.
CORRECTION: Cascade Natural Gas spokesperson Mark Hanson’s first name was corrected Oct. 19, 2021.
